OECD Development Centre

2nd meeting of the Working Groups of the XVIII IACML

28-30 April 2015, Cartagena, Colombia

David Khoudour

Head of Unit – Migration and skills

Panel 1

Integrated strategies for improving entrance into the labour market

The link between economic growth

and social inclusion

Economic

growth

Social

inclusion

The traditional view

(in particular in Latin America)

Trickle-down

effect

The dynamic view

• Decent wages

• Social safety nets

• Unemployment benefits

• Pensions

• Universal access to

education

Increased human capital

Increased competitiveness

Increased consumption

Economic

growth

Social

inclusion

The link between economic growth

and social inclusion

Labour market

Central role of the labour market

The long period of

economic growth has

enabled LAC countries to

make significant progress

in the labour field

However, many challenges

remain in the region

Economic

growth

Social

inclusion

The link between economic growth

and social inclusion

Education

And skills Labour market

The youth

Women

Immigrants

Informal workers

The challenges of inclusion into

the labour market

Youth neither in employment, education, nor training (NEET)(Share of the population between 15 and 24 years, 2011)

0

5

10

15

20

25

30

HND GTM SLV COL MEX PAN DOM ALC PER URY NIC BRA ARG VEN CRI ECU PRY BOL OCDE

Nota: ALC es el promedio de Argentina, Bolivia, Brasil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico,

Nicaragua, Panama, Paraguay, Peru, Rep. Dominicana, Uruguay y Venezuela.

Promedio OCDE sin Canadá, Chile, Japón, México y Nueva Zelanda.

Fuente: OIT, (2013) "Trabajo decente y juventud en América Latina. Políticas para la acción“, disponible en http://www.ilo.org; y ILOSTAT

In Latin America, 20% of the youth are neither in

employment, education, nor training

Education

And skills Labour market

The youth

Women

Immigrants

Informal workers

The challenges of inclusion into

the labour market

Progress of women integration into the labour

market should continue

Male and female labour market participation in Latin America and the OECD(Share of population by sex between 15 and 64 years, circa 2010)

Fuente: Banco Interamericano de Desarrollo, IDB Labor Markets and Social Security Information System (SIMS), sobre la base de

encuestas de horages nacionales

ALC-19:H, 83%

ALC-19:M, 56%

0

10

20

30

40

50

60

70

80

90

100

GTM HND MEX CRI BRA SLV ECU PAN DOM VEN ARG PRY CHL COL JAM NIC BOL URY PER OCDE

Mujeres Hombres

Education

And skills Labour market

The youth

Women

Immigrants

Informal workers

The challenges of inclusion into

the labour market

45.6

34.9

31.9

25.9

23.2

16.315.0

11.3 10.7 10.58.9 8.7

7.7

4.5 3.9 3.9 3.8

0

5

10

15

20

25

30

35

40

45

50

Immigration rates in selected LAC countries(International migrant stocks as a percentage of the total population, 2013)

LAC countries are not only countries of origin,

but also of destination

Source: UN DESA

Education

And skills Labour market

The youth

Women

Immigrants

Informal workers

The challenges of inclusion into

the labour market

High levels of informality reflect the existence

of low-productive and unprotected jobs

Labour informality in Latin America(Share of workers between 15-64 years who do not contribute to the social security system, circa 2013)

ALC-19, 55%

0

10

20

30

40

50

60

70

80

90

HND NIC BOL GTM PER PRY SLV MEX ECU VEN DOM COL JAM ARG PAN BRA CHL CRI URY

Fuente: Banco Interamericano de Desarrollo, IDB Labor Markets and Social Security Information System (SIMS),

sobre la base de encuestas de horages nacionales

The costs of the lack of inclusion

The lack of inclusion into the labour market generates social costs

But also economic costs

• Insufficient demand (in particular in periods of economic slowdown)

• Lack of fiscal ressources

• Lack of human capital

Peru

Chile

Bulgaria

Hungary

Slovak Republic

Portugal Luxembourg

France

Uruguay

New Zealand

Chinese Taipei

Belgium

Costa Rica

Romania Israel

Germany

IndonesiaColombia

Tunisia

Argentina

Brazil

MalaysiaTurkey

GreeceLithuania

Latvia Russian FederationSpain

United Kingdom

Czech Republic

Denmark

Slovenia

Ireland

Austria

Viet Nam

Switzerland

Singapore

Shanghai-China

Poland

United StatesCroatia

Netherlands

Montenegro

Serbia

Hong Kong-China

EstoniaFinland

Thailand

Japan

Sweden

Australia Canada

Jordan

Macao-China

United Arab EmiratesKazakhstan

Iceland

Qatar

Norway

Mexico

Liechtenstein

Korea

Italy

300

350

400

450

500

550

600

650

051015202530

Mean PISA score

Percentage of variation in performance

explained by the PISA index of socioeconomic status

High quality

Low quality

Low social

mobility

High social

mobility

South-East

Asia

Latin

America

PISA performance: social mobility vs.

education quality, 2013

The costs of the lack of inclusion

The lack of inclusion into the labour market generates social costs

But also economic costs

• Insufficient demand (in particular in periods of economic slowdown)

• Lack of fiscal resources

• Lack of human capital

• Skills mismatches

The lack of skills represents a significant restriction

to employment and competitiveness

Firms identifying an inadequately educated workforce as a major constraint(Percentage of formal firms, circa 2012)

Source: World Bank Enterprise Surveys

35.9

23.8

23.4

21

20

20

17

13.7

Latin America & Caribbean

World

Sub-Saharan Africa

East Asia & Pacific

Middle East & North Africa

South Asia

High income: OECD

Eastern Europe & CentralAsia

Increasing the inclusion into the labour

market: policy recommendations

• Universal social and pension systems

• Women

• Ethnic minorities

• Immigrants

• Vocational training

• Growing enrolments in science & technology

• On-the-job training

• Lifelong learning

• Better information systems

• Labour formalisation

• Youth employment

• Rural areas

Implementing active labour

market policies

Developing skills

strategies

Expanding social benefits

Fighting against

discrimination

Panel 1

Integrated strategies for improving entrance into the labour market

Thank you!

OECD Development Centre

2nd meeting of the Working Groups of the XVIII IACML

28-30 April 2015, Cartagena, Colombia