Abstract - Quest for Global Competitiveness - Universidad de Puerto ...

education groups and is deeper for persons without a college degree; it isgenerally more than 50 percent of the free enterprise employment in USA.Further, the 2000 Census, and its updates show that only 37.5 percent ofP.R. residents (aged 16 to 65) held a job during the reference week (Incontrast 68.8 percent held a job in the USA). Additionally, the ratio ofpublic sector employment to private sector employment is 9.3/28.2 in P.R.compared to 10.6/58.2 in USA. The free enterprise segment consists ofbusinesses that operate in the economy without large subsidies, specialregulatory advantages or oversight by the government bureaucracies.Thus, the free enterprise sector employment in PR during 2000 periodwas only 24 percent compared to 51 percent in the USA; this segment ofthe private sector excludes governmental employees in public utilities andsanitary services, primary and secondary education colleges anduniversities, construction and small industries. Moreover, public sectoremployment exceeds 35 percent of industry employment in P.R. Studieshave found that attitude towards free enterprise activity or public sectoremployment are influenced and shaped by one’s own, family or friend’snature of work experience (Alesina and Galser, 2004). These authors notethat countries with higher social welfare spending believe in thepropositions that “poverty is societies and luck determines income”. Inaddition, countries with a history of socialized production hold a view that“it is the responsibility of government to reduce income differences”(Corners & Gruener 2002). These patterns across countries suggest thatreduced work experience in free enterprise activity limits political supportfor economic reforms that could expand private business activity andemployment. Yet, work experience is not attainable if employment isnonexistent.Therefore, the underdeveloped state of the Puerto Rican privatesector supports the view that Puerto Rico suffers from an inhospitablebusiness climate, that the costs of doing business are excessive andburdensome, and that initiating and obtaining permits to start a firm rather