This chapter discusses the importance of skills in tackling inequalities and ensuring that no-one is left behind in and increasingly interconnected and rapidly changing world. It looks at the performance of Latin America in different dimensions of skills development and use, and identifies key challenges for vocational education and training (VET) and lifelong learning in the region. It puts forward key policy directions for closing the skills gaps and discusses the potential benefits of a regional skills strategy for Latin America.
Social Mobility and Inequality in Latin America and the Caribbean
Insights from Education and Skills
Abstract
Skills are the new currency. Skills are central to the capacity of countries and people to thrive in an increasingly interconnected and rapidly changing world. Skills systems have a key role to play to counteract rising inequalities and a lack of equal opportunities in OECD countries. Social mobility depends greatly on equipping individuals with the right skills at the right time. Skills are key for individuals and particularly vulnerable groups to adapt and succeed in labour markets and societies. Yet, most countries are facing increasing challenges to provide equal opportunities for children, as well as for those who have lost their jobs due to globalisation and technological change. The “Opportunities module” of the 2022 OECD Risks that Matter survey (OECD, 2023[1]) shows that “improving equal access to education” and “retraining and upskilling” are among the top five policy measures to reduce economic inequalities that garner the highest approval among the 27 countries surveyed. Addressing social inequalities requires that skills systems need to be re-designed to provide coherent, permeable and attractive pathways for all learners, targeting in particular those who have so far failed to meaningfully engage in lifelong learning opportunities. Young people, and vulnerable groups, which are those who are most susceptible to changes in the labour market as skill requirements change due to megatrends and unexpected shocks, need to be empowered to create their own lifelong learning trajectories. Strong foundations should be provided early in life through early learning and formal education.
A number of ongoing global trends are making skills more important than ever for the success of economies and societies. Globalisation, digitalisation, technological change and automation, as well as trade wars between major global players and increasing political uncertainty are forcing countries to take a more strategic approach to their economic development. High performing skills systems that develop relevant skills for the future, and put those skills into effective use for society, help to build more resilient and adaptable economies and individuals, empowering them with the fundamental tools needed to thrive in our increasingly complex world. (OECD, 2023[2])
Boosting productivity is of crucial importance to raising the living standards of the population, and strengthening the development and use of skills will be key to achieving this. As demonstrated by the Survey of Adult Skills (PIAAC), higher levels of skills are a crucial determinant of economic prosperity and social well-being. Better skills utilisation in firms is associated with higher productivity and lower staff turnover, and higher skills for workers is associated with higher salaries and job satisfaction as well as increased social participation.
However, because the demand for skills is likely to change in response to rapid technological innovations, investments in skills must be affordable and sustainable, thereby equipping individuals with skills that will make them resilient to changes in economy and society. Validating and certifying skills will be critical, thereby reflecting their relevance for individuals, economies, and societies by responding effectively to the implications of megatrends and unexpected shocks. Enhancing social mobility and reducing social inequalities are central to these efforts, ensuring that everyone, regardless of their background, has the opportunity to develop the skills needed for economic and social success.
Latin America has made enormous achievements in education and skills in recent decades. This has included substantial increases in the educational attainment of the population, and the expansion of general education, including a notable increase in access to tertiary education (including in some countries a rapid expansion of professionally-oriented short-cycle tertiary programmes). In the 10 years from 2010 to 2020, the overall enrolment rate in tertiary education across the region increased by 13 per cent from 41 to 54%.
Figure 5.1 below reports a snapshot of Latin America’s comparative skills performance. The snapshot reports the relative performance Latin American countries across different dimensions, from the development of relevant skills for students and adults to the intensity of skills use in workplaces.
Relative performance of Latin American countries on various skills indicators
Note: These summary indicators are calculated as a simple average of a range of underlying indicators. All underlying indicators have been normalised in a way that implies that a higher value and being among the “top 20%” reflects better performance. The "x" indicates insufficient or no available data, and dotted circles indicate missing data for at least one underlying indicator.
Source: OECD Skills Strategy 2019
Despite recent progress towards more efficient and resilient education and skills systems, Latin America still faces important skills challenges.
Regional performance from the OECD’s Programme for International Student Assessment (PISA, see Chapter 3) is still well below the OECD average. All Latin American countries participating in PISA 2022 below OECD average mean performance on reading, mathematics and science, as well as below average shares of top performers and above average shares of low performers (OECD, 2023[3]). This performance gap highlights the challenges the region faces in achieving parity with more developed education systems, and underscores the need for targeted interventions to enhance educational quality and equity.
Enrolment in upper-secondary VET programmes in Latin American OECD countries remains below the OECD average, see Figure 5.2. The share of upper-secondary education learners who are in vocational programmes is only 11% in Brazil, 28% in Colombia, 30% in Costa Rica, 33% in Chile and 35% in Mexico (compared to an OECD average of 44%). By contrast, some of these countries have a relatively well developed “higher VET system” – i.e. professionally oriented short-cycle tertiary programmes at ISCED level 5. For example, in Chile and Colombia around 65% of all vocational students are enrolled at this level. Programmes at that level account for 39% in Chile and 44% in Colombia of first-time entrants into tertiary education, compared to only 19% on average across OECD countries (OECD, 2023[4]).
Share of upper secondary students enrolled in vocational programmes, OECD and G20 countries
Source: OECD Education at a Glance 2023
A large proportion of adults lack basic digital problem-solving skills needed to thrive in a globalized and interconnected world. Data from the OECD’s Survey on Adult Skills (PIAAC, see Chapter 2) indicates that 32% of adults in Mexico, and 52% of adults in Chile are unable to solve problems in a technology-rich environment at a basic level. In fact, many adults lack even the very basics to operate a digital device: the share of adults without computer experience or failing the PIAAC ICT core test amounts to 25% in Chile, 33% in Ecuador, 39% in Mexico and 43% in Peru.This digital divide exacerbates social inequalities, limiting opportunities for social mobility. In addition, many adults lack basic foundational skills – defined as literacy and numeracy skills- which are essential to be adaptable and resilient.
Participation rates in adult learning are strikingly low in several Latin American countries, as they are in many other OECD countries. Data from the Survey of Adult Skills (PIAAC) indicate that only 2 in 5 adults (40%) on average participate in job-related formal or non-formal training over the course of 12 months prior to being interviewed in PIAAC, see Figure 5.3. While some of these adults will be taking formal training, such as VET or higher education programmes, most of the training is non-formal (i.e. organised training that does not lead to a qualification from the formal education system). Looking at participation rates across countries shows considerable variation, also among countries in the Latin American region: Less than 30% of adults in Peru, Mexico and Ecuador participate in adult learning, compared to 40% of adults in Chile. Low educated adults and those in informal jobs typically have lower access to training. It is estimated that about 50% of jobs in Latin America are informal, which limits access and take-up of lifelong learning opportunities for adults.
Willingness to train and participation in adult learning, by country (OECD and G20 countries)
Note: Participation relates to formal and non-formal job-related adult learning over the 12 previous months. Countries are sorted by the share of the “disengaged” group in a given country. Countries are ranked in ascending order of the percentage of 25-65 year-olds having completed initial education who are in the “disengaged” group. *Data for the United Kingdom refer to England and Northern Ireland jointly. Source: OECD (2021[5]), using OECD (2019[6]) (2015[7]) (2012[8]) Survey of Adult Skills (PIAAC) databases, http://www.oecd.org/skills/piaac/publicdataandanalysis/.
Megatrends such as globalisation, technological progress, population ageing, migration and climate change, are putting unprecedented pressures on skills systems globally. These megatrends are changing the skills demanded in the labour market and societies. Adapting to these shifts is essential to ensure social mobility and reduce inequalities. To thrive in a digital and interconnected global economy, young generations need to acquire new skills, and older generations need to up- and reskill. This entails identifying changing skills needs for different groups in rapidly changing societies, and creating education and training that are responsive to changing skills needs.
Reenforcing Vocational Education and Training (VET)
VET has been found to smoothen school-to-work transitions, with young adults with an upper-secondary VET degree having employment rates that are close to those of young adults with a tertiary degree in many countries (OECD, 2020[9]). Work‑based learning plays a key role in this respect. Evidence from European countries shows that young adults with a VET qualification have higher employment rates when they had work experience during their studies (OECD, 2020[10]).
VET can serve a diverse group of young and adult learners, including those who aspire further learning and those who are less academically oriented or who are discouraged from learning in a traditional classroom setting. VET has been found to contribute to engaging students in the education system, with various studies finding a negative association between VET and dropout from secondary education (OECD, 2020[9]). It can provide an interesting alternative to general education for students, and can therefore contribute to reducing dropout rates and to re-engaging early school leavers in the education system. To support the most vulnerable young students, various countries have put in place dedicated support measures and/or target programmes, such as pre‑apprenticeship programmes and/or shorter apprenticeship programmes that provide additional support and coaching (OECD, 2023[11]).
Despite the many benefits of VET, in many countries VET struggles with a negative image and is sometimes seen as a last resort option. Strong career guidance services that raise awareness among students and their parents about VET and its labour market outcomes can contribute to changing the perception around VET. Moreover, students should be informed about the opportunities for progression in higher education and further learning after upper-secondary VET. In this respect, VET should never be a dead-end, and VET students need to have effective pathways into higher-level programmes. Across OECD countries, on average, about two-thirds of students enrolled in upper secondary VET are receiving an education that theoretically provides them with the opportunity to directly enter a higher education level, often short-cycle tertiary but also at bachelor’s or equivalent level (OECD, 2022[12]). In some countries, VET students need to go through a bridging progress to prepare them for further studies. Some VET students might need additional courses or other type of support to be successful in higher education. Such bridging programmes, additional courses and support measures may contribute to better outcomes in higher education, as today completion rates in bachelor programmes are significantly lower for students with a VET background than those with a general education background in several OECD countries (OECD, 2022[12]).
Providing more and better opportunities for adult learning
As pointed out above, many adults in Latin American countries and in OECD countries more broadly do not engage in training. PIAAC data show that many adults who do not participate in training report that there was no training they wished to participate in. Across OECD countries, these so called “disengaged” adults compose one in two 25 to 65‑year-olds (OECD, 2021[5]). This goes up to 63% of adults in Mexico and Ecuador, see Figure 5.3. These adults could be facing difficulties identifying training that is relevant to their needs or may face such high barriers that they perceive training as unachievable for them. Mostly, however, they could be adults who do not see the need for training and are simply not interested in participating. This is the case, for example, for low-qualified adults who are currently employed, receive modest but stable incomes and do not fully grasp the risks and changes that technological change could bring about for their jobs.
Promoting equity and inclusiveness in learning opportunities involves increasing participation in upskilling and retraining among, for example, disadvantaged groups refining the type of training offered so that it fulfils the learning needs and objectives of each individual.
There are many other factors that hinder adults from participating, such as financial and time constraints (related to work or family obligations), insufficient prerequisites for participation and lack of interest in the training on offer. Studies show that participation is often highest among individuals who face low barriers to participation and reap high individual returns. However, the key challenge is to reach those groups that would most benefit the most from accessing high-quality learning opportunities, and whose participation would yield higher social returns. For the group of adults who are disengaged from learning, outreach is essential.
Information on quality of training programmes and providers is essential for individuals and employers to make informed decisions on adult learning (OECD, 2019[13]). As some training activities do not always lead the desired outcome or may not be perceived as useful by participants, monitoring and evaluation of training programs is essential. Additionally, quality assurance is also seen as a key tool to create trust in the adult training system, especially in non-formal training and especially among adults with low qualifications. The granting of a quality assurance label can also act as a marker of prestige and credibility for providers.
Creating responsive skills systems through employer engagement
In the context of changing skill needs brought about by megatrends such as technological change, demographic shifts and globalisation, high-quality information on skills supply and demand is essential to ensure that learning opportunities are aligned with skill needs. Solid information about skill needs is therefore essential, and countries take different approaches to developing qualitative and quantitative information on skill needs. Quantitative analysis based on official statistics or big data can feed into complex statistical models that assess the balance between skills supply and demand. These are often complemented with qualitative insights, such as employer surveys and foresight scenarios. Stakeholder engagement, notably through social dialogue, is key to ensuring that skills assessment and anticipation exercises provide information in a format and at a level that is consistent with policy objectives and which can inform and motivate policy action.
Engagement of all relevant parties and mechanisms that help reach consensus are instrumental to ensuring that the required policy responses to skills imbalances are put in place. A variety of mechanisms have proven successful in helping to reach consensus, ranging from informal and ad-hoc consultations, to the setting up of independent bodies such as national skills advisory groups, to formal mandates to foster dialogue among stakeholders. Sectoral bodies provide the most favourable opportunities for both employer and trade union involvement in VET and skills policy formulation and implementation.
Strong VET systems, drawing on social partner engagement, yield benefits to employers by increasing the pool of qualified labour, and benefit students by facilitating their transition to skilled employment. The engagement of social partners in the design of VET programmes and policies often happens through employer associations and trade unions which represent the interest of groups of employers and workers. Social partners are involved in VET at different levels. They can sit on bodies advising national and regional governments, collaborate with local VET providers, and provide input into VET programmes corresponding with their sectors. Irrespective of the exact institutional organisation, effective arrangements should allow social partners to provide their input into VET regularly, in a timely manner, and in all relevant areas. (OECD, 2023[11])
In many OECD countries, schools share the responsibility for delivering VET with companies, i.e. some vocational education and training is provided in schools and some by companies. Employers’ provision of training to students, i.e. work-based learning (WBL), represents their largest contribution to VET. WBL refers to learning through participation and/or observation of work under the supervision of an employer. The intensity of WBL differs across VET programmes. In some VET programmes a mandatory WBL component represents an important element of the learning experience. Other VET programmes are more dependent on schools, with work-based learning being an optional and sometimes minor element. In programmes with longer periods of WBL students typically contribute with some productive work, whereas the amount of productive work performed by students in shorter WBL is limited (OECD, 2023[11]). OECD data show that in Chile only 11% of upper-secondary VET learners are in programmes with a substantial WBL component (OECD, 2023[4]). In Colombia, all upper-secondary VET programmes have some work-based learning, but it is only optional (OECD, 2023[4]).
When employers are reluctant or unable to offer WBL places, the government and social partners may want to promote it through a range of incentives. These incentives include financial incentives such as rewarding employers who train with additional funding or by making employers who do not train to pay. Employers’ capacity to train can also be supported with measures other than financial ones. Provision of training requires additional efforts from the employer such as filling administrative duties, organising training on the site, appointing and often training employees who are responsible for trainees. Some employers may not feel able to train students as they lack training capacity. Training capacity depends on the quality of trainers, training methods and training equipment. It is typically less well developed in small companies that do not have dedicated training arrangements hindering their capacity to offer training to students. Small companies may therefore particularly benefit from measures designed to enhance training capacity, such as training for trainers, assistance with administrative work and sharing responsibility for training. When individual VET schools play an active role in reaching out to employers they may need support in developing their links with employers and their capacity to foster WBL. Sometimes this support may come from organised bodies, and it will often also be helpful for schools to find means to share their experiences. (OECD, 2023[11])
A strategic and comprehensive approach to skills policies – formalised in a regional skills strategy – could help build resilient and adaptable skills systems. Such a regional skills strategy can help the Latin America region to build a shared understanding of its skills challenges and identify policy priorities and opportunities for regional cooperation that can help the region to thrive in response to changing economic, social and environmental conditions. This approach is crucial for addressing social inequalities and enhancing social mobility.
A regional skills strategy can make a number of important contributions to Latin America, including:
Providing high quality analysis to identify opportunities, policy priorities and areas with the most potential to improve skills outcomes.
Providing regional peer-learning opportunities to help countries to share their experiences with each other to widen and deepen understanding of policies that work.
Identifying international good practices to support evidence-based policy making.
Strengthening stakeholder engagement to raise awareness among key actors and generate support for action to implement policy reforms.
Making recommendations for improving skills outcomes as well as strengthening regional cooperation with a view to ensuring that skills policies are coherent and mutually reinforcing, and promote equity in education and training opportunities.
Raising awareness to generate support for action to implement policy reforms.
Skills are essential for tackling inequalities and ensuring that no-one is left behind in and increasingly interconnected and rapidly changing world. Skills are key for individuals and particularly vulnerable groups to adapt and succeed in labour markets and societies, and social mobility depends greatly on equipping individuals with the right skills at the right time.
Latin America has made enormous achievements in education and skills in recent decades, in particular through improved enrolment rates in education. However, challenges remain for effective skills development and use. While VET is known to contribute to smooth school-to-work transitions, especially when involving substantial work-based learning, enrolment in upper-secondary VET programmes in Latin American OECD countries remains below the OECD average. Likewise, despite the evident need for individuals to upskill and reskill in times of changing skill needs, participation rates in adult learning are strikingly low in several Latin American countries. Moreover, solid foundational skills are key building blocks for lifelong learning, but a large share of adults in Latin American countries participating in the OECD Survey of Adults Skills are unable to solve problems in a technology-rich environment at a basic level. In fact, many adults lack even the very basics to operate a digital device.
Bridging the skills gap will require identifying changing skills needs for different groups in rapidly changing societies, and creating education and training that are responsive to changing skills needs. In particular, efforts are needed to strengthen VET in Latin American countries in order to make it an attractive choice for different types of learners, including those who are a risk of dropping out of the education system. Likewise, adults should be encouraged and supported to engage in lifelong learning, and this involves removing barriers to participation – especially for disadvantaged groups. Career guidance is key to inform young people and adults about the importance of VET and adult learning and the available possibilities and support mechanisms. Investments in access to training should be coupled with efforts to improve the quality of training and align it with the needs of labour markets and society. Making use of solid evidence about skill needs is therefore crucial when designing training programmes and policies. Social partners should play a key role in this respect, through their involvement in consultation or advisory bodies and through the delivery of work-based learning.
Moving towards a future-ready skills system will require a strategic and comprehensive approach to skills policies. A regional skills strategy for Latin America can help build a shared understanding of the region’s skills challenges and identify policy priorities and opportunities for regional cooperation – which will ultimately contribute to resilient and adaptable skills systems in the region.
References
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