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Skills for the 21st Century in Latin America and the Caribbean


  • Cristian Aedo
  • Ian Walker


There is growing interest, worldwide, in the link between education systems and the production of skills that are valued in the labor market. With growth stagnating and unemployment soaring in much of the world, educators are being asked to focus more on producing skills that feed into labor productivity and support the sustainable growth of employment and incomes. This timely volume contributes important new findings on the dynamics of education systems and labor market outcomes in Latin America and the Caribbean (LAC). It analyzes an important recent shift in labor market trends in LAC: the first decade of the 21st century has witnessed a marked decline in the earnings premia for university and secondary education. This, in turn, is contributing to reduced income inequality across the region. The recent trend contrasts with the sharp rise in tertiary earnings premia that was observed in the 1990s and that helped to reinforce high levels of income inequality in the region at that time. The authors recommend that, having achieved very large increases in secondary and tertiary enrollment, the region should now focus on improving the quality of its education systems and the pertinence of education curricula for the needs of the labor market. At age 15, the learning achievement of the average Latin American student still lags two years behind his or her Organization for Economic Co-operation and Development (OECD) contemporary. The study opens up an important agenda for future research. While the evidence presented on the trends in education earnings premia is clear, the conclusions about the causes and significance of those trends are largely based on suggestive evidence for a limited number of countries, and are not definitive because of data limitations. The findings call for further in-depth analysis of the nature of skill mismatches, to inform policies that can strengthen the region's future economic growth by enhancing the productivity and earnings potential of the workforce.

Suggested Citation

  • Cristian Aedo & Ian Walker, 2012. "Skills for the 21st Century in Latin America and the Caribbean," World Bank Publications, The World Bank, number 2236.
  • Handle: RePEc:wbk:wbpubs:2236

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    References listed on IDEAS

    1. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
    2. James Albrecht & Susan Vroman, 2002. "A Matching Model with Endogenous Skill Requirements," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 283-305, February.
    3. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    4. Albrecht, James & Navarro, Lucas & Vroman, Susan, 2010. "Efficiency in a search and matching model with endogenous participation," Economics Letters, Elsevier, vol. 106(1), pages 48-50, January.
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    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. World Bank, 2015. "Central America Social Expenditures and Institutional Review," World Bank Other Operational Studies 22672, The World Bank.
    2. Paola Azar Dufrechou, 2018. "Electoral politics and the diffusion of primary schooling: evidence from Uruguay, 1914-1954," Working Papers wpdea1801, Department of Applied Economics at Universitat Autonoma of Barcelona.
    3. Bentaouet Kattan,Raja & Székely,Miguel, 2015. "Analyzing the dynamics of school dropout in upper secondary education in Latin America : a cohort approach," Policy Research Working Paper Series 7223, The World Bank.
    4. World Bank, 2014. "Honduras Social Expenditures and Institutional Review," World Bank Other Operational Studies 21804, The World Bank.
    5. Cunningham, Wendy & Villasenor, Paula, 2014. "Employer voices, employer demands, and implications for public skills development policy," Policy Research Working Paper Series 6853, The World Bank.
    6. Wendy V. Cunningham & Paula Villaseñor, 2016. "Employer Voices, Employer Demands, and Implications for Public Skills Development Policy Connecting the Labor and Education Sectors," World Bank Research Observer, World Bank Group, vol. 31(1), pages 102-134.
    7. Peter Paz & Carlos Urrutia, 2015. "Economic Growth and Wage Stagnation in Peru: 1998–2012," Review of Development Economics, Wiley Blackwell, vol. 19(2), pages 328-345, May.
    8. Daniel Lederman & Julián Messina & Samuel Pienknagura & Jamele Rigolini, 2014. "Latin American Entrepreneurs : Many Firms but Little Innovation
      [El emprendimiento en América Latina : muchas empresas y poca innovación]
      ," World Bank Publications, The World Bank, number 16457.
    9. Verónica Alaimo & Mariano Bosch & David S. Kaplan & Carmen Pagés & Laura Ripani, 2015. "Jobs for Growth," IDB Publications (Books), Inter-American Development Bank, number 90977, February.
    10. Lederman, Daniel & Rojas, Diego, 2014. "Export shocks and the volatility of returns to schooling : evidence from twelve Latin American economies," Policy Research Working Paper Series 7144, The World Bank.
    11. Azar Dufrechou, Paola, 2016. "The efficiency of public education spending in Latin America: A comparison to high-income countries," International Journal of Educational Development, Elsevier, vol. 49(C), pages 188-203.
    12. A. Fiszbein & C. Cosentino & B. Cumsille, "undated". "The Skills Development Challenge in Latin America: Diagnosing the Problems and Identifying Public Policy Solutions," Mathematica Policy Research Reports 6e445252b5614db2be1d4bc3f, Mathematica Policy Research.
    13. Carolina González-Velosa & Graciana Rucci & Miguel Sarzosa & Sergio Urzúa, 2015. "Returns to Higher Education in Chile and Colombia," IDB Publications (Working Papers) 88676, Inter-American Development Bank.


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