EconPapers    
Economics at your fingertips  
 

The Climate for Business Development and Employment Growth in Puerto Rico

Steven Davis () and Luis Rivera-Batiz

No 11679, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Employment rates in Puerto Rico range from 55 to 65 percent of U.S. rates during the past thirty years. This huge employment shortfall holds for men and women, cuts across all education groups, and is deeper for persons without a college degree. The shortfall is concentrated in the private sector, especially labor-intensive industries that rely heavily on less educated workers. Motivated by these facts, we identify several factors that undermine employment growth and business development, including high minimum wage requirements, a history of tax incentives for capital-intensive activities, a host of regulatory entry barriers, and a business climate in which profitability and survival too often rest on the ability to secure favors from the government,. We pay close attention to the permitting process whereby the government oversees and regulates construction and real estate development projects, the commercial use of equipment and facilities, and the periodic renewal of various business licenses. Based on interviews with experts and participants in the permitting process, and supplemented by other sources, we compile evidence that the permitting process is excessively slow and costly, fraught with uncertainty, subject to capricious outcomes, susceptible to corruption, and prone to manipulation by business rivals and special interest groups.

JEL-codes: J21 J23 D73 O54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-edu
Date: 2005-10
Note: EFG LS
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed

Published as Collins, Susan M., Barry Bosworth, and Miguel A. Soto-Class(eds.) The Economy of Puerto Rico. Brookings Institution Press and Center for the New Economy, 2006.

Downloads: (external link)
http://www.nber.org/papers/w11679.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:11679

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w11679

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Series data maintained by ().

 
Page updated 2017-10-17
Handle: RePEc:nbr:nberwo:11679