Technical careers, effective for economic recovery in Latin America – World Bank

RIO DE JANEIRO, BRAZIL – Short-cycle higher education programs, such as technical careers, can be very effective in boosting employment and economic recovery in Latin America and the Caribbean, hard hit by the Covid-19 pandemic, the World Bank said Wednesday.

Technical courses, generally of two or three years’ duration and oriented to the labor market, offer relatively quick and well-paid job opportunities. As such, they can help generate the human capital needed to overcome the unprecedented economic crisis caused by the covid-19 pandemic, the Washington-based development institution said.

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“Countries in the region must promote the transformative potential of technical careers,” said Carlos Felipe Jaramillo, World Bank vice president for Latin America and the Caribbean.

This becomes especially urgent given the need for labor insertion of millions of people pushed into poverty by the pandemic. Jaramillo said as he presented the report “The Fast Track to New Skills: Short Higher Education Programs in Latin America and the Caribbean.”

The report highlighted the advantages of this type of higher education.

Graduates of technical programs earn on regional average up to 60% more than high school graduates without any higher education. And they make on the regional average 25% more than college dropouts. They also have lower rates of unemployment and informal employment.

Despite these benefits, the proportion of students in higher education enrolled in technical careers averages 9% in Latin America and the Caribbean, much lower than in other regions of the world (34% in East Asia and the Pacific, 30% in North America, 21% in Sub-Saharan Africa, 18% in Europe and Central Asia).

Three Latin American countries with a high proportion of students enrolled in technical careers are Colombia (31%), Peru (25%), and Chile (24%).

FOCUS ON THE PRODUCTIVE SECTOR

Consulted by AFP, María Marta Ferreyra, senior economist at the World Bank and one of the report’s authors, called for the implementation of policies to favor the growth and quality improvement of technical programs in Latin America the Caribbean. “Technical careers should focus on producing the skills required by the productive sector,” she emphasized.

“Our research shows that the programs with the most employment success for their graduates are those that interact the most with the private sector, for example, to find out what companies need,” she added.

She also urged that job openings, which were concentrated in computers, technology, engineering and science, administration, and finance according to pre-pandemic data, were addressed.

Ferreyra noted that the region produces a low proportion of graduates in these areas compared to the United States and countries in East Asia and the Pacific, or Europe and Central Asia.

“Previous studies suggest that the lack of innovation plagues our companies is associated with a shortage of these graduates. This affects the region’s performance in international markets,” she warned.

REALLOCATING RESOURCES TO THE PRIVATE SECTOR

One challenge for Latin America and the Caribbean countries is to find the resources to launch technical careers that are useful for their development.

According to Ferreyra, countries will most likely not have additional public resources to finance this type of training at a time of severe fiscal restrictions. They will then have to make better use of the resources that already exist. “At the moment, countries subsidize university students more than technical students, even though the latter have higher graduation rates and come from poorer households,” she said.

“Moreover, graduates of short programs have better employment outcomes than people who start and do not complete a university program,” she said. “Therefore,” Ferreyra pointed out, “reallocating part of the resources already existing for higher education toward technical careers would be not only efficient but also equitable.”

The expert suggested increasing public resources – by law, for example – in times of recession, when workers lose jobs and acquire new skills.

Ferreyra nevertheless considered it “fundamental” to appeal to private resources and pointed to income-contingent loans, which students can pay back as they are able when they get jobs. “It will not be fiscally possible to continue financing the expansion of the higher education system with public resources alone,” she warned.

Source: AFP