ABSTRACT
The most frequently used indicator of a population’s well-being is real per capita income, as well as the trend in this variable, which indicates the average increase in wealth over time. Growth in labor productivity-or, even better, in total factor productivity-is a major component of long-term growth in per capita income, because it reflects the upgrading of output. It is also a key factor in the sustain ability of long-term growth. One should bear in mind, however, that growth in employment is also essential to economic growth. An increase in labor productivity without employment growth generally reflects a change in the economic structure of the region concerned, namely a loss of less-skilled jobs without creation of new potential, as can happen when the least productive sectors are unable to face competition from low-wage countries. Prosperity, in the broadest sense of the term, refers to an environment in which people can develop their capacities and live in accordance with their needs. According to the definition of the United Nations Development Programme,
Human development is a process of enlarging people’s choices. The most critical ones are to lead a long and healthy life, to be educated and to enjoy a decent standard of living. Additional choices include political freedom, guaranteed human rights and self-respect-what Adam Smith called the ability to mix with others without being “ashamed to appear in public.”
