Latin American Economic Outlook

OECD Development Centre

English
Frequency
Annual
ISSN: 
2072-5140 (online)
ISSN: 
2072-5159 (print)
DOI: 
10.1787/20725140
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The Latin American Economic Outlook is the OECD Development Centre’s annual analysis of economic developments in Latin America in partnership with UN ECLAC and CAF. Each edition includes a detailed macroeconomic overview as well as analysis on the dynamics shaping the region in the context of shifting wealth, particularly towards emerging economies. Each issue also includes an in-depth look at a special theme related to development in Latin America, taking into account the strategic challenges and opportunities the region will have in the future. Further information can be found on the website.

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Latin American Economic Outlook 2017

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Latin American Economic Outlook 2017

Youth, Skills and Entrepreneurship You do not have access to this content

OECD Development Centre

English
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    http://oecd.metastore.ingenta.com/content/4116141e.pdf
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Author(s):
OECD, CAF, ECLAC
29 Oct 2016
Pages:
312
ISBN:
9789264265004 (PDF) ;9789264262546(print)
DOI: 
10.1787/leo-2017-en

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The 2017 edition of the Latin American Economic Outlook explores youth, skills and entrepreneurship. Young Latin Americans embody the region’s promise and perils. They stand at the crossroads of a region whose once promising economy and social progress are now undergoing a slowdown. The Outlook identifies potential strategies and policy responses to help Latin America and the Caribbean revive economic growth. While development can stem from different sources, skills and entrepreneurship can empower youth to develop knowledge-intensive economic activities, boost productivity and transform the region’s politics as they transition successfully from the world of school to the world of productive work and create that future they seek. The report highlights valuable experiences and best practices in these fields and proposes strategies to allow Latin America to consolidate long-term growth while assuring continuity in the social agenda.

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  • Foreword

    The Latin American Economic Outlook analyses issues related to Latin America’s economic and social development. Ever since the launch of the first edition in November 2007, the report has offered a comparison of Latin American performance with that of other countries and regions around the world sharing experiences and good practices.

  • Acronyms and abbreviations
  • Editorial

    GDP growth in Latin America will be negative for the second consecutive year in 2016 (between -0.5% and -1.0%), a contraction the region has not seen since the early 1980s. This evolution is testing Latin America’s socio-economic progress – notably the reduction of poverty and inequality and the expansion of the middle class. Around 7 million Latin Americans became poor in 2015, increasing the region’s total poverty rate to 29.2% or 175 million people. Moreover, between 25 and 30 million vulnerable middleclass Latin Americans, one of out of three whom exited poverty during the recent period of economic growth, face the risk of falling back into poverty in the near future.

  • Executive Summary

    The Latin American Economic Outlook 2017 analyses the attitudes, challenges and opportunities of Latin America’s youth. Youth in Latin America and the Caribbean (LAC) aged 15 to 29 number more than 163 million – around a quarter of the region’s total population. The region’s once promising economy is now slowing down, challenging the social, political and economic progress of the last decade. As such, young people stand at a crossroads, embodying the region’s promise and perils.

  • Overview: Improving youth inclusion through better skills and entrepreneurship opportunities

    This chapter sets the scene for the entire publication by offering an overview of the recent economic trends as well as of the main opportunities and challenges faced by youth in Latin America. It also explores how better skills and entrepreneurship opportunities can provide better prospects for youth inclusion today and for the future. Finally, the chapter summarises a set of policy goals and recommendations emerging from the analysis conducted in the following chapters.

  • Macroeconomic prospects for Latin America and the Caribbean

    Latin America must return to the path of strong economic inclusive growth. The prolonged economic slowdown in the region confirms that potential growth is weaker than previously expected. This evolution will test the robustness of the socio-economic progress achieved in the previous decade, especially the strong reduction in poverty levels and the emergence of a middle class. This chapter assesses Latin America’s growth prospects in a more challenging international environment and explores its consequences on the region’s labour markets and key socio-economic indicators such as poverty and inequality. In addition, it analyses economic policy options with an emphasis on investment in infrastructure and skills to boost inclusive growth under a sustainable and credible fiscal framework.

  • Youth inclusion in Latin America and their main challenges

    Most countries in Latin America still stand to reap the benefits of the youth dividend because of their demographics. However, for this to happen the Latin America and Caribbean (LAC) region needs greater investments in young people, including their inclusion into economic, political and social processes. This chapter analyses the gaps of youth inclusion in the LAC region. It provides a rich statistical portrait of how the labour market position and social inclusion of youth have evolved along a number of key dimensions, and identifies a comprehensive set of policy levers to tackle these gaps. The chapter is composed of two parts. First, it provides an overview of the labour market performance of youth in the past decade, focusing on both measures of the labour market situation and job quality. Second, it analyses other indicators of inclusion such as health, satisfaction with life and future outlooks, civic and social engagement, and crime and perceived security to give a more complete picture of youth inclusion in the region. Finally, the chapter sketches a set of policy goals and recommendations to foster youth inclusion in Latin American countries.

  • Education, skills and youth in Latin America and the Caribbean

    Skills are essential for youth to make the transition into adult life, to contribute to knowledge-based and skills-based economies, and to participate in society. As such, they allow individuals to become engaged in a country’s growth and development. Education serves as one of the main sources of acquiring skills. This chapter analyses the educational attainment and skills endowment of youth in the Latin America and Caribbean (LAC) region by providing a rich statistical portrait of youth education participation and performance. The chapter provides an overview of education attainment, as well as an analysis of the reading, mathematics, science and technology aptitudes of youth in the past decade. It also describes the main results of youth training programmes, one of the region’s main policy responses to endow early education leavers with skills to participate in labour markets. Finally, the chapter sketches a set of policy goals and recommendations to improve education and provide better skills to youth in LAC countries.

  • Youth entrepreneurship in Latin America and the Caribbean

    Youth entrepreneurship can be a vehicle for enhancing individuals’ employability and social mobility, while also inducing productive transformation. Whereas attitudes towards entrepreneurship are similar, Latin American young entrepreneurs tend to be less educated and come from more disadvantaged socio-economic backgrounds than in OECD economies. With fewer resources, skills and experience, they face higher barriers for business creation in accessing finance, acquiring entrepreneurial skills, integrating business networks, creating new markets and overcoming regulatory barriers. Public policy in these areas has improved entrepreneurship prospects to some extent. Programme evaluations suggest that youth entrepreneurship programmes have been effective for improving labour market outcomes. Strengthening those programme components which are most effective, such as business training, counselling and mentoring, can substantially improve the effectiveness of future programmes.

  • The future of work, politics and cities

    Strong transformations – mainly driven by technological change – are taking place in the world of work, politics and cities. Technologies applied to jobs are replacing some tasks as well as creating new ones, thus shifting demand for skills. New ways of voicing social demands are emerging, playing a catalyst role to current discontent and detachment from the political system mainly shown by youth in LAC. The process of urbanisation continues in the region, and cities in the near future will be more densely populated, diverse, interconnected, economically vibrant and complex than the ones today. All these transformations are bringing about challenges and opportunities, picturing a future that will be very different in nature to the world we know today. Policies should prepare youth to embrace change, face new challenges and make the most of emerging opportunities.

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    • Argentina

      Labour market conditions in Argentina continue to improve, but are still below the Latin America and Caribbean (LAC) average. The recovery from the 2001 crisis remains uneven across different groups within the workforce. Unemployment rates for adults (aged 30-64), which have been declining since 2004, fell to 4.5% in 2014; this is still above the LAC average (3.3%), but below the OECD average (5.8%). Between 2004 and 2014, informality rates for adults decreased by almost 15 percentage points – from almost 42% to around 27%. These figures are from the Socio-Economic Database for Latin America and the Caribbean (SEDLAC) data based on Argentina’s National Household Survey (EPH).

    • Brazil

      In 2014, unemployment rates in Brazil (4%) were lower than the OECD average, but still slightly above the Latin America and Caribbean (LAC) average (3%), according to Socio-Economic Database for Latin America and the Caribbean (SEDLAC) data based on the Pesquisa Nacional por Amostra de Domicílio [National Household Survey] (PNAD). Informality rates for adults decreased by almost 10 percentage points between 2004 and 2014, dropping from 28% to around 19%; this is much lower than the LAC average.

    • Chile

      Following the recent economic slowdown, Chile’s unemployment rate has been increasing since 2014 and is expected to surpass the OECD average, peaking at 7.1% in 2016 Q4 (OECD, 2016). Informality – defined as all employed persons not paying social contributions – for adults has decreased in the last decade, reaching 13% in 2014 which is much lower than the Latin America and Caribbean (LAC) average.

    • Colombia

      Colombia has experienced strong and sustained economic growth over the past 15 years, apart from a short slowdown in 2008 and 2009; labour market outcomes have improved significantly. Unemployment has also dropped considerably in recent years. However, based on Colombia’s official household survey (ECH), data from the Socio-Economic Database for Latin America and the Caribbean (SEDLAC) report unemployment at 6% in 2014 for adults. This was above the Latin America and Caribbean (LAC) average (3%), but in line with the OECD average.

    • Costa Rica

      Labour market conditions have been worsening in Costa Rica in recent times. Even though Costa Rica’s labour market performance has been better in comparison with other countries in the region, the informality trend has been increasing. Unemployment rates remained in line with OECD average in 2014, still slightly above the Latin America and Caribbean (LAC) average (5% in Costa Rica vs. 3% in LAC). Despite having increased over the last decade informality rates for adults, defined as all employed persons not paying social contributions, have remained much lower than the LAC average (26% in Costa Rica vs. 38% in the LAC region).

    • Dominican Republic

      Dominican Republic has experienced strong and sustained economic growth over the past two decades, and labour market outcomes improved. Unemployment is low, at 2.7% in 2014 according to Socio-Economic Database for Latin America and the Caribbean (SEDLAC) data (this goes to 4.4% if calculated using data from the National Labour Force Survey [ENFT]). The unemployment rate for adults is in line with the Latin America and Caribbean (LAC) average (3.3%), and below the OECD average. Dominican Republic is among LAC countries with the lowest rates of informality, defined as all employed persons not paying social contributions. This group represents 22.5% of the 30-64 year-old workers’ population, well below the 38% LAC average.

    • Mexico

      Unemployment for adults in Mexico has been declining since the end of 2009. Although lower than the OECD average, unemployment rates remain in line with the Latin America and Caribbean (LAC) average (at 3% in 2014) according to the Socio-Economic Database for Latin America and the Caribbean (SEDLAC). At the same time, informality – defined as all employed persons not paying social contributions – remains high for adults over the last decade (57%), which is still higher than the LAC average (38%). However, informality rates have been decreasing since 2013 owing to labour market reforms introduced in 2012. These reforms aim to stimulate formal employment by adding new types of contracts that give access to social benefits.

    • Panama

      Panama’s economic growth over the past decade was inclusive and led to a significant reduction in poverty and the expansion of shared prosperity. Panama has made significant progress in reducing poverty in recent years (poverty and extreme poverty decreased by more than 10 percentage points over the decade 2004-14) and as a percentage of the total population (29% in 2014). Panama has now one of the largest middle-class populations in the region. This positive period of strong growth also was reflected in the labour market.

    • Paraguay

      Paraguay labour market outcomes have improved significantly in the last decade. According to the Socio-Economic Database for Latin America and the Caribbean (SEDLAC), unemployment has also dropped considerably in recent years, and, at slightly more than 3% in 2014, the unemployment rate for adults is in line with the Latin American and Caribbean (LAC) average and well below the OECD average. Informality – defined as all employed persons not paying social contributions – among adults has been declining since 2004, although it remains much higher (at 53% in 2014) than the LAC average (38%).

    • Peru

      Apart from a short slowdown in 2014, Peru has experienced strong and sustained economic growth over the past 15 years, and labour market outcomes improved significantly. Unemployment has also dropped considerably in recent years, reaching 1.5% in 2014 according to Socio-Economic Database for Latin America and the Caribbean (SEDLAC) data; the unemployment rate for adults is among the lowest among the Latin American and Caribbean (LAC) countries (LAC average 3.3%) and keeps well below the OECD average. Informality, defined as all employed persons not paying social contributions, has also been declining since 2004. Despite these favourable developments, the incidence of informal work remains high in Peru at 43% in 2014, still slightly above the LAC average (38%).

    • Uruguay

      Uruguay’s economic growth over the past decade was inclusive and led to a significant reduction in poverty and the expansion of shared prosperity. As a percentage of the total population (68% in 2014), Uruguay has now the largest middle class in the region. This positive period of strong growth was also reflected in the labour market. Unemployment almost halved since 2004, according to Socio-Economic Database for Latin America and the Caribbean (SEDLAC) data, reaching 3.7% in 2014, in line with the Latin America and Caribbean (LAC) average and well below the OECD average. The already low level of informality – defined as all employed persons not paying social contributions – dropped to 9% among adults in 2014, the lowest level in the region and far away from the LAC average (38%).

    • Methodological note
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