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Innovation Fact of the Week: Latin American Labor Productivity Growing at 90% of U.S. Rate

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Between 1990 and 2013, Latin America’s economy grew faster than the U.S. economy (2.4 percent versus 1.5 percent), yet the region’s labor productivity grew at only 90 percent of the U.S. rate. The reasons for the comparatively strong economic growth included improving educational outcomes, more people participating in the workforce, and workers putting in longer hours—factors that can take an economy only so far. Meanwhile, one factor in the comparatively weak productivity growth was lack of investment in information and communications technology (ICT).

Scholars from the Economic Commission for Latin America and the Caribbean (ECLAC) analyzed labor productivity data from 1990 to 2013 and found that ICT capital contributed to just 6 percent of Latin America’s growth. In the United States, by comparison, 29 percent of economic growth in the same period came from capital investments in ICT. The researchers also found that the Latin American industries that grew the fastest had invested the most in ICT.

Read last week’s Innovation Fact of the Week

Photo Credit: João Felipe C.S. via Wikimedia Commons

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About the author

John Wu is an economic research assistant at ITIF His research interests include green technologies, labor economics, and time use. He graduated from the College of Wooster with a bachelor of arts in economics and sociology, with a minor in environmental studies.