Skills in Latin America
Insights from the Survey of Adult Skills (PIAAC)
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 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. This report explores the situation of youth and adults in Latin America by using data from the Survey of Adult Skills (PIAAC) from Chile, Ecuador, Mexico and Peru and the Programme for International Student Assessment (PISA) from Argentina, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Mexico, Panama, Peru and Uruguay. These data have been supplemented by results from the World Bank STEP survey of adults living in urban areas of Bolivia and Colombia.
Skills and economic outcomes in Latin America
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.