Most emerging economies are characterised by lagging levels of productivity. While economic growth has been robust in much of the emerging world during the last two decades, it
has generally been grounded on factor accumulation, with marginal contributions from productivity. With the economic literature pointing to human capital and skills as a key conduit
of productivity, the inability of firms to find the skills they need appears as a key brake on development. This paper aims to identify the dimensions where this skill gap is more prevalent,
particularly across emerging regions and industries. We devise an empirical analysis that uses two alternative specifications based on limited dependent variable analysis. The results place
Latin America as the emerging region where firms have the greatest problems derived from the lack of adequate skills, well ahead of emerging Asia and Europe, but also of sub-Saharan Africa.
In terms of sectors, two advanced manufacturing industries (machinery and motor vehicles) are particularly affected by this relative scarcity of adequately trained workers. Policy
recommendations hinge on the need to solve the mismatch between the provision of skills by educational systems and the needs of the economy.
Mind the skills gap! Regional and industry patterns in emerging economies
Working paper
OECD Development Centre Working Papers
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Abstract
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4 October 2021