The State of Skills Development in Latin America

On March 20, 2017, the Inter-American Dialogue hosted the launch of a new report published by CAF-Development Bank of Latin America called “RED 2016: More Skills for Work and Life: the Contribution of Families, Schools, Jobs, and the Social Context,” which analyzes skills development in Latin America.

Pablo Sanguinetti, Chief Economist at CAF, began the presentation with opening remarks on the current state of skills development in Latin America. Maria Lucila Berniell, Principal Economist at CAF, presented on the main themes of the report, which included: the need for more multi-dimensional skills (socioemotional, physical, and cognitive) in the region, the importance of skills development for economic and social development, and the roles that schools, workplaces, and family and social environments play in the formation of skills.

Berniell began the presentation by stating that Latin America needs better-distributed skills, in view of the low regional performance on the most recent PISA assessment. She explained that although access to education has improved significantly in the region, most Latin American countries still have a higher share of low-skilled labor. To improve skill levels in Latin America, there must be a focus on the development of socioemotional and physical skills, in addition to cognitive skills, since all three skills are essential for success in both work and life. Berniell supported this statement by explaining that most occupations with the highest salaries in Latin America require high levels of both cognitive and socio-emotional skills, and therefore these skills are important for labor market success at the individual level. At the aggregate level, countries with higher skilled populations tend to be more productive, innovative and have less inequality.

 Berniell ended the presentation with a discussion on various actors’ roles, such as schools, workplaces, families, and social environments in the formation of skills. Regarding the private sector’s role, Berniell highlighted the importance of high-quality apprenticeships and on-the-job training. She explained that entering the labor market through formal job experience leads to a higher probability of formal employment in the future; therefore the first job a person gets plays a crucial role for future success in the labor market.

The event ended with comments from Omar Arias, an Economist from the World Bank, and a Q & A session where audience members asked questions on a variety of topics including: the response of Latin American governments to the report and the level of collaboration needed between different government agencies for skills development initiatives. The main takeaway of the event is that, in order for Latin America to have better-distributed skills, there needs to be more innovative collaboration between the community, the private sector and government agencies on skills development policies.