If Peru seeks to grow at high rates and reach levels similar to those of developed economies, it must pay special attention to productivity growth. In that sense, the book “Productividad en el Perú: medición, determinantes e implicancias” ("Productivity in Peru: measurement, determinants and implications") recently published by Universidad del Pacífico Press, rescues the complexity of productivity in Peru through a collection of eleven articles written by researchers specialized in the subject.
A first group of articles addresses the measurement of productivity and questions the reports available. A second group is dedicated to the study of the importance of the external sector in productivity. And a third group focuses on human capital formation in the life cycle, from early education to education at work. In short, it gathers macroeconomic and microeconomic approaches to productivity, with contributions at technical and economic policy levels.
With the participation of about 20 researchers, this book was edited by Pablo Lavado
, professor and researcher at Universidad del Pacífico Research Center
(CIUP); Nikita Cespedes, Director of the Research Directorate at the Ministry of Economy and Finance and Nelson Ramírez Rondán, Researcher of the Deputy Management of Economic Research at the Central Reserve Bank of Peru.
Below are some key facts from the book:
• Productivity in Peru accounts for only about one-fifth of that achieved by the United States although labor participation and capital stock are high compared to those in developed economies and the region, respectively.
• During the 1950-2015 period, potential GDP grew at a rate of 3.9% per year, physical capital at a rate of 4.6%, and potential employment at a rate of 3.9%; but the total factor productivity in potential terms shows an annual average rate close to 0%.
• For the next 20 years, considering an annual growth of 1% and 4% in the labor and capital factors, respectively, productivity should grow at a rate of 3.2%, a level well above the historical productivity growth rates that Peru has registered (0.7% in the 1951-2014 period).
• Terms of trade shocks have generated significant productivity gains in Peru. They have short-term effects on productivity, which are predominant compared to the long-term effects.
• The more productive Peruvian textile exporters improve the quality of their products to differentiate themselves from the Chinese garments; while less productive firms, unable to improve their quality, choose to reduce prices.