This chapter examines the relationship between skill levels and social mobility, using data from the four Latin American countries that participated in the first cycle of the Survey of Adult Skills (PIAAC): Chile, Ecuador, Mexico, and Peru. The findings indicate that skill levels in the region are lower compared to other participating countries and are heavily influenced by socio-economic background. The data reveals improvements in skill levels associated with educational attainment; however, there is also a strong correlation between an individual's educational achievement and their parents' educational background in the region. These results, indicative of the intergenerational transmission of socio-economic status, are contrasted with the experiences of other countries that have improved their skill levels and promoted social mobility through investment in education.
Social Mobility and Inequality in Latin America and the Caribbean
Abstract
Latin America and the Caribbean’s unique biodiversity and young and diverse population offer important growth opportunities. However, for these to be leveraged, the persisting challenges of poverty and inequality need to be addressed. A skilled workforce, capable of adapting quickly to a fast-changing world, is the cornerstone of a country's growth and development. Yet, fostering a skilled workforce requires strong education systems and training programs.
The challenge in Latin America and the Caribbean (LAC) is nuanced. Despite progress in terms of secondary education coverage, the region shows lagging tertiary attainment, as only a small share of adults has attained at least short-cycle higher education. As a result, skills and productivity levels are low in the LAC region compared to OECD countries and other emerging regions (OECD, 2021[1]).
The general lack of skills across Latin American and Caribbean countries creates a mismatch between labour demand and supply, leading to high unemployment rates among individuals with low educational attainment or skill levels, contributing to significant inequalities in the region (OECD, 2023[2]). Furthermore, those with low skill levels are more likely to work in the informal sector, a phenomenon that is highly prevalent in Latin America and the Caribbean. Informal jobs do not offer social protection to employees, adversely affecting their well-being and reducing their chances of improving their socio-economic status over their lifetime (Sehnbruch, Apablaza and Foster, 2024[3]) (OECD, 2018[4]).
Inequality in LAC spans across different dimensions, including access to the labour market and education services. Disadvantages are then transmitted to future generations, and the children of low-skilled, low-educated adults are unlikely to have access to quality education and formal training. Since both educational attainment and skills are associated with increased employment and wages, the lack of access to quality education and training prevents them from improving their socio-economic status compared to their parents, hindering “intergenerational social mobility” (OECD, 2023[2]), (De La Mata, 2023[5]) and consequently, existing inequalities continue to persist (Hout and DiPrete, 2006[6]).
Access to quality education and opportunities for skill development are clearly crucial for promoting inclusive growth in the region. However, individuals from disadvantaged socio-economic backgrounds often face limited chances for success. While no country is free from socio-economic inequalities, some perform better than others.
Education, skills, and labour opportunities are key factors in addressing inequality and enhancing mobility. Therefore, for Latin America and the Caribbean to achieve inclusive growth, it must implement policies and practices that equip its population with the necessary skills to join the workforce effectively, regardless of their socio-economic background (Arnold et al., 2024[7]) (OECD et al., 2022[8]). Furthermore, education systems and training programs must be of high quality. Although the region has made significant progress in educational attainment over the past few decades, workforce productivity and skill levels still lag behind (OECD, 2023[2]).
Skills are increasingly important in today’s fast-paced labour market, especially with the growing demand for high-skilled workers due to digitalisation. If access to quality education and skill development remains limited to the most advantaged groups, socio-economic disparities in the region may worsen (OECD, 2021[1]) (OECD, 2022[9]).
In this context, the OECD Survey of Adult Skills represents the largest and most comprehensive international assessment of adult skills (ages 16-65) ever conducted. It provides valuable data and insights by measuring skill levels in participating LAC countries and facilitates the analysis of the relationship between education systems and the labour market, as well as the integration of specific subgroups within the population (OECD, 2013[10]). The first cycle of the survey was conducted through three rounds of data collection, encompassing a total of 39 countries and economies. This includes four Latin American countries: Chile in the second round (2014-2015), and Ecuador, Mexico, and Peru in the third round (2017) (OECD, 2019[11]) (OECD, 2023[2]).
PIAAC assesses adults aged 16 to 65 in literacy, numeracy, and problem-solving in technology-rich environments (PSTRE), all of which are essential for effective participation in the labour market and society. The assessment also gauges the use of information and communication technologies, the use of various skills at work and home, and essential competencies like collaboration and time management in their jobs (OECD, 2019[11]).
It is also important to note that the World Bank, in collaboration with the OECD, implemented a comparable literacy assessment to PIAAC in select urban areas of Bolivia and Colombia - under the Skills Towards Employability and Productivity (STEP) Survey. This program collected data on adult skills in low- and middle-income countries. While the results are not representative of the entire adult population, as the survey was limited to specific urban areas, they provide valuable insights for this report (OECD, 2023[2]).
PIAAC data reinforces the significance of skills and educational attainment, revealing a strong correlation with higher employment levels and increased wages. Across OECD countries, individuals with low literacy skills are more than twice as likely to be unemployed, experience poorer health, and have lower participation in community and voluntary activities (OECD, 2023[2]). In contrast, LAC countries exhibit a weaker link between education and employment proficiency, suggesting that higher skill levels are indicative of better job quality (OECD, 2019[11]).
All Latin American countries that participated in PIAAC displayed low proficiency levels across all three domains assessed. Among them, Ecuador and Peru recorded the lowest mean scores and the highest proportions of working-age adults performing at the lowest proficiency levels. Although Chile and Mexico performed marginally better, their results still fell way below the OECD average. These outcomes align with assessments of school-age children, such as the Programme for International Student Assessment (PISA), in which LAC countries also obtained low results. This will be analysed in depth in Chapter 3.
This chapter will delve into Latin America’s workforce skills, and its distribution within the population. Using data from the OECD Survey of Adult Skills, the performance of the Latin American countries that participated in the first cycle of PIAAC will be briefly discussed, with an emphasis on the proficiency levels among different subgroups. The aim is to identify those groups of the population at a greater disadvantage regarding skills and social mobility. Additionally, the chapter will assess the impact of skill acquisition and the consequences of low skill levels in the region.
The findings are contextualised within the framework of the countries' economic development, highlighting social inequality and strategies to promote intra- and inter-generational mobility. From this perspective, skills empower individuals to collaborate, compete, and connect effectively, fostering both personal and collective advancement. Ultimately, the key takeaway is that enhancing the skill set of the region's population will provide a sustainable pathway for long-term inclusive growth and development in LAC.
Results in Latin American participating countries
In its first cycle, the Survey of Adult Skills (PIAAC) measured proficiency in three key information processing skills: literacy, numeracy and problem solving in technology-rich environments (PSTRE). This assessment was conducted over three rounds in 39 countries, including four Latin American countries: Chile, Ecuador, Mexico, and Peru. The survey included 245,000 adults aged 16 to 65, representing a total population of 1.15 billion people (OECD, 2024[12]).
In the context of the assessment, literacy is defined as “the ability to understand, evaluate, use and engage with written texts in order to participate in society, achieve one’s goals, and develop one’s knowledge and potential.” PIAAC was the first international survey to include digital texts as an integral part of its assessment to account for the increasing role of digital devices and applications in generating, accessing, and storing written text. Numeracy is defined as the ability to access, use, interpret, and communicate mathematical information and ideas to engage in and manage the mathematical demands of a range of situations in adult life. Finally, PSTRE is described as “using digital technology, communication tools and networks to acquire and evaluate information, communicate with others and perform practical tasks.” This skill set focuses on “the abilities to solve problems for personal, work, and civic purposes by setting up appropriate goals and plans, by accessing and making use of information through computers and computer networks”, making it particularly relevant for today’s workforce.
All three domains’ results are reported on a scale ranging from 0 to 500. Proficiency levels, defined by specific score-point ranges, help interpreting the scores, as each level is associated with a description of the concrete tasks that adults scoring in that range are able to perform.
Both literacy and numeracy have six proficiency levels (from below Level 1 to Level 5), while PSTRE has four (from below Level 1 to Level 3). The literacy and numeracy results are displayed as mean proficiency scores for each country and the percentage of the population at each proficiency level.
For PSTRE, average proficiency scores are not reported because only a selected share of the population (those with sufficient familiarity with computers) was able to complete the assessment. As a result, average scores in PSTRE do not cover the entire adult population.
Source: (OECD, 2013[10])
In the four Latin American countries, the data revealed significant disparities in skill levels among countries, exhibiting low overall proficiency in literacy, numeracy, and problem-solving in technology-rich environments (PSTRE). These four countries ranked among the lowest in literacy and numeracy. For PSTRE, a significant proportion of their populations lacked the basic digital skills necessary to even complete the assessment.
In literacy, nearly half of the adults (44.6%) in participating OECD countries and economies scored at the three highest levels (Level 3, 4 and 5). In contrast, only 1 in 8 adults in the Latin American countries achieved similar scores. While less than 20% of adults in OECD countries scored at Level 1 or below, over half of adults in Chile, Ecuador, Mexico, and Peru fell into the lowest proficiency categories (Figure 2.1). The average literacy score across all countries was 266 points; Mexico (222), Chile (220), Peru (196), and Ecuador (196) scored significantly lower (OECD, 2023[2]). Their performance in the literacy assessment situates all four Latin American countries at the bottom of the distribution among all participating countries.
These results are concerning, as studies have shown that low literacy scores are associated with a higher likelihood of unemployment or working in the informal sector and low wages. Across the OECD countries and economies that took part in the Survey of Adult Skills, an individual who scores 48 points higher on the literacy scale (equivalent to one standard deviation) is 0.8 percentage points more likely to be employed than unemployed (OECD, 2016[13]). This has implications not only for the individuals affected, but also for future generations.
Percentage of adults scoring at each proficiency level in literacy
Note: Adults in the missing category were not able to provide enough background information to impute proficiency scores because of language difficulties or learning or mental disabilities (referred to as literacy-related non-response).
Countries and economies are ranked in descending order of the combined percentages of adults scoring at Level 3 and at Level 4/5.
Source: Survey of Adult Skills (PIAAC) (2012, 2015, 2018), Table A2.1.
Percentage of adults scoring at each proficiency level in numeracy
Note: Adults in the missing category were not able to provide enough background information to impute proficiency scores because of language difficulties, or learning or mental disabilities (referred to as literacy-related non-response).
Countries and economies are ranked in descending order of the combined percentages of adults scoring at Level 3 and at Level 4/5.
Source: Survey of Adult Skills (PIAAC) (2012, 2015, 2018), Table A2.3.
In numeracy, an average of 42.2% of adults across participating OECD countries and economies scored at the highest levels, Level 3 or higher. In Latin American participating countries, however, the proportions were much lower, with only 11.9% in Chile, 8.9% in Mexico, 5.6% in Peru, and only 3.6% in Ecuador. On the other hand, about three-quarters of adults in Ecuador (76.8%), and Peru (74.8%), as well as 61.9% in Chile and 60.1% in Mexico, scored at Level 1 or below (Figure 2.2). The average numeracy score for OECD countries is 262 points, whereas Latin American countries recorded significantly lower scores: Peru (179), Ecuador (185), Chile (206), and Mexico (210). This places all four Latin American countries that participated in the assessment at the bottom of the proficiency rankings for adults. Similar to literacy, numeracy results can impact adults in terms of employment and earnings. In terms of numeracy, those who score one standard deviation higher on the numeracy scale are 1.6 percentage points more likely to be employed rather than unemployed (OECD, 2016[13]).
The share of the population for which PSTRE proficiency estimates are available varies widely. Therefore, the focus is on defining the population proportions at each proficiency level instead of comparing average proficiency scores. PIAAC provides two related insights into adults’ ability to manage information in technology-rich environments. First, it identifies the proportion of adults who are familiar with computers to perform information-processing tasks. Second, it assesses the proficiency levels among these adults in solving problems they are likely to encounter as workers, citizens, and consumers in a technology-rich world (OECD, 2023[2]).
On average, 29.7% of adults in OECD countries score at the higher levels in PSTRE, Levels 2 or 3. In Latin American countries, these proportions are much lower: Chile has only 14.6% of adults, followed by Mexico (10.2%), Ecuador (5.2%), and Peru (6.6%). On the other hand, 43% of adults across all participating OECD countries scored at Level 1 and below. In Ecuador, a similar proportion (43.1%) was observed, while in Chile, the figure was nearly 10 percentage points higher at 52.4%. Additionally, adding to those with low levels of digital skills, a large share of adults in Chile (25.2%), Ecuador (32.9%), Mexico (39.3%), and Peru (43.6%) failed the core digital skills test or lacked the computer experience to undertake the assessment. As a result, many adults may not even achieve the lowest proficiency levels (Figure 2.3).
The low skill levels in the four participating Latin American countries are concerning as low-skilled workers are less productive and more likely to work in the informal sector, two significant issues in Latin America (OECD, 2016[13]; Sehnbruch, Apablaza and Foster, 2024[3]). Given that informal sector workers lack social protection and that low-skilled individuals face greater unemployment risks, their vulnerability to poverty and barriers to social mobility become evident (Arnold et al., 2024[7]). Moreover, if opportunities for human capital accumulation are not equitably distributed across the population, the effectiveness of formal education and training in promoting inclusive growth is significantly limited.
Proficiency in problem solving in technology-rich environments among adults
Note: Adults included in the missing category were not able to provide enough background information to impute proficiency scores because of language difficulties or learning or mental disabilities (referred to as literacy-related non-response). The missing category also includes adults who could not complete the assessment of problem solving in technology-rich environments because of technical problems with the computer used for the survey. Cyprus, France, Italy and Spain did not participate in the problem solving in technology-rich environments assessment.
Countries and economies are ranked in descending order of the combined percentages of adults scoring at Level 2 and 3.
Source: Survey of Adult Skills (PIAAC) (2012, 2015, 2018), Table A2.7.
By Socio-economic background
PIAAC collects information on parents’ educational attainment, which serves as a good proxy for socio-economic background. The data highlights the significant impact of someone’s background on adult skill levels and the transmission of inequalities. Figure 2.4 illustrates the disparity in literacy proficiency among individuals with varying levels of parental educational attainment. Results show that across the three rounds of the study, adults with at least one tertiary-educated parent score on average 41 points more than adults from families in which neither parent attained upper secondary education.
In Ecuador and Mexico, the differences between both groups are very close to the OECD average, at 41 score points. In contrast, they are much higher in Chile with 51 points and Peru with 55 points, meaning that in these two countries parents’ education is a very important predictor of skills, which makes social mobility more challenging.
These differences are still large after accounting for personal characteristics such as own educational attainment, social background, engagement with literacy, numeracy, and ICT, among others. Against the OECD average difference of 20 points, Mexico records a slightly lower difference of 18 points. However, Chile, Ecuador and Peru record larger differences of 23, 24 and 29 points respectively.
These wide gaps related to parents' educational levels can be attributed to both direct and indirect socio-economic influences on children's skills. Considering the four PIAAC countries - Chile, Ecuador, Mexico, and Peru - and the additional urban areas in Bolivia and Colombia - included by the World Bank - it is possible to observe in Figure 2.5 that the mother’s educational attainment is an important predictor of an individual’s education level, particularly for women (OECD, 2023[2]).
When comparing the participating LAC countries to the OECD, it becomes clear that the impact of mothers' education on children's outcomes is much stronger in the former group. This is evidenced by the fact that men and women whose mothers have incomplete upper secondary education or less are four times more likely than their OECD counterparts to achieve no more than a primary education (OECD, 2023[2]). When considering mothers’ educational attainment among LAC countries participating in PIAAC, 39% of women whose mothers had some tertiary education complete upper secondary education and 45% completed tertiary education. In contrast, only 30% of women whose mothers had secondary education or lower achieved upper secondary, and just 16% completed tertiary education. For men, those with mothers who had a tertiary education are more likely to have completed upper secondary (42%), but less likely to have obtained a tertiary degree (40%). Similarly, only 16% of men with mothers who had upper secondary education or lower earned a tertiary degree. These men are also less likely than women to complete only primary education (24%) and more likely to finish upper secondary (33%). In comparison, nearly a third of individuals across OECD countries attain a tertiary degree, even when their mothers have only upper secondary education or lower. Although parental education affects their children, the introduction of age in the analysis reveals a contrasting trend in educational mobility between the OECD and LAC, according to PIAAC and STEP data. Among different age cohorts of PIAAC respondents, educational mobility is declining for younger generations in OECD countries, while seems to be slightly increasing for younger generations in Latin America. (OECD, 2018[14]).
This trend is largely driven by the expansion of primary and secondary education in LAC, particularly for individuals in lower income brackets and those from households with low educational attainment (Neidhöfer, Serrano and Gasparini, 2018[15]). However, at higher education levels, such as short-cycle tertiary education and above, access has increased more significantly for those from middle and high socioeconomic backgrounds. This shift has limited education's ability to promote skill acquisition and enhance social mobility (OECD, 2021[16]). A widely recognised finding is that family influences account for 45-50% of the variation in years of schooling (Salvanes and Bjorklund, 2010[17]).
Differences in literacy proficiency, by parents' educational attainment
Note: All differences in Panel B are statistically significant. Unadjusted differences are the differences between the two means for each contrast category. Adjusted differences are based on a regression model and take account of differences associated with other factors: age, gender, education, immigrant and language background. Only the score-point differences between two contrast categories are shown in PanelB, which is useful for showing the relative significance of parents' educational attainment with regard to observed score-point differences. Upper secondary includes ISCED 3A, 3B, 3C long and 4. Tertiary includes ISCED 5A, 5B and 6. The adjusted difference for the Russian Federation is missing due to the lack of the language variables.
Countries and economies are ranked in ascending order of the unadjusted difference in literacy scores (at least one parent attained tertiary minus neither parent attained upper secondary).
Source: Source: Survey of Adult Skills (PIAAC) (2012, 2015, 2018), Tables A3.1(L) and A3.11(L).
Note: For STEP, tertiary includes ISCED 2011 Level 4 (post-secondary non-tertiary) or higher educational attainment. LAC statistics only include PIAAC countries. OECD statistics exclude Latin American member countries.
Source: Authors’ calculations using PIAAC data (OECD, n.d.[5]) for Chile, Ecuador, Mexico and Peru and STEP data (World Bank, n.d.[6]) for urban Bolivia and urban Colombia.
Education is a key factor in facilitating upward social mobility (Hout and DiPrete, 2006[6]). While increases in educational attainment in LAC should ideally enhance overall skill levels among workers, the effectiveness of skill acquisition will depend on the quality of the education system and its ability to prepare students for the workforce.
PIAAC data provides evidence of improved performance with higher educational attainment. In all assessed countries and economies, adults with higher levels of educational attainment perform better, and Chile, Ecuador, Mexico, and Peru are no exception.
Overall, OECD countries participating in PIAAC have an average literacy score difference between tertiary-educated adults and those with below upper secondary education of 61 points. In Latin America, Ecuador and Mexico show smaller differences (45 and 52 points respectively), while Peru and Chile exhibit larger gaps (71 and 77 points respectively).
Figure 2.6 shows that in Chile, Ecuador, Mexico, and Peru, literacy levels are consistently lower than the OECD average across all educational levels. In Peru, adults without an upper secondary qualification score an average of 157, which is lower than their peers in Chile (177), Ecuador (174), and Mexico (201). Consequently, 67% of these adults in Peru score below Level 1 in literacy, while Ecuador follows with 50% of adults scoring below this level. In contrast, tertiary-educated adults in Peru exhibit higher literacy proficiency than their peers in Ecuador, yet although both countries still trail behind Chile and Mexico. Among those with upper secondary education or less, Mexican adults show the highest proficiency in literacy and numeracy among Latin American participants, with their tertiary-educated adults' scores aligning with those in Chile, but still much lower than OECD countries.
Differences in proficiency related to educational attainment are also visible in PSTRE. In most countries, a significant share of low-educated adults (those without upper secondary education) lacked the basic ICT skills needed for the assessment. A total of forty-one percent of low-educated respondents across OECD countries did not receive a score in this domain - meaning that they did not have the necessary digital skills to undertake the survey with even higher shares in Latin America: about 60% in Chile, nearly 70% in Ecuador and Mexico, and over 85% in Peru (Figure 2.7). Among low-educated adults who did take the assessment, only around 7% across OECD countries scored at Level 2 or 3, compared to approximately 1% in Mexico and even lower in the other Latin American countries. In contrast, nearly 48% of tertiary-educated adults in OECD countries scored at the highest levels, 2 or 3, with lower proportions of the population performing at similar levels in Latin America: 12% in Ecuador, 14% in Peru, 26% in Mexico, and 30% in Chile.
In summary, parents’ educational attainment has a greater impact on individuals’ skill-levels in Latin America compared to the OECD. This may stem from the resources that highly educated parents can provide and, more importantly, from the higher educational achievements of their children. This strong influence on skills and educational attainment hinders education’s role in promoting social mobility, as attainment and, thereby, human capital accumulation are conditioned by socio-economic background. This situation negatively affects the region in two ways: first, capable individuals from lower socio-economic backgrounds are unable to realise their potential and contribute more to society; second, it perpetuates inequalities across generations.
The overall underperformance of youth and adults in the participating LAC countries could be indicative of the quality of the education systems in the region. If education systems are not equipping its workforce with the necessary skills, countries in Latin America will continue to exhibit low productivity levels and general low growth levels (IMF, 2024[18]).
Note: All differences in Panel B are statistically significant. Unadjusted differences are the differences between the two means for each contrast category. Adjusted differences are based on a regression model and take account of differences associated with other factors: age, gender, immigrant and language background and parents' educational attainment. Only the score-point differences between two contrast categories are shown in Panel B, which is useful for showing the relative significance of educational attainment with regard to observed score-point differences. Lower than upper secondary includes ISCED 1, 2 and 3C short. Upper secondary includes ISCED 3A, 3B, 3C long and 4. Tertiary includes ISCED 5A, 5B and 6. Where possible, foreign qualifications are included as the closest corresponding level in the respective national education systems. The adjusted difference for the Russian Federation is missing due to the lack of the language variables.
Countries and economies are ranked in ascending order of the unadjusted differences in literacy scores (tertiary minus lower than upper secondary).
Source: Survey of Adult Skills (PIAAC) (2012, 2015, 2018), Tables A3.1(L) and A3.2(L).
Percentage of low- and high-educated adults scoring at Level 2 or 3 in problem solving in technology-rich environments or having no computer experience (adults aged 25-65)
Note: For the purpose of computing the percentages presented in the graph, adults participating in PIAAC has been classified in one of the following mutually exclusive categories: opted out of the computer-based assessment; no computer experience; failed the ICT core test; below Level 1, at Level 1, at Level 2, at Level 3 (of the problem solving in technology-rich environments scale). For more detailed results for each category see the corresponding source table below. Lower than upper secondary includes ISCED 1, 2 and 3C short. Upper secondary includes ISCED 3A, 3B, 3C long and 4. Tertiary includes ISCED 5A, 5B and 6. Where possible, foreign qualifications are included as the closest corresponding level in the respective national education systems. Cyprus¹, France, Italy and Spain did not participate in the problem solving in technology-rich environments assessment.
Countries and economies are ranked in descending order of the combined percentages of adults with tertiary attainment scoring at Levels 2 or 3.
Source: Survey of Adult Skills (PIAAC) (2012,2015), Tables A3.3(P).
Gender
Historically, women have been excluded from formal education and workforce participation, making gender another socio-demographic factor that can influence human capital accumulation and, consequently, a group's ability to ascend the social ladder. Notably, gender differences are more pronounced among older age groups. This is due, in part, to women's educational attainment gradually reaching parity with men's. Additionally, even with similar levels of education, women and men often pursue different occupations or face distinct labour market outcomes. Figure 2.8 records the gender gap in literacy and numeracy skills, both unadjusted and adjusted for other personal characteristics. As can be observed, there is a larger gap between women and men in numeracy than in literacy. Among LAC countries, Chile (21 points) and Peru (16 points) especially depict a larger gender gap than the OECD average (11 points) in numeracy. However, these gaps decrease to 5 and 8 score points, respectively, among adults aged 24 and under, falling below the OECD average. Mexico (11 points) and Ecuador (9points) have a gender gap in numeracy that is very close to the OECD average. This and the narrower gender gap displayed by younger cohorts show the impact of formal education on skills (OECD, 2023[2])Notably, adjusting for education, immigrant background, language, and parents' educational attainment does not significantly alter these results. Nevertheless, despite women gaining access to education over the past decades, they are still influenced by their parents’ educational attainment, as shown by Figure2.5.
Additionally, these differences could likely reflect the differential education and subsequent occupational choices of men and women, affecting the opportunities to practise and maintain a level of high proficiency. For example, the lack of women in STEM ─ Science, Technology, Engineering and Mathematics ─ fields further discourages the next generation of girls from pursuing careers in these fields, reinforcing stereotypes that label STEM jobs as more “masculine” (Encinas-Martín and Cherian, 2023[19]). Thus, these pathways of inequality persist and disrupt the upward mobility of women.
PIAAC data also reveals that in the region, highly-skilled occupations such as managerial and professional roles have a slightly higher proportion of men (52.5%) than women (47.6%). However, the opposite is true in medium-skilled occupations, where women account for 59% of the labour force.1 An analysis by occupation finds a striking over-representation of men among science and engineering professionals, 70.2% of whom are men. In contrast, women are over-represented among health professionals (71.4% women) and teaching professionals (62.5% women) (OECD, 2023).
In summary, gender differences, although higher than OECD levels, are becoming less prevalent in Latin America and the Caribbean countries due to increased access to education by younger women. Nevertheless, women are also susceptible to the impact of socio-economic background in terms of educational attainment, which in turn affects their skills and social mobility. Moreover, gender stereotypes and social conventions are important reasons why young women continue to shy away from STEM studies, which are high-paying and have the potential to improve their living conditions considerably.
Difference in mean score between men and women
Note: Statistically significant differences are marked in a darker tone. Unadjusted differences are the differences between the two means for each contrast category. Adjusted differences are based on a regression model and take account of differences associated with other factors: gender, education, immigrant background, language, and parents' educational attainment. The adjusted difference for the Russian Federation is missing due to the lack of the language variables.
Countries and economies are ranked in ascending order of the difference in numeracy scores (men minus women).
Source: Survey of Adult Skills (PIAAC) (2012, 2015, 2018), Tables A3.1(L), A3.1(N), A3.8(L) and A3.8(N).
Skills are crucial for accessing and comprehending specialised knowledge domains. Because of this, across OECD countries participating in PIAAC, those with higher scores are more likely to be employed and at lower risk of poverty. In the four Latin American countries, however, there is no statistically significant relationship between employment and education or proficiency. Employers often struggle to screen candidates effectively, and weak social protection systems lead adults to accept any available job. Consequently, education and proficiency have a greater impact on the quality of employment rather than the quantity of jobs in the region. (OECD, 2019[11]).
Note: Results obtained using a regression-based decomposition following the methods in Fields (2003). Each bar summarises the results from one regression and its height represents the R-squared of that regression. The sub-components of each bar show the contribution of each factor (or set of regressors) to the total R-squared. The Fields decomposition is explained in more detail in Box 5.4 of the OECD Employment Outlook 2014 (OECD, 2014b). The dependent variable in the regression model is the log of hourly wages, including bonuses in purchasing power parity-adjusted USD (2012). The regressors for each factor are: years of working experience and its squared term for "experience"; proficiency in literacy and numeracy for "proficiency"; years of education for "education"; and gender, marital status, migration status and language spoken at home for "individual characteristics".
Countries ranked in descending order of contribution of proficiency, education, field of study and experience to the variation of hourly wages.
Source: Survey of Adult Skills (PIAAC) (2012, 2015, 2018), Table A5.3.
In addition to employment, skill levels, and other relevant factors such as educational attainment, field of study and experience have an impact on earnings. On average, across OECD countries proficiency and educational attainment account for 26% of the variance in wages, while in Ecuador, Mexico and Peru they account for 20%. In Chile, on the other hand, they account for 29%; however, in countries like Singapore they explain almost half of the earnings variance (Figure 2.9).
A second issue related to low skill levels is informality. This ongoing challenge in Latin America and the Caribbean disproportionately affects individuals with lower educational attainment and skills. According to the International Labour Organisation (ILO), informality represents nearly 50% of total employment and is a significant factor contributing to inequality and social exclusion in the LAC region. Despite progress, informal employment can still account for 70% or more of employment in some countries (ILO, 2023[20]). Panel A in Figure 2.10 shows, the average years of education go up as we move up the socio-economic distribution, while the share of those employed in the informal sector goes down with higher levels of education (Panel B).
Source: Own calculations based on CEDLAS and the World Bank, 2018.
Informal workers often live in households where other members also work in the informal sector. Because of this, 47% of households in the region depend solely on informal work, whereas 68% depend on it to some degree (Arnold et al., 2024[7]). Since these workers do not have access to social protection - which, according to the World Economic Forum, is one of the 10 pillars of social mobility - informality creates a cycle in which low-skilled workers do not experience upward social mobility (ILO, 2014[21]) (World Economic Forum, 2020[22]). Because of the linkages between family conditions and educational attainment, children growing up in households led by low-skilled workers in the informal sector are less likely to attain higher education levels and experience social mobility. This creates a cycle which further exacerbates the issue of informality and inequality in the region.
At the aggregate level, the region’s lack of skill proficiency impacts productivity levels and the region’s ability to grow inclusively. The World Bank’s Enterprise Survey data revealed that about almost a third (28.6%) of firms in Latin America considered inadequately trained workforce a significant constraint, which means that workers might not meet their jobs’ demands, preventing LAC countries from escaping the middle-income trap (OECD, 2023[2]).
Source: World Bank (2024), GDP per capita (constant 2015 US$), https://data.worldbank.org/indicator/NY.GDP.PCAP.KD
In this context, the experiences of countries like Korea and Singapore are particularly relevant. Both nations had similar income levels to the participating LAC countries in the middle of the last century but have since undergone significant economic development (Figure 2.11), largely through investments in education (OECD, 2019[11]).
The impressive growth in Korea and Singapore has been attributed to public education expenditure and the promotion of private investment in higher education. Moreover, Korea's high-quality public education system has facilitated upward social mobility, surpassing levels seen in Germany, the United States, and the United Kingdom - unlike LAC countries, which experience low mobility, low education levels, and high inequality (OECD, 2018[4]; Kim, 2015[23]). Higher social mobility improves job matching, allowing talents to be better recognised, and allowing individuals to climb the social ladder (Jenkins, 2017[24]).
For Singapore and Korea, the post-war decades were associated with a rapid expansion in education, especially tertiary education. This is discernible through the different proficiency levels in literacy attained by different age segments of the population in the Survey of Adult Skills. As Figure 2.12 shows, both Singapore and Korea show lower mean literacy scores when compared to the OECD average for those aged 45 and more. However, these countries have successfully improved the proficiency of successive generations, with younger cohorts now ranking among the highest performers. This proves that sustainable improvement in the population's skills is feasible, but it demands a sustained, long-term commitment and effective, ongoing investment in education and training (OECD, 2019[11]).
Note: Countries ranked in ascending order by performance of those aged 55-65.
Source: Survey of Adult Skills (PIAAC) (2012, 2015, 2018), Tables A3.1(L) and A3.5(L).
Latin American countries have recently expanded educational opportunities at the lower secondary level, and younger generations exhibit slightly higher skill levels than their older counterparts. However, across all educational levels, adults in the region demonstrate lower average performance compared to OECD countries and other high-income partners. This suggests a clear indication of lower-quality education systems that hinder social mobility and perpetuate persistent inequalities.
PIAAC data indicates that in Latin America, inequality is perpetuated across generations, with socio-economic background significantly influencing individuals' educational attainment and skill levels, thereby affecting social mobility in the region. Furthermore, amid the digital transition that has heightened the demand for skilled workers, this issue may exacerbate inequality levels. Formal education is crucial for proficiency, as adults with higher educational levels, particularly those with tertiary education, demonstrate better skill levels. Gender disparities are more pronounced in the region compared to the OECD average, especially in numeracy. Although the gender gap appears to narrow among younger populations, it could widen again if women do not fully engage in the labour market. This underscores the need for improved educational attainment among young adults, particularly women, in Latin America. While educational attainment has seen significant growth in the region over the past decade, the proportion of low-qualified adults remains substantially higher than in OECD countries.
For inclusive growth, Latin America must not only continue to raise educational attainment levels but also enhance access to high-quality education. Despite progress, the skill levels of the workforce in Latin America still lag behind those in OECD countries, irrespective of educational attainment. With increasing digitalisation and labour markets transforming to accommodate to it, it will be imperative that countries in the region invest in high-quality education and training focused on productive and relevant sectors. In this context, Korea and Singapore serve as valuable models for LAC countries, having implemented public policies that facilitated rapid access to quality education. Additionally, the high share of adults with low skills poses an issue for the region. This situation adversely impacts enterprises, as almost 1 in 3 firms in Latin America considered inadequately trained workforce as a major constraint. The low skills level in the region is not only a problem for businesses but also for the workers themselves. Low skill levels are often associated with higher participation rates in the informal sector which does not offer social protection, a crucial aspect for social mobility.
References
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← 1. PIAAC employs the International Standard Classification of Occupations (ISCO). Occupations in groups 7-9 are considered low-skilled, those in groups 4 and 5 are classified as medium-skilled, and occupations in groups 1-3 are regarded as high-skilled.