How Low Human Capital Can Limit Productivity Improvements. Examples from Turkey and Peru

Comparing two middle-income countries is not unusual, but two that are geographicallystudent1 far and are apparently different is less common. However, both Turkey and Peru have had the highest growth in their respective regions in recent years, aspire to become high-income economies in the next decade, depend on trade. Both countries face downside risks if structural changes—in the education and training system, and the economy more broadly—are not made to ensure that contributions to economic growth come from improvements in productivity. Both countries recognize there is a large gap between their productivity levels and the global productivity frontier, and both have growing populations that are not adequately equipped to meet labor market needs, with average productivity levels. Given these (similar) challenges, both countries have as their development goal, central to their development agenda, to improve productivity to continue growing in a sustainable manner.

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