Structural Change: A Regional Analysis for Peru, 2003-2011

This paper estimates three measures of ‘structural change’ associated to the contribution of labor reallocations between productive sectors and formal-informal activities to labor productivity growth in 24 regions of Peru during its growing period of 2003-2011. Thereafter, it presents an exploratory analyzes of a set of factors that may promote or hinder the process of ‘structural change’ in this economy. Along this period, productive structure and the share of the informal labor force for Peruvian economy and its regions have not changed in a significant way. Accordingly, the contribution to labor productivity growth of Peruvian economy (particularly in rich regions which concentrate about 43% of the Peruvian population) of sectoral and formal-informal activities measures of ‘structural change’ were relative small. Rising relative prices of the mining sector and the availability of information and telecommunications technology instruments may have promoted the small sectoral structural change experienced in the period. On the other hand, the four percentages point’s reduction of the share of the labor force working in informal activities from 2003 to 2012 seems to be caused by the decline of relative prices of the transport and communications sectors, regional economic growth and to less extent by the decrease of the share of agriculture output.