Considering unemployment in Ecuador during the Great Depression

Abstract

The Great Depression struck Latin America through the commerce: the reduction in revenues from the external commerce spread to the rest of the economy, resulting in the continue decreasing of the monetary supply. The Ecuadorian monetary policy until 1932, based on the gold standard, faced the phenomenon of deflation, which caused real salaries to grow. Since 1932, the monetary supply increased due to the abandonment of the gold standard, which caused real wages to decreased. In the same period, from 1928 to 1935, the primary data of the central offices of eight institutions shows that public employment decreased abruptly from 1928 to 1930, from 109.4 to 83.1 points (1927=100). After 1930, there was a quick recovery until 1932, and, from this point in time, it remained relatively stable until 1935. This article constructs, for the first time in the Ecuadorian historiography, an employment index which serves to see employment as the adjustment variable of the Great Depression.