Latin America and the Caribbean (LAC) is a land of untapped potential. The region is young, offering a unique demographic window of opportunity for inclusive growth in the region, with education being a key driver of growth to support future progress. The social and economic progress of the last decades led to increased access to education, but much remains to be done to improve the equity and quality of that education.

By Andreas Schleicher, Director for Education and Skills, OECD

Human capital is a key determinant of success for individuals and economies alike. Literacy and numeracy are key foundations for higher-order cognitive skills, while solving problems in technology-rich environments is increasingly important, as information and communications technology (ICT) spreads into all aspects of life. Despite remarkable recent increases in enrolment and educational attainment, the countries of Latin America and the Caribbean (LAC) lag behind in skills development among both secondary school students and the wider adult population. Young adults are still struggling in the labour market, while employers report skill shortages are a barrier to business. As countries in the region seek to shift their economies into higher value-added activities to escape the “middle-income trap”, they will need to improve the skills of their working-age population across the board.

Four Latin American countries took part in the first cycle of PIAAC: Chile, Ecuador, Mexico and Peru. As middle-income countries which are only just beginning to experience the expansion in education that OECD countries enjoyed many decades ago, their results are lower than most other countries and economies taking part. In literacy, numeracy and problem solving they lie at or near the bottom of the rankings, and some do not have the basic skills necessary to take the assessment at all, unsurprising in a region with low information and communications technology (ICT) penetration. More highly educated adults do better, although even tertiary-educated adults in Latin America demonstrate lower proficiency than their OECD counterparts. Skills in these countries tend to change linearly with age, reflecting the very recent increases in upper secondary attainment. Gender gaps in skills are also wider among older age groups, but closing among the under-25s.

Despite a remarkable recent increase in attainment levels by young people in Latin America, they are still struggling in the labour market and young adults are much more likely to be unemployed than those aged 25. PISA data from 10 LAC countries show that teenagers in secondary education are struggling to form clear expectations about their future careers. Their expectations about occupations are highly concentrated in a small number of largely professional jobs and are poorly aligned with actual patterns of labour-market demand. Teenagers in LAC countries are less likely than OECD’s to be offered the chance to explore potential options through important activities that allow students to engage directly with the world of work, such as job fairs, workplace visits or internships. Looking across the data, it is girls and students from the most disadvantaged backgrounds who typically have most to gain from more effective career guidance.

School enrolment and educational attainment have increased substantially across the Latin America region, closing earlier gaps between boys and girls. Results from PISA find girls outperform boys in reading skills across all socio-economic groups. However, their better performance does not translate into better labour-market outcomes than their male peers. Latin American women have, on average, substantially less favourable labour-market outcomes and earnings than OECD women. Parental expectations and occupational choices condition women’s labour-market choices, earnings and opportunities for increasing skills in the workplace in Latin America. Early cohabitation (whether in marriage or not) and adolescent parenting are more prevalent among young women than young men in the region, placing them on a lower earnings trajectory that can lead to a lifetime disadvantage that cascades down to the next generation of girls.

Education and skills are key factors in the effort to create skill-intensive and higher value-added economies, which could help Latin American countries escape the "middle-income trap". Economies in the region have fewer workers employed in high value-added sectors or occupations requiring high levels of skills than in OECD countries. In the long term, investment in improving the quality of the education system will be key to improved growth, but investment in adult training is also needed to help those already in the labour market. Despite reported levels of on-the-job training among Latin American workers, the region lags behind in organised adult training and learning activities. This is largely because of much lower participation rates among self-employed and informally employed workers, and among those working in industries with low levels of research and development (R&D) intensity, both of which form a much larger share of the workforce than the OECD average.