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Is the Global Competitiveness Index a Reliable Tool for the Design of Labor Market Policies? Evidence from Peru

Author

Listed:
  • Vera, Celia

    (Zirve University)

  • Rendon, Silvio

    (Inter-American Development Bank)

Abstract

Peru's national policy on productivity and competitiveness relies on the Global Competitiveness Index (GCI) by the World Economic Forum. We analyze the subjective component of GCI and show that, in the labor market area, this index has been largely constructed with opinion data coming from a particular group of the business sector. The opinion data is based on a survey of 98 business executives, which mainly represent firms with 100 or more employees and account for only 1% of total firms in Peru. Further, the questionnaire exhibits obvious flaws, and the underlying viewpoint that less employment protection promotes productive and formal work is not aligned with the evidence. Thus, we do not find that GCI provides a solid base for policy advice.

Suggested Citation

  • Vera, Celia & Rendon, Silvio, 2021. "Is the Global Competitiveness Index a Reliable Tool for the Design of Labor Market Policies? Evidence from Peru," IZA Policy Papers 180, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izapps:pp180
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    References listed on IDEAS

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    1. Nikita Céspedes & María E. Aquije & Alan Sánchez & Rafael Vera Tudela, 2016. "Productividad sectorial en el Perú: un análisis a nivel de firmas," Chapters of Books, in: Nikita Céspedes & Pablo Lavado & Nelson Ramírez Rondán (ed.), Productividad en el Perú: medición, determinantes e implicancias, edition 1, volume 1, chapter 3, pages 70-92, Fondo Editorial, Universidad del Pacífico.
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    Cited by:

    1. Jiménez, Bruno & Rendon, Silvio, 2023. "Does employment protection unprotect workers? The labor market effects of job reinstatements in Peru," Labour Economics, Elsevier, vol. 80(C).

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    More about this item

    Keywords

    labor markets; competitiveness; subjective data;
    All these keywords.

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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