Productivity growth, import leakage and employment growth in Puerto Rico, 1967-87

Using Puerto Rican input-output data that cover the period 1967-87, we find that employment growth was led primarily by a rapid increase in final output - 5.1% per yr - although labor productivity growth was also substantial, at 3.7% per yr. Import leakages also fell over this period, but had little impact on employment growth. Employment generated by local absorption grew by 35% and that from exports by 29%, even though exports increased almost four-fold, while local absorption only doubled. The difference reflects the greater labor intensity of industries that supply local absorption. There was also a notable shift in the occupational structure toward white-collar employment and away from blue-collar jobs.