The DR surpassed only by Panama and Costa Rica in productivity.
The growth of labor productivity in the Dominican Republic, second only to the productivity growth of Panama and Costa Rica.
In labor productivity, which is calculated by dividing the Gross Domestic Product (GDP) by the number of hours worked, the Dominican Republic is among the highest in Latin America and the Caribbean with the best results.
According to an ECLAC report, the growth of labor productivity in the Dominican Republic was more than 50% between 2005 and 2024, surpassed only by the productivity growth of Panama and Costa Rica. In the case of Panama, the growth in its productivity has been a source of astonishment, where it grew by 151% in the period.
Costa Rica’s labor productivity also increased above 50%, while the rest of the countries were divided between those that had moderate productivity growth and those that are in the group with low growth.
The countries with moderate growth in labor productivity include Paraguay (49%), Bolivia (48%), Colombia (46%), Cuba (42%) and Chile (35%), while in the group with low productivity growth are Honduras (5%), Ecuador (5%), Mexico (11%), Jamaica (14%), El Salvador (15%), Argentina (15%), Brazil (17%), Trinidad and Tobago (18%) and Guatemala (23%). Venezuela experienced a 52% decline in productivity.
To illustrate what happened to productivity in the region, an indicator that allows measuring the efficiency and performance of the economy, the ECLAC report comments that “while in 2005 the productivity of the countries of the region that could be considered high-income was US$25 per hour worked and that of lower-middle-income countries amounted to US$5 per hour worked, in 2024 this productivity is US$34.4 per hour worked and US$6.5 per hour worked, respectively.”
The findings of this report reaffirm the content of another report that the Economic Commission for Latin America (ECLAC) published in December 2022, which classified the countries of the region among those whose average labor productivity grew more than that of the United States (Brazil, Costa Rica, the Dominican Republic, and Chile), those whose average labor productivity increased at a slower rate than that of the United States, but with closing gaps (Peru, Bolivia and Colombia), and countries whose average productivity did not increase, or did so at a rate that further opens the gap that separates them from the United States (Mexico, Venezuela, Uruguay, Guatemala, Paraguay).
Among the factors that have contributed to the increase in productivity in the Dominican Republic are political stability, its enviable geographical location, its robust infrastructure (especially in ports, airports and road network), the high flow of foreign investment, its institutional advances, changes in the tax structure (less dependent on foreign trade taxes) and technological transformation.
But much remains to be done, especially in introducing reforms to continue facilitating the business climate and continue strengthening human capital, creating an ecosystem that promotes innovation and research in the country.
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