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Mind the skills gap! Regional and industry patterns in emerging economies

Author

Listed:
  • Ángel Melguizo

    (OECD)

  • José Ramón Perea

    (The World Bank)

Abstract

Most emerging economies are characterised by lagging levels of productivity. While economic growth has been robust in much of the emerging world during the last two decades, it has generally been grounded on factor accumulation, with marginal contributions from productivity. With the economic literature pointing to human capital and skills as a key conduit of productivity, the inability of firms to find the skills they need appears as a key brake on development. This paper aims to identify the dimensions where this skill gap is more prevalent, particularly across emerging regions and industries. We devise an empirical analysis that uses two alternative specifications based on limited dependent variable analysis. The results place Latin America as the emerging region where firms have the greatest problems derived from the lack of adequate skills, well ahead of emerging Asia and Europe, but also of sub-Saharan Africa. In terms of sectors, two advanced manufacturing industries (machinery and motor vehicles) are particularly affected by this relative scarcity of adequately trained workers. Policy recommendations hinge on the need to solve the mismatch between the provision of skills by educational systems and the needs of the economy. La plupart des économies émergentes se caractérisent par des niveaux de productivité faibles. Même si la croissance économique a été robuste dans la plupart des pays émergents au cours des deux dernières décennies, elle a généralement été fondée sur l'accumulation des facteurs, avec une contribution marginale de la productivité. Alors que la littérature économique montre le capital humain et les compétences comme des composantes clés de la productivité, les difficultés des entreprises à trouver les compétences adéquates mettent un frein au développement. Ce document cherche à identifier où cet écart de compétences est le plus dominant, notamment parmi les régions émergentes et les secteurs. Pour ce faire, il élabore une analyse empirique à partir de deux spécifications basées sur des variables dépendantes limitées. Les résultats montrent l'Amérique latine comme la région émergente où les entreprises ont le plus de difficultés à trouver les compétences adéquates, bien avant l'Asie émergente et l’Europe, mais aussi l’Afrique sub-saharienne. Au niveau des secteurs, deux types d’industries manufacturières de pointe (machines et véhicules à moteur) sont particulièrement touchés par cette problématique. Les recommandations politiques reposent sur la nécessité de résoudre l’inadéquation entre offre de compétences des systèmes éducatifs et besoins de l'économie.

Suggested Citation

  • Ángel Melguizo & José Ramón Perea, 2016. "Mind the skills gap! Regional and industry patterns in emerging economies," OECD Development Centre Working Papers 329, OECD Publishing.
  • Handle: RePEc:oec:devaaa:329-en
    DOI: 10.1787/5jm5hkp7v145-en
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    File URL: https://doi.org/10.1787/5jm5hkp7v145-en
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    More about this item

    Keywords

    compétences; entreprise; productivity; productivité;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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