May 3, 2016

THE SKILLS DEVELOPMENT

CHALLENGE IN

LATIN AMERICA:

Diagnosing the problems and

identifying public policy

solutions

October 20, 2016

2

Introductions and Overview

Nancy Murray Director, International Research Division,

Mathematica

3 |

3

Overview of today’s discussion:

• Sarah-Ann Lynch: Welcoming remarks

• Ariel Fiszbein: Presentation of findings

• Clemencia Cosentino: Importance of STEM in meeting the skills

development challenge

• Alexandria Valerio: Socio-emotional development and

entrepreneurship as responses

• Barbara Knox-Seith: How donors can respond to the

challenge

• Panel discussion and audience Q & A

4

Welcome

Sarah-Ann Lynch Senior Deputy Assistant Administrator for

Latin America and the Caribbean,

USAID

5

Presentation of Findings

Ariel Fiszbein Senior Fellow & Program Director, Education,

Inter-American Dialogue

Education and Skills Development for Employment in Latin America

Ariel Fiszbein

October 20, 2016

Increased Schooling of the Workforce

4.7 5.2

5.8

6.5

7.4

8.1 8.4

8.8 9.2

9.8

10.4

11.0 11.5

1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008 2013

Stage 2: Mid 1990s

Average completed Lower

Secondary

Stage 3: Mid 2000s

Average completed Upper

Secondary

Stage 1: End of 1960s

Average completed Primary

Years in which individuals in each cohort of reference turned 18 (expected age for completing upper secondary)

Average years of schooling for cohorts born between 1935 and 1995

Source: Adelman and Székely, 2015

A Diverse Region In Terms of Skills

Source: Author’s calculation using the SEDLAC y OECD dataset

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

GUA2011

HON2011

NIC2009

SAL2010

COS2010

PAR2011

BRA2011

DOM2011

COL2011

ECU2011

BOL2011

VEN2006

MEX2010

URU2011

PER2011

PAN2012

ARG2012 -

I

CHL2011

OECDav.

2012*

Calificaciones Bajas (0 a 8 años) Semi-calificada (9 a 13 años) Calificaciones Altas (más de 13 años)Low skills (0 to 8 years) High skills (13+ years) Medium skills (9 to 13 years)

Where is Latin America on the Path to

Skills Development?

0%

10%

20%

30%

40%

50%

60%

70%

80%

Time (years)

Low skills Medium skills High skills

A

B

Low Skills Medium Skills High Skills

Where is Latin America on the Path to

Skills Development?

0%

10%

20%

30%

40%

50%

60%

70%

80%

Time (years)

Low skills Medium skills High skills

GUA

COS BRA

COL

A

B

Low Skills Medium Skills High Skills

Where is Latin America on the Path to

Skills Development?

0%

10%

20%

30%

40%

50%

60%

70%

80%

Time (years)

Low skills Medium skills High skills

GUA

COS BRA

COL A

B

URU

PER

MEX

Low Skills Medium Skills High Skills

Where is Latin America on the Path to

Skills Development?

0%

10%

20%

30%

40%

50%

60%

70%

80%

Time (years)

Low skills Medium skills High skills

GUA

COS BRA

COL A

B

URU

PER

MEX

ARG

Low Skills Medium Skills High Skills

CHI

PAN

Companies that Identify Lack of Qualified

Personnel as a Significant Restriction (2010)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

OCDE = 17%

Source: WB Enterprise Survey

Percentage of Employers Who Report

Problems When Filling Vacancies

68

61

54

47 46 46 44

38 37

0

10

20

30

40

50

60

70

80

Perú Brasil México Colombia Costa Rica Panamá Guatemala PromedioGlobal

Argentina

Source: ManpowerGroup Talent Shortage Survey 2015

Global

average

Average Number of Weeks to Fill

a Vacancy by Region

Source: Aedo y Walker (2012) based on Almeida and Jesus (2011)

Secondary and Tertiary Education: Efficiency, Relevance, and Quality

Efficiency

Increased enrollment in secondary and tertiary

education, but with low graduation rates

Dropout Rates in Secondary Education

Have Fallen but Remain Too High

Source: ILO (2013) using ECLAC dataset in Panorama Social de América Latina (2012)

Dropout in Secondary Education Is High:

An Issue of Relevance?

Causes of school dropout in children between 13 and 15 years

Countries: Bolivia, Chile, Costa Rica, El Salvador, Honduras, Panamá, Paraguay, Dominican Republic

Source: GRADUATE XXI, IDB

Lack of interest Financial issues Household duties Others Work Access issues

Increasing Enrollment Rates in

Tertiary Education…

Source: UNESCO

53

37

23 22

19

35 34

80 84

51

29 29

43

63

0

10

20

30

40

50

60

70

80

90

Argentina Chile Colombia El Salvador México Perú Uruguay

2000 Último año disponible (alrededor de 2013)Last available year (circa 2013)

…But Low Graduation Rates

Countries Graduates every 100

Entrants

Japan, Denmark ≥ 80

United Kingdom, Russia, Germany, Canada,

Australia, Finland, Austria, Belgium, Netherlands,

Portugal, Switzerland, Slovakia

≥ 70 and < 80

Czech Republic, Sweden, Norway, France, Iceland,

Poland, Slovenia, Mexico, Peru

≥ 60 and < 70

United States, Hungary, New Zealand, Brazil,

Chile, Nicaragua, Paraguay, Ecuador ≥ 50 and < 60

Argentina, Colombia, Costa Rica, El Salvador,

Panamá, Uruguay ≥ 40 and < 50

Bolivia, Honduras ≥ 30 and < 40

Sources: Dataset of the Centro de Estudios de la Educación Argentina, Universidad de Belgrano (2015)

and World Bank database in SEDLAC 2012 (in Ferreyra, 2016)

Efficiency

Increase of enrollment rates in secondary and

tertiary education but low graduation rates

Individual approaches: How to support students

in danger of dropping out? – Financial aid

– Academic support

Systemic approaches: How to proceed with the

educational institutions? – Diversifying the supply (shorter programs)

– Increase regulatory pressure + financial incentives

Relevance

Companies complain about the lack of technical

skills of workers

Disparities in the Returns

% of Graduates of Higher Education with Positive and Negative Returns

Source: González-Velosa, Rucci, Sarzosa, Urzúa, 2015

Relevance

Companies complain about the lack of technical

skills of workers

Low level of diversification in supply?

Proportion of Students 15-17 Years Old

Enrolled in TVE

Source: Inter-American Dialogue & Mathematica Policy Research (2016)

0%

10%

20%

30%

40%

50%

60%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Paraguay El Salvador Honduras Guatemala Uruguay Mexico Colombia Peru

Tertiary Education:

Imbalance in the Supply Composition

0%

5%

10%

15%

20%

25%

30%

Engineering STEM

% of Graduates of Tertiary Education 2012 in Engineering and

STEM (Science, Technology, Engineering and Mathematics)

Source: NSF in Inter-American Dialogue & Mathematica, in press

Average STEM Canada, USA, Europe: 17 to 19%. LA: 14%

Relevance

Companies complain about the lack of technical

skills of workers

Low level of diversification in supply?

Soft skills deficit?

Demand of Skills Survey:

Valued Skills by Companies

Source: Desconectados (2012) in Urzúa (2015)

Technical Academic Socio-emotional

Relevance

Companies complain about the lack of technical skills of workers

Low level of diversification in supply?

Soft skills deficit?

Possible routes to align supply and demand: – Competency-based programs

– Better use of information to facil i tate decision-making for users

– Greater integration between the educational system and companies

Quality

Poor performance in secondary education

Let’s Remember: Quality is Extremely Low

Source: Bos, Ganimian y Vegas (2013, 2014)

PISA Results in Mathematics

Number of 15-year Old Students That

Obtained Highest Scores in PISA

Source: Urzúa 2015

Quality

Poor performance in secondary education

In general we do not have standardized measures of learning in tertiary education

Quality assurance: Based on inputs (not results/impact)

Accreditation processes not always mandatory and/or without consequences.

Allocation of resources does not take into account quality (nor relevance for the labor market)

Four Strategies for Change

1. More and

better

information

2. More

systematic use

of regulatory

policies

3. Greater use

of financial

incentives to

providers

4. Public-private

partnerships

Thank You!

Ariel Fiszbein afiszbein@thedialogue.org

Inter-American Dialogue

www.thedialogue.org

+1 202-822-9002

37

STEM and Gender

Clemencia Cosentino Senior Researcher,

Mathematica

38

Degrees Awarded in Engineering

39

Matching Engineers with Jobs

Source: https://www.census.gov/dataviz/visualizations/stem/stem-html/

40

Socio-Emotional Development and

Entrepreneurship

Alexandria Valerio Senior Economist, Education,

World Bank

41

Role of Donors

Barbara Knox-Seith Senior Education Advisor,

Bureau for Latin America and the Caribbean,

USAID

42

Panel Discussion

Barbara Knox-Seith

Alexandria Valerio Ariel Fiszbein

Clemencia Cosentino

Nancy Murray

43

Thank You

A Spanish version of the report is available at:

www.mathematica-mpr.com

and

http://www.thedialogue.org