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Chapter 12 Reflection

Public policy can certainly influence human productivity by affecting the availability of the resources people need to be productive. For example, in my recent travels to rural parts of both Paraguay and Nepal, I've realized that the poor working class depends heavily on their health in order to work. There is no employer-provided sick pay, so if they do not work, they do not have any safety net. Also, if they have to go the hospital then they have to travel long distances on very rough roads, which can be very slow going. This additional time spent away from work reduces productivity, and thus their income, and thus their quality of life. So the public policy of improving infrastructure can increase productivity in this way. Infrastructure also makes it more efficient for factories to receive and send shipments, which decreases the lead time required to make and sell a product, which increases their ability to gain market share.

In another example, the availability of education affects people's productivity. As they learn, people are able to apply skills and knowledge in a way that increases their ability to work. Governments can provide subsidies towards education to promote growth.

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