PR population drop alters labor picture.

Stemming the flow of human capital from Puerto Rico is key to the island’s economic recovery, according to Banco Popular’s latest Progreso Económico, a quarterly report published by the island’s largest bank.

Puerto Rico’s population reduction has entered its eighth consecutive year. From peak to present, Puerto Rico has already lost 4.4 percent of its population, and is projected to continue to shed population throughout the decade, the report says.

The Progreso Económico report highlights a major benchmark revision to Puerto Rico’s Labor Force Survey that led to significant adjustments to two of the island’s principal economic indicators, the labor participation rate and the number of persons employed. These adjustments produced mixed implications for economic and statistical analysis.

While still low, the labor participation rate, which measures the number of persons either employed or unemployed but actively seeking work, as a percentage of the civilian population of working age, never fell under 40 percent, as had been previously reported during the last 10 months of 2012. The rate was revised up by as much as 2.1 percentage points since 2006.

On the other hand, the number of employed people in Puerto Rico was reduced by 58,000 in December. These adjustments were caused by the decrease in population, as reported by the 2010 Census.

In addition, after the revision, Puerto Rico’s Labor Force Survey takes into account, for the first time ever, the correct demographic distribution of the island by sex and age group, instead of relying on the sample-based demographic distribution obtained during the interviews of over 3,000 households every month.

“Investing in reliable data gathering systems for economic analysis is priceless,” the Progreso Económico report says.

While the jobs numbers are a mixed bag, the report signals that the importance of plugging Puerto Rico’s so-called “brain drain” crisis is clear.

“Investing in, retaining, and attracting a talented labor force is imperative to drive the economic recovery of Puerto Rico,” the report says.

Courtesy of http://www.caribbeanbusinesspr.com