Skills have the potential to transform lives and drive economies. Having a skilled workforce can contribute to better outcomes at the individual level as well as for firms and the country as a whole. Higher-skilled individuals are more likely to be employed and earn higher wages. Firms need high-level skills to innovate, grow and move up value chain. Countries benefit from a more skilled workforce through higher productivity and GDP growth.

However, having a pool of highly proficient workers does not guarantee these desirable outcomes. How employers use skills in the workplace is just as important as developing skills in the first place. In addition, when skills supply is not in line with skills demand, skill mismatch and skill shortages are likely to arise reducing the benefits that individuals, firms and countries can draw from skills acquisition.

In light of this challenge, the OECD has undertaken an ambitious programme of work to assess the degree of alignment between skill supply and skill demand and identify policies that can bring the two closer. This work builds on the extensive experience of the OECD in the area of skills, including the OECD Skill Strategy and its follow up national implementation strategies, the Survey of Adult Skills (PIAAC) and its rich analyses in the areas of skills mismatch, vocational education and training and work-based learning.

This study analyses the relationship between skills and labour market outcomes in Chile with a specific focus on disadvantaged groups: youth, women and the low-skilled. It examines the proficiency of the Chilean population in literacy, numeracy and problem-solving in a technological-rich environment and disentangles the relationship between proficiency and labour market outcomes in Chile. The study also devotes significant attention to the demand for skills, by describing the use of skills at work in Chile and identifying its key determinants, as well as assessing the extent of skills mismatch and its implications for individuals. Throughout the study, differences between sociodemographic groups are highlighted to investigate the roots of labour market disadvantage.

The work on this study was carried out by Glenda Quintini (Skills and Employability Division of the Directorate for Employment, Labour and Social Affairs), Paulina Granados and Javiera Ibacache (both working in the Skills and Employability Division at the time of drafting), under the leadership of Mark Keese (Head of the Skills and Employability Division).

This study was financed through a grant by the Chilean National Productivity Commission. However, the views expressed in this study should not be taken to reflect the official position of the Chilean National Productivity Commission.