Overcoming Latin America’s Skills Mismatch
Latin America could be on the verge of an epochal economic transformation – but only if employers can find workers with the skills they need. The way forward lies in expanding access to high-quality education, which would create the workforce needed to boost economic productivity, raise living standards, and reduce inequality.
WASHINGTON, DC – Latin America could be on the verge of an epochal transformation. Over the next few years, middle-income jobs – particularly in the services sector – are expected to account for nearly all of the region’s employment growth. Forecasters say that countries in the region could add approximately 14-23 million well-paying jobs through 2018 – if employers can find workers with the skills they need.
And therein lies the trouble. Latin America’s education systems are struggling to produce enough skilled workers to raise productivity. More than one-third of firms in the region cite employees’ low skill levels as a major business constraint. In order to boost economic growth, Latin America must invest in a skilled workforce. By expanding access to high-quality education, from public and private educators alike, the region’s countries will increase productivity, raise living standards, and reduce inequality.
Dealing with this labor market mismatch is long overdue. The first step toward ensuring that Latin America’s students have the skills they need to take advantage of the region’s opportunities is to recognize that increasing education budgets and keeping students in class longer, though important, are not enough. Some Latin American countries have raised education spending. Mexico and Brazil spend 5-6% of GDP on education, more than many developed countries, and roughly three times more than China. But the quality of their programs does not reflect this spending, and a stronger focus on tertiary education is needed.