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Youth, Skills and Entrepreneurship in
Latin America and the Caribbean
Angel Melguizo and Paula Cerutti
OECD Development Centre
OAS Towards Concrete Solutions for Addressing
Youth Employment in the Caribbean
December 6 2017, Barbados
Overview
1 Youth inclusion in Latin America and the Caribbean
2 Skills and entrepreneurship for inclusive growth
• The Latin American and Caribbean demographic window
of opportunity is still open but not much is left
• Youth are more educated than adults and an increasing
share belongs to the middle class…
… however, they are offered limited opportunities
• The inclusion of young people in the social, economic and
political processes can spur inclusive growth
Why focus on youth?
Large share of young population opens a
window of opportunity
One-quarter of the Caribbean population is aged between 15-29
Young population in the Caribbean (in millions)
Source: OECD/ECLAC/CAF, based on United Nations, Population Division, (2015), World Population Prospects, The 2015 Revision
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
0
2
4
6
8
10
12
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
Thousands
Young population (15-29) Young over pop. aged (30-100+)
However, many of them lack of good employment
prospects today
Activity status of youth by gender in Latin America and the Caribbean, 2014
(% of youth aged 15-29)
Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship. OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank).
Gender gaps have decreased, but still persist
Labour force participation by sex, 2017
(% of youth aged 15-24)
Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship. OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank).
Population without own income by sex, 2014
(% of youth aged 15-24)
15
20
25
30
35
40
45
50
55
60
65
LAC
Bahamas
Barbados
Cuba
DR
Haiti
Jamaica
SaintLucia
SaintVincent…
Suriname
Trinidadand…
Male Female
15
20
25
30
35
40
45
50
55
60
65
70
Brazil
Colombia
CostaRica
Ecuador
ElSalvador
Guatemala
Mexico
Panama
DR
LAC
Men Women
0%
20%
40%
60%
80%
100%
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
Middle class
0%
20%
40%
60%
80%
100%
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
Moderate poor
0%
20%
40%
60%
80%
100%
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
Vulnerable
0%
20%
40%
60%
80%
100%
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
Disconnected youth need to be re-engaged…
Activity status of youth by single year of age and socio-economic status, 2014
Note: Socio-economic classes are defined using the World Bank classification: “Extreme poor” = youth belonging to households with a daily per capita income lower than USD 2.50. “Moderate
poor” = USD 2.50-4.00. “Vulnerable” = USD 4.00-10.00 “Middle class” = higher than USD 10.00. Poverty lines and incomes are expressed in 2005 USD PPP per day (PPP = purchasing power
parity). LAC weighted average of 17 countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua,
Panama, Paraguay, Peru, Uruguay Source: OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank).
Extreme poor
NEET StudentWorker Working student
Age Age
Age Age
… particularly the ones with lower socio-economic
background (i.e. poor and vulnerable)
Activity status of youth by single year of age and socio-economic status, 2014
Note: Socio-economic classes are defined using the World Bank classification: “Extreme poor” = youth belonging to households with a daily per capita income lower than USD 2.50. “Moderate
poor” = youth belonging to households with a daily per capita income of USD 2.50-4.00. “Vulnerable” = individuals with a daily per capita ncome of USD 4.00-10.00 “Middle class” = youth from
households with a daily per capita income higher than USD 10.00. Poverty lines and incomes are expressed in 2005 USD PPP per day (PPP = purchasing power parity). OECD is the unweighted
average of countries shown. LAC weighted average of 17 countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras,
Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay Source: OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank).
0
10
20
30
40
50
60
70
80
90
100
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
%
Age
Vulnerable
0
10
20
30
40
50
60
70
80
90
100
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
%
Age
Middle class
NEET
Student
Informal Worker
Working student
Formal Worker
NEET
Student
Informal Worker
Working student
Formal Worker
Vulnerable Middle Class
Informality: stepping stone or trap?
Flows into and out of informality of youth in Latin America
(male workers, % annual flows, 2005-15)
Note:This analysis covers urban populations in four countries (Argentina, Brazil, Mexico, Peru) due to data limitations
Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship. OECD and World Bank tabulations of LABLAC (CEDLAS and the World Bank).
Plenty of (own-account) entrepreneurs mostly
from disadvantaged backgrounds
0
10
20
30
40
50
60
70
80
90
100
DominicanR.
Haiti
Colombia
Bolivia
Honduras
Nicaragua
Peru
Panama
Ecuador
Paraguay
ElSalvador
Uruguay
Argentina
Guatemala
Brazil
Chile
CostaRica
Mexico
LACaverage
OECDaverage
%
Unpaid family worker Employee Employer Own-account
Distribution of employed population by occupational category in LAC and the OECD
(aged 15-29 years, 2014)
Source: OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank).
Few high-growth and many subsistence
young entrepreneurs in LAC
Entrepreneurial motivation in LAC and OECD, Necessity or opportunity (2015, %)
Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship , based on Global Entrepreneurship Monitor individual data,
2015 and Herrington, Kelley and Singer (2016).
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
Young - necessity Adult - necessity Young - opportunity Adult - opportunity
Young entrepreneurs’ integration into global
value chains is still limited
Entrepreneurs with at least ¼ of revenues from international customers (2014, %)
Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship , based on Global Entrepreneurship Monitor individual data, 2015.
0
5
10
15
20
25
30
35
40
45
50
Panama
Colombia
OECDaverage
Uruguay
Chile
Ecuador
PuertoRico
LACaverage
Barbados
Peru
Mexico
Guatemala
Argentina
Brazil
%
Adult Young
There is a wide gap between skills demand
and supply…
Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship , based on Manpower Group databases
Firms reporting difficulties to hire qualified staff
(average 2006-2016, %)
0
10
20
30
40
50
60
70
80
… and many workers perform jobs that are
mismatched with the skills they have
Note: Caluclations based on School-to-Work Transition Surveys 2012-2015, ILO. The normative mismatch measure is based on a mapping of ISCO-08 major groups to ISCED skills levels as follows. An
individual working in a high-skilled occupation (ISCO 1-3) should have completed at least some tertiary education, an individual working in a medium-skilled occupation (ISCO 4-8) should have completed
(general or vocational) secondary education and an individual working in a low-skilled occupation (ISCO 9) should have completed at least primary education. These individuals are considered as
adequately qualified and, if this is not the case, they enter into the over- or underqualified category.
Data for Colombia and El Salvador refer to the urban population only.
Source: OECD, 2017: Youth Aspirations and the Reality of Jobs in Developing Countries: Mind the gap.
Qualification of workers according to a normative measure of mismatch based on years of education
required by the type of job they perform (2014, %)
0 20 40 60 80 100
Jamaica
Colombia*
Peru
Dominican Republic
El Salvador*
LatinAmericaandCaribbean
%
Underqualified Qualified Overqualified
Overview
1 Youth inclusion in Latin America and the Caribbean
2 Skills and entrepreneurship for inclusive growth
Secondary education coverage has increased
especially for vulnerable, but quality remains low
Youth by highest level of education achieved in LAC
(% of youth aged 25-29)
Average increase in years of education by
socio-economic group and age group,
2004-14
Source: OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank). Source: OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank).
Tertiary education enrolment has increased, but
graduation rates remain low…
Gross enrolment ratio, tertiary education, LAC-16
(%)
Note: Gross enrolment ratio refers to the number of students enrolled in a given level of education, regardless of age, expressed as a percentage of the official school-age population corresponding to the same
level of education. Year is 2014 except forArgentina, Chile, El Salvador, Ecuador, Jamaica, Guatemala, Mexico, OECD and Panama (2013), and Paraguay, Peru and Uruguay (2010).
Source: UNESCO Institute for Statistics. Gross enrolment ratio, tertiary, both sexes (percentage).
0
10
20
30
40
50
60
70
80
90
100
Haiti
Aruba
SaintLucia
Belize
AntiguaandBarbuda
Bermuda
Jamaica
Cuba
LAC
DominicanRepublic
OECD
SaintKittsandNevis
Grenada
…and few students focus in Science, Engineering &
Mathematics, despite their higher economic returns
Tertiary students enrolled in STEM programmes in Latin America, circa 2013 (share)
0
0.1
0.2
0.3
0.4
0.5
0.6
Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship
Technical and vocational edu. has not developed
to its full potential due (in part) to limited budgets
Public expenditure in training programmes in Latin America (circa 2014; % GDP)
Note:2014 for Argentina, Brazil, OECD and Panama; 2013 for Costa Rica, Guatemala and Peru; 2012 for México; 2011 for Chile and Ecuador; and 2010 for Colombia
Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship
Programs for disadvantage youth work when
combining class-work, intermediation and demand
Components and outcomes in youth training programmes in Latin America
Barriers to entrepreneurship in LAC are higher
than in emerging economies and the OECD
Barriers to entrepreneurship index
(Scale 0 to 6 from least to most restrictive, 2013)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
OECDaverage
Panama
Colombia
Chile
Peru
Paraguay
Mexico
Uruguay
DominicanRepublic
Guatemala
ElSalvador
CostaRica
LACaverage
Brazil
Nicaragua
Argentina
Jamaica
Ecuador
Honduras
Bolivia
Venezuela
Complexity of regulatory procedures Administrative burdens on start-ups
Regulatory protection of incumbents
Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship , based on PMR databases (OECD and WB)
Entrepreneurship programmes offering business
training, mentoring and counselling work
Components and final outcomes in youth entrepreneurship programmes in LAC
Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship , based on programnmes evaluations
Latin America Economic Outlook 2017
• Beyond the short-term, Latin America and the Caribbean
face a triple challenge: economic (productivity), social
(poverty and vulnerability) and political (governance)
• Structural policies should be accompanied by investment in
human and physical capital
• Empowering the youth based on skills and
entrepreneurship policies should be in the agenda
The way forward – skills and educational policies
• Strengthen the education system and promote lifelong
skills-enhancing programmes
• Combine classroom teaching with practical on-the-job
training
• Collect information on the skills of the population and
those demanded by businesses to build better national
skills-enhancing strategies
• Develop skills programmes that are more responsive to
the needs of the marketplace
• Reduce regulatory barriers for young entrepreneurs
• Introduce tailored financing instruments adapted to the
needs of young entrepreneurs,
• Strengthen the link of young entrepreneurs with business
networks
• Support business training and mentoring programmes
• Apply systematic evaluations of youth training and
entrepreneurship programmes to identify what works and
what needs to be redesigned.
The way forward – entrepreneurship policies
Some promising programmes in the region and
the Caribbean
• Dual Training: Juventud y Empleo (DR), ENTRA 21 (LAC), NEO-
Jamaica (Jamaica), ProJoven (Peru)
• Training Institutes/Programs: SENA (Colombia), PRONATEC (Brasil),
Caribbean Association of National Training Agencies (CANTA)
• Business registration: Ley de Emprendedores (Argentina)
• Flexible financing instruments: Startup Jamaica, México Emprende,
Start-up Peru, Start-up Chile.
• Mentoring and training: Entrepreneurship Program for Innovation in
the Caribbean, Entrepreneurship parks (Colombia), Foro
Emprezando (Mexico)
• Internationalization: Pacific Alliance Start-up association
• Future of jobs: job creation or destruction? A shifting
demand for skills
• Future of politics: new ways of connecting societies and
governments.
• The future of cities: living in a highly urbanized region.
Scale up social entrepreneurship
Policies should look into the future, both in
design and financing
Much to gain from empowering the youth
Source: OECD Development Centre, based on OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship.
0
1
2
3
4
5
6
7
8
9
10 Opportunity cost of NEETs Opportunity cost of informal youth
Economic impact of skills and entrepreneurship policies (2014; % GDP)
• How do countries National Qualifications Strategies
coordinate with each other?
• Do countries work/collaborate in skills demand
forecasting?
• What are countries doing to endow with more prestige to
TVET education?
• Data and Statistics?
Policies should look into the future, both in
design and financing
Latin American Outlook 2017
Youth, Skills and Entrepreneurship
Visit www.latameconomy.org
Gracias!

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Leo2017_CRB

  • 1. Youth, Skills and Entrepreneurship in Latin America and the Caribbean Angel Melguizo and Paula Cerutti OECD Development Centre OAS Towards Concrete Solutions for Addressing Youth Employment in the Caribbean December 6 2017, Barbados
  • 2.
  • 3. Overview 1 Youth inclusion in Latin America and the Caribbean 2 Skills and entrepreneurship for inclusive growth
  • 4. • The Latin American and Caribbean demographic window of opportunity is still open but not much is left • Youth are more educated than adults and an increasing share belongs to the middle class… … however, they are offered limited opportunities • The inclusion of young people in the social, economic and political processes can spur inclusive growth Why focus on youth?
  • 5. Large share of young population opens a window of opportunity One-quarter of the Caribbean population is aged between 15-29 Young population in the Caribbean (in millions) Source: OECD/ECLAC/CAF, based on United Nations, Population Division, (2015), World Population Prospects, The 2015 Revision 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 0 2 4 6 8 10 12 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2100 Thousands Young population (15-29) Young over pop. aged (30-100+)
  • 6. However, many of them lack of good employment prospects today Activity status of youth by gender in Latin America and the Caribbean, 2014 (% of youth aged 15-29) Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship. OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank).
  • 7. Gender gaps have decreased, but still persist Labour force participation by sex, 2017 (% of youth aged 15-24) Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship. OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank). Population without own income by sex, 2014 (% of youth aged 15-24) 15 20 25 30 35 40 45 50 55 60 65 LAC Bahamas Barbados Cuba DR Haiti Jamaica SaintLucia SaintVincent… Suriname Trinidadand… Male Female 15 20 25 30 35 40 45 50 55 60 65 70 Brazil Colombia CostaRica Ecuador ElSalvador Guatemala Mexico Panama DR LAC Men Women
  • 8. 0% 20% 40% 60% 80% 100% 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Middle class 0% 20% 40% 60% 80% 100% 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Moderate poor 0% 20% 40% 60% 80% 100% 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Vulnerable 0% 20% 40% 60% 80% 100% 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Disconnected youth need to be re-engaged… Activity status of youth by single year of age and socio-economic status, 2014 Note: Socio-economic classes are defined using the World Bank classification: “Extreme poor” = youth belonging to households with a daily per capita income lower than USD 2.50. “Moderate poor” = USD 2.50-4.00. “Vulnerable” = USD 4.00-10.00 “Middle class” = higher than USD 10.00. Poverty lines and incomes are expressed in 2005 USD PPP per day (PPP = purchasing power parity). LAC weighted average of 17 countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay Source: OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank). Extreme poor NEET StudentWorker Working student Age Age Age Age
  • 9. … particularly the ones with lower socio-economic background (i.e. poor and vulnerable) Activity status of youth by single year of age and socio-economic status, 2014 Note: Socio-economic classes are defined using the World Bank classification: “Extreme poor” = youth belonging to households with a daily per capita income lower than USD 2.50. “Moderate poor” = youth belonging to households with a daily per capita income of USD 2.50-4.00. “Vulnerable” = individuals with a daily per capita ncome of USD 4.00-10.00 “Middle class” = youth from households with a daily per capita income higher than USD 10.00. Poverty lines and incomes are expressed in 2005 USD PPP per day (PPP = purchasing power parity). OECD is the unweighted average of countries shown. LAC weighted average of 17 countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay Source: OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank). 0 10 20 30 40 50 60 70 80 90 100 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 % Age Vulnerable 0 10 20 30 40 50 60 70 80 90 100 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 % Age Middle class NEET Student Informal Worker Working student Formal Worker NEET Student Informal Worker Working student Formal Worker Vulnerable Middle Class
  • 10. Informality: stepping stone or trap? Flows into and out of informality of youth in Latin America (male workers, % annual flows, 2005-15) Note:This analysis covers urban populations in four countries (Argentina, Brazil, Mexico, Peru) due to data limitations Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship. OECD and World Bank tabulations of LABLAC (CEDLAS and the World Bank).
  • 11. Plenty of (own-account) entrepreneurs mostly from disadvantaged backgrounds 0 10 20 30 40 50 60 70 80 90 100 DominicanR. Haiti Colombia Bolivia Honduras Nicaragua Peru Panama Ecuador Paraguay ElSalvador Uruguay Argentina Guatemala Brazil Chile CostaRica Mexico LACaverage OECDaverage % Unpaid family worker Employee Employer Own-account Distribution of employed population by occupational category in LAC and the OECD (aged 15-29 years, 2014) Source: OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank).
  • 12. Few high-growth and many subsistence young entrepreneurs in LAC Entrepreneurial motivation in LAC and OECD, Necessity or opportunity (2015, %) Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship , based on Global Entrepreneurship Monitor individual data, 2015 and Herrington, Kelley and Singer (2016). 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 Young - necessity Adult - necessity Young - opportunity Adult - opportunity
  • 13. Young entrepreneurs’ integration into global value chains is still limited Entrepreneurs with at least ¼ of revenues from international customers (2014, %) Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship , based on Global Entrepreneurship Monitor individual data, 2015. 0 5 10 15 20 25 30 35 40 45 50 Panama Colombia OECDaverage Uruguay Chile Ecuador PuertoRico LACaverage Barbados Peru Mexico Guatemala Argentina Brazil % Adult Young
  • 14. There is a wide gap between skills demand and supply… Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship , based on Manpower Group databases Firms reporting difficulties to hire qualified staff (average 2006-2016, %) 0 10 20 30 40 50 60 70 80
  • 15. … and many workers perform jobs that are mismatched with the skills they have Note: Caluclations based on School-to-Work Transition Surveys 2012-2015, ILO. The normative mismatch measure is based on a mapping of ISCO-08 major groups to ISCED skills levels as follows. An individual working in a high-skilled occupation (ISCO 1-3) should have completed at least some tertiary education, an individual working in a medium-skilled occupation (ISCO 4-8) should have completed (general or vocational) secondary education and an individual working in a low-skilled occupation (ISCO 9) should have completed at least primary education. These individuals are considered as adequately qualified and, if this is not the case, they enter into the over- or underqualified category. Data for Colombia and El Salvador refer to the urban population only. Source: OECD, 2017: Youth Aspirations and the Reality of Jobs in Developing Countries: Mind the gap. Qualification of workers according to a normative measure of mismatch based on years of education required by the type of job they perform (2014, %) 0 20 40 60 80 100 Jamaica Colombia* Peru Dominican Republic El Salvador* LatinAmericaandCaribbean % Underqualified Qualified Overqualified
  • 16. Overview 1 Youth inclusion in Latin America and the Caribbean 2 Skills and entrepreneurship for inclusive growth
  • 17. Secondary education coverage has increased especially for vulnerable, but quality remains low Youth by highest level of education achieved in LAC (% of youth aged 25-29) Average increase in years of education by socio-economic group and age group, 2004-14 Source: OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank). Source: OECD and World Bank tabulations of SEDLAC (CEDLAS and the World Bank).
  • 18. Tertiary education enrolment has increased, but graduation rates remain low… Gross enrolment ratio, tertiary education, LAC-16 (%) Note: Gross enrolment ratio refers to the number of students enrolled in a given level of education, regardless of age, expressed as a percentage of the official school-age population corresponding to the same level of education. Year is 2014 except forArgentina, Chile, El Salvador, Ecuador, Jamaica, Guatemala, Mexico, OECD and Panama (2013), and Paraguay, Peru and Uruguay (2010). Source: UNESCO Institute for Statistics. Gross enrolment ratio, tertiary, both sexes (percentage). 0 10 20 30 40 50 60 70 80 90 100 Haiti Aruba SaintLucia Belize AntiguaandBarbuda Bermuda Jamaica Cuba LAC DominicanRepublic OECD SaintKittsandNevis Grenada
  • 19. …and few students focus in Science, Engineering & Mathematics, despite their higher economic returns Tertiary students enrolled in STEM programmes in Latin America, circa 2013 (share) 0 0.1 0.2 0.3 0.4 0.5 0.6 Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship
  • 20. Technical and vocational edu. has not developed to its full potential due (in part) to limited budgets Public expenditure in training programmes in Latin America (circa 2014; % GDP) Note:2014 for Argentina, Brazil, OECD and Panama; 2013 for Costa Rica, Guatemala and Peru; 2012 for México; 2011 for Chile and Ecuador; and 2010 for Colombia Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship
  • 21. Programs for disadvantage youth work when combining class-work, intermediation and demand Components and outcomes in youth training programmes in Latin America
  • 22. Barriers to entrepreneurship in LAC are higher than in emerging economies and the OECD Barriers to entrepreneurship index (Scale 0 to 6 from least to most restrictive, 2013) 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 OECDaverage Panama Colombia Chile Peru Paraguay Mexico Uruguay DominicanRepublic Guatemala ElSalvador CostaRica LACaverage Brazil Nicaragua Argentina Jamaica Ecuador Honduras Bolivia Venezuela Complexity of regulatory procedures Administrative burdens on start-ups Regulatory protection of incumbents Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship , based on PMR databases (OECD and WB)
  • 23. Entrepreneurship programmes offering business training, mentoring and counselling work Components and final outcomes in youth entrepreneurship programmes in LAC Source: OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship , based on programnmes evaluations
  • 24. Latin America Economic Outlook 2017 • Beyond the short-term, Latin America and the Caribbean face a triple challenge: economic (productivity), social (poverty and vulnerability) and political (governance) • Structural policies should be accompanied by investment in human and physical capital • Empowering the youth based on skills and entrepreneurship policies should be in the agenda
  • 25. The way forward – skills and educational policies • Strengthen the education system and promote lifelong skills-enhancing programmes • Combine classroom teaching with practical on-the-job training • Collect information on the skills of the population and those demanded by businesses to build better national skills-enhancing strategies • Develop skills programmes that are more responsive to the needs of the marketplace
  • 26. • Reduce regulatory barriers for young entrepreneurs • Introduce tailored financing instruments adapted to the needs of young entrepreneurs, • Strengthen the link of young entrepreneurs with business networks • Support business training and mentoring programmes • Apply systematic evaluations of youth training and entrepreneurship programmes to identify what works and what needs to be redesigned. The way forward – entrepreneurship policies
  • 27. Some promising programmes in the region and the Caribbean • Dual Training: Juventud y Empleo (DR), ENTRA 21 (LAC), NEO- Jamaica (Jamaica), ProJoven (Peru) • Training Institutes/Programs: SENA (Colombia), PRONATEC (Brasil), Caribbean Association of National Training Agencies (CANTA) • Business registration: Ley de Emprendedores (Argentina) • Flexible financing instruments: Startup Jamaica, México Emprende, Start-up Peru, Start-up Chile. • Mentoring and training: Entrepreneurship Program for Innovation in the Caribbean, Entrepreneurship parks (Colombia), Foro Emprezando (Mexico) • Internationalization: Pacific Alliance Start-up association
  • 28. • Future of jobs: job creation or destruction? A shifting demand for skills • Future of politics: new ways of connecting societies and governments. • The future of cities: living in a highly urbanized region. Scale up social entrepreneurship Policies should look into the future, both in design and financing
  • 29. Much to gain from empowering the youth Source: OECD Development Centre, based on OECD/ECLAC/CAF, Latin American Economic Outlook 2017: Youth, Skills and Entrepreneurship. 0 1 2 3 4 5 6 7 8 9 10 Opportunity cost of NEETs Opportunity cost of informal youth Economic impact of skills and entrepreneurship policies (2014; % GDP)
  • 30. • How do countries National Qualifications Strategies coordinate with each other? • Do countries work/collaborate in skills demand forecasting? • What are countries doing to endow with more prestige to TVET education? • Data and Statistics? Policies should look into the future, both in design and financing
  • 31. Latin American Outlook 2017 Youth, Skills and Entrepreneurship Visit www.latameconomy.org Gracias!

Editor's Notes

  1. The demographic window of opportunities is still open in Latin America, with the number of people aged 15-29 reaching its peak by 2020 with around 165 million However, the absolute number of young people will start to fall after 2020, while the relative share of young people over population aged 30 and more will continue the decline started a few decades ago. Demographic conditions will shift towards a less favourable structure, and more pressure will fall on the productive share of the population, while much of the socioeconomic progress achieved in recent times will be at risk. LAC now has the best educated generation of youth that ever lived: (47% of youth with secondary or more) And increasing proportion of the belongs to middle class (36% in 2014 vs. 23% in 2004)… In the context of slowdown with favourable demographic conditions, the time is ripe to invest in the potential of the region’s youth and rely on the domestic engines of progress. This calls for strengthening the ‘middle class’. The size of the middle class has grown bigger since the last century, however, in all LAC countries, at least half of the youth population still belong to poor or vulnerable households. Investing in youth and further including them in social, political and productive activities can lead to expanding productivity and social cohesion of the region. On the other end, failing to invest in youth can trigger substantial costs resulting from poor labour market outcomes, risky behaviours, crime and violence, and poor political and civic participation Social inclusion is central to ending extreme poverty and fostering shared prosperity. Social inclusion is both an outcome and a process of improving the terms on which people take part in society. Social inclusion aims to empower poor and marginalized people to take advantage of burgeoning global opportunities. It ensures that people have a voice in decisions which affect their lives and that they enjoy equal access to markets, services and political, social and physical spaces
  2. The demographic window of opportunities is still open in Latin America, with the number of people aged 15-29 reaching its peak by 2020 with around 165 million However, the absolute number of young people will start to fall after 2020, while the relative share of young people over population aged 30 and more will continue the decline started a few decades ago. Demographic conditions will shift towards a less favourable structure, and more pressure will fall on the productive share of the population, while much of the socioeconomic progress achieved in recent times will be at risk. LAC now has the best educated generation of youth that ever lived: (47% of youth with secondary or more) And increasing proportion of the belongs to middle class (36% in 2014 vs. 23% in 2004)… In the context of slowdown with favourable demographic conditions, the time is ripe to invest in the potential of the region’s youth and rely on the domestic engines of progress. This calls for strengthening the ‘middle class’. The size of the middle class has grown bigger since the last century, however, in all LAC countries, at least half of the youth population still belong to poor or vulnerable households. Investing in youth and further including them in social, political and productive activities can lead to expanding productivity and social cohesion of the region. On the other end, failing to invest in youth can trigger substantial costs resulting from poor labour market outcomes, risky behaviours, crime and violence, and poor political and civic participation Social inclusion is central to ending extreme poverty and fostering shared prosperity. Social inclusion is both an outcome and a process of improving the terms on which people take part in society. Social inclusion aims to empower poor and marginalized people to take advantage of burgeoning global opportunities. It ensures that people have a voice in decisions which affect their lives and that they enjoy equal access to markets, services and political, social and physical spaces
  3. One-fifth of the 163 million youth living in LA work in informal jobs. An equal share is not engaged in employment, education or training (NEET). Nearly 30 million young people in LAC are neither working nor engaged in education or training (NEET). This means they are not positioned within either one of the main channels of social and economic inclusion: the education system or labour markets.
  4. Gender equality Capitalising on past advances on gender equality and women’s empowerment will be key for the region’s inclusive and sustainable growth. Female employment and participation is a long-standing weakness. The share of men without own income is less than half of the one for women (12% vs 32%). This is a consequence of the lower participation and employment rates for women, which in turn reflect higher barriers many young women face in entering the labour market and the greater proportion of them engaged in home production, which is not included in measured employment. The share of women with permanent income has decreased from 47 per cent in 1997 to 32 percent in 2015: the decline is particular stark amongst women aged 25-44 years old. This has implications for women’s financial dependence and loss of skills to re-enter the labour market, and points to the persistent perception of women as primary caregivers. Culture and norms are important drivers of gender stereotypes around the world, including in LAC. LAC has a highly unequal distribution of unpaid labour in the home: LAC women shoulder the majority of all unpaid housework and childcare (more than 70%), a higher share than women in all other OECD countries except Korea and Japan.
  5. The figure plots the activity status of youth by single year of age in 2014 for LAC-18 average, distinguishing between education; work and study; work in informal job; work in formal job; and neither in education nor employment. Given the differences in labour market outcomes between different household wealth, it is interesting to look at the detailed transition path separately by socio-economic groups. These data provide a useful descriptive portrait of what youth are doing during the transition to adult life, and after leaving school. Unsurprisingly, it emerges that youth from poor households in LAC countries leave school earlier than their peers in other better-off households, and when employed have mainly informal jobs. In addition, poor and vulnerable youth have higher shares of NEET status, which is reflected in differences in employment rates. Overall, evidence suggests that vulnerable and poor youth not only tend to leave school earlier, but also experience longer transitions from school to work.
  6. The figure plots the activity status of youth by single year of age in 2014 for LAC-18 average, distinguishing between education; work and study; work in informal job; work in formal job; and neither in education nor employment. Given the differences in labour market outcomes between different household wealth, it is interesting to look at the detailed transition path separately by socio-economic groups. These data provide a useful descriptive portrait of what youth are doing during the transition to adult life, and after leaving school. Unsurprisingly, it emerges that youth from poor households in LAC countries leave school earlier than their peers in other better-off households, and when employed have mainly informal jobs. In addition, poor and vulnerable youth have higher shares of NEET status, which is reflected in differences in employment rates. Overall, evidence suggests that vulnerable and poor youth not only tend to leave school earlier, but also experience longer transitions from school to work.
  7. Only a dynamic perspective of how workers move in and out of informal employment can reveal whether starting “informally” constitutes a real disadvantage and to understand the difficulties of escaping informality. Using a sample of four countries for which individual panel data are available (Argentina, Brazil, Mexico, Peru). Data show that, for both employed young men (and women), informal jobs may be less stable than formal jobs. The retention rate of workers employed in formal jobs is much higher than that among informal workers. But a substantial fraction of informal workers (ranging from 15% for women in Mexico to 29% of men in Brazil) move to a formal job every year, suggesting that in some cases informal jobs for youth might be a stepping stone. The instability of informal jobs can also translate into a higher risk of job loss: informal jobs appear to be associated to a higher probability of transitioning into unemployment or inactivity (particularly among young women). Therefore, informal jobs might be either a stepping stone for some, but a trap for others, particularly more vulnerable low-skilled youth. A reason behind this can be found in the higher cost of formalisation for youth, particularly at the low end of the distribution.
  8. Several forces are driving the future of work: In addition to the short-term challenges of unemployment, long-term unemployment, youth NEETs and female labour market inequalities, policymakers need to focus on medium- and long-term forces shaping the world of work. Mainly technological change (digitalisation), however also other forces need to be considered when analysing the Future of Work: Demographic change, Globalisation. They will change what work is needed, how it is carried out, where and by whom
  9. Programas de formación para jóvenes vulnerables: Argentina: Programa Jóvenes con Más y Mejor Trabajo, que promueve la formación y capacitación a lo largo de la vida y el empleo formal entre jóvenes de 18 a 25 años. No ha sido evaluado aun, pero tiene todas las características de los programas que mostraron ser mas efectivos y esta integrado al sistema de formación y capacitación continua de Argentina. Mexico: Bécate: a través de cinco modalidades capacita a personas de 16 años o más desempleadas, subempleadas o en suspensión temporal de relaciones laborales, para favorecer el empleo o el desarrollo de una actividad productiva por cuenta propia. Perú: Jóvenes Productivos (antes llamado Pro Joven) principal programa de apoyo al desarrollo de competencias laborales para jóvenes desfavorecidos. 90mil jóvenes, con 40% de tasa de inserción laboral. Servicios de formación técnica y profesional: Brasil: Pronatec (Programa Nacional de Acesso ao Ensino Tecnico e Emprego), creado en 2011, que apoya el ingreso a institutos de educación técnica a jóvenes estudiantes y trabajadores, apoya a más de un millón de jóvenes al año. Colombia: SENA (Servicio Nacional de Aprendizaje) ofrece formación gratuita en programas técnicos, tecnológicos y vocacionales relevantes para las actividades productivas de las empresas e industrias colombianas.
  10. Connecting young entrepreneurs with business networks through mentoring and supply-chain development programmes. Good examples: -The Latin American Association of Entrepreneurs (ASELA, created in 2013 in the framework of the Pacific Alliance). -Mentoring programmes at the Start-up Association of Campinas (Brazil) or the Parques de Emprendimiento (Medellin, Colombia). -Supplier development programmes: Programas de desarrollo de proveedores para “empresas tractoras” (Mexico), Vale’s Supplier development Progamme (Brazil), CODELCO (Chile). Support entrepreneurial training among youth to develop management and financial skills. Good Examples: -Programa Formación Empresarial de la Juventud (Peru) y Vamos Peru  -Programa Jóvenes con Más y Mejor Trabajo (Argentina), 2008-today. -Foro Emprezando (Mexico), 2007-today. Staged financing instruments adapted to the needs of young entrepreneurs. Good examples: - iNNpulsa Colombia, through credit lines, venture capitales and angel investors networks (Red Nacional de Angeles Inversionistas). -Capital semilla (Mexico emprende, Fondo Emprendedores), Angel Ventures Mexico (angel investors), Fondo de capital emprendedor (NAFIN).
  11. Entrepreneurship Program for Innovation in the Caribbean With the support from the government of Canada has provided tailored training and finance to 260 entrepreneurs in the high-growth sectors of digital innovation and climate technology, while the Women Innovators Network in the Caribbean has connected and offered capacity building services to more than 350 promising women entrepreneurs. Jamaica: Youth Employment in Digital & Animation Industries Project Nemefits youth with training, digital work opportunities, and seed investments in the digital and animation industries. Programas de formación para jóvenes vulnerables: Argentina: Programa Jóvenes con Más y Mejor Trabajo, que promueve la formación y capacitación dual a lo largo de la vida y el empleo formal entre jóvenes de 18 a 25 años. Programa de gran escala disenado en base a antecesores que demostraron tener impacto en la empleabilidad y formalidad de los beneficiarios. Mexico: Bécate: a través de cinco modalidades capacita a personas de 16 años o más desempleadas, subempleadas o en suspensión temporal de relaciones laborales, para favorecer el empleo o el desarrollo de una actividad productiva por cuenta propia Perú: Jóvenes Productivos principal programa de apoyo al desarrollo de competencias laborales para jóvenes desfavorecidos. 90mil jóvenes, con 40% de tasa de inserción laboral Servicios de formación técnica y profesional: Brasil: Pronatec (Programa Nacional de Acesso ao Ensino Tecnico e Emprego), creado en 2011, que apoya el ingreso a institutos de educación técnica a jóvenes estudiantes y trabajadores, apoya a más de un millón de jóvenes al año. Colombia: SENA (Servicio Nacional de Aprendizaje) ofrece formación gratuita en programas técnicos, tecnológicos y vocacionales relevantes para las actividades productivas de las empresas e industrias colombianas. En emprendimiento: Programas de mentoría: como la Asociación de Start-ups de Campinas (Brasil). Programas de apoyo al desarrollo de proveedores: como el programa de “empresas tractoras” (México). Programas de financiamiento: como iNNpulsa Colombia, a través de líneas de crédito para inversionistas ángeles y capital de riesgo (ej: la Red Nacional de Ángeles Inversionistas). Iniciativas para reducción de trabas al emprendimiento: Ley de Emprendedores (Argentina) Panama: En capacitación e inserción laboral: ProCaJoven (desde 2002) capacitación dual c/intermediación para jóvenes de familias pobres y vulnerables. La evaluación de impacto del programa observó mejoras en los ingresos salariales de los beneficiarios, en especial de las mujeres y de quienes viven en la Ciudad de Panamá (Ibarrarán y Rosas, 2007).   ProJoven (desde 2015): capacitación para jóvenes graduados que se encuentran en el último año de estudios técnicos y vocacionales. Las empresas participantes deben crear un plan de capacitación laboral que el ministerio evalúa y aprueba. Las empresas reciben un subsidio gubernamental por contratar a los graduandos, y deben contratar a 50% de ellos, por lo menos, una vez terminado el contrato de la práctica laboral. Se espera que durante su primer año de operación, 2015-2016, el programa cubra a 1 000 beneficiarios. En los siguientes ciclos el programa podrá expandirse para incluir a todos los jóvenes que obtengan grados técnicos o vocacionales cada año (actualmente unos 11 000). Servicios de formación técnica y profesional: INADEH, la entidad pública encargada de la educación técnica y vocacional, está elaborando un programa de capacitación integral, pensado para instituir las competencias que necesita el sector productivo. El lo que va del 2016 matriculo 74,913 estudiantes y 46,797 graduados en cursos técnicos y profesionales que incluyen Construcción, Mecánica Automotriz, Metal Mecánica, Hotelería, Turismo y Logística. Presupuesto del INADEH 2013: 0.18% ; Beneficiarios 2013: 110,095 Políticas para apoyar el emprendimiento juvenil: El programa Emprendedores, en el que participa la banca (Banesco), impulsa a los emprendedores a través de herramientas administrativas, gerenciales, personales y técnicas. El programa está orientado a jóvenes emprendedores y establecimientos formales, y tiene un fuerte componente regional (en Ciudad de Panamá, pero también San Miguelito, Colón, Arraiján, La Chorrera, Penonomé, Chitré, etc.) para ser más inclusivo. A través del programa Nuevos Emprendedores, SENACYT ofrece recursos para proyectos entre estudiantes universitarios hasta 2 años después de culminar sus estudios. Los beneficiarios se incorporan a una de las incubadoras para desarrollar sus productos y recibir asesoría y acceso a redes de negocios.
  12. Youth policies need to be designed looking towards the future transformations that are affecting the world of work, policy and cities. First, the future of work, shaped by technology, demographics and globalisation, could largely transform the nature of jobs and change the skill set needed by the young to successfully participate in the labour market. The potential creation and destruction of jobs, alongside the change in tasks performed by humans, are transformational forces that could have large socio-economic consequences in Latin America. Policies, specifically related to skills and entrepreneurship, must begin to prepare for these future scenarios today. Second, the future of politics will probably be different. Technology, which is already opening new channels for civic engagement and political participation, will help reinvent democratic interaction and participation; today’s youth are and will be at the forefront of these changes. Finally, Third, the future of cities adds a territorial dimension to public policies that can support opportunities for youth. By 2050, approximately 90% of Latin America’s population will be established in urban regions. This will result in numerous challenges related to financing, public services, transport and infrastructure, including deployment of broadband to accelerate development of information and communication technologies (ICTs). Other issues will revolve around sustainability, climate change, health and well-being. At the same time, the new urban landscape will create opportunities for entrepreneurs to respond with innovative approaches. A shift in policies today is required to meet these challenges and provide youth with the right skills and opportunities for entrepreneurship. Policies should thus be oriented to help younger generations improve their economic, political and social participation in the coming world and support them as key drivers of further socio-economic progress in the region A “smart fiscal adjustment” framework should be put in place, combining taxes, debt and reallocation of expenditure.