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Staying competitive with ongoing education

Education is one of the keys to strengthening Latin America's underperforming labor markets, which for over a decade have been characterized by high unemployment and low wages, according to a new IDB report titled Good Jobs Wanted: Labor Markets in Latin America. 

The level of education needed to remain competitive in the labor market goes beyond the formal education received before starting to work. "It is difficult to think that the model in which people study first and then start work without receiving any other training or education is sustainable in a society with a fast and intense rate of technological change," states Juan Carlos Navarro, chief of the education unit at the IDB.

For instance, it has been calculated that in 10 years, 90% of the people currently working in Europe will still be in the labor market, but 80% of the technology they will be using will be new. "One of the best defenses against workers’ fears of economic and technological change is continued education," says Navarro.

A new conceptual model

Traditionally, our idea of an ideal life is studying when you are young, working in adulthood and enjoying life in the senior years. Technological and demographic changes (with a population that lives longer) suggest that this model could be displaced by one that integrates education, work and leisure in all phases of life.

In such a model, lifelong learning would become a necessary component. However, there are still many questions to be answered before continued education becomes a reality. One of them is financing. Who will pay for this education? Governments,  companies, or maybe workers? The answer is not simple. "People who seek further education are those who are already well educated, while less qualified workers have fewer opportunities, less resources to invest and also lower incentives," explains Navarro.

The explanation for this apparent paradox is simple. For a worker who has not completed primary education, to do so would not produce great benefits, since this person would have to compete with many other workers who already have that level of education. However, for a university educated professional who takes a specialized course, the investment in time and money could be lucrative.

Some suggestions for confronting the challenge of ongoing education include: creating support centers for young adults who have not finished compulsory education; transfering resources from the government to companies so that they can provide advanced training courses; certifying skills in some sectors; and increasing the flexibility of formal institutions so that more students with diverse education and social backgrounds can benefit from them.

The IDB is currently studying the best options for introducing a lifelong learning component in its education strategy. The Multilateral Investment Fund (MIF), an independent fund administered by the IDB that promotes private sector development in Latin America and the Caribbean, is investing in several projects on labor certifications.

The report Good Jobs Wanted: Labor Markets in Latin America, the latest issue of the IDB’s annual Report on Economic and Social Progress, was written and produced by a team of 55 economists, researchers, academics and other experts under the overall direction of Guillermo Calvo, IDB chief economist and head of the Research Department.


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