Latin America: Is better technical and technological higher education the answer?

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A new World Bank study finds that some Chilean technicians with a two-year degree have education returns that are only slightly lower than those of professionals.  (Photo: Dominic Chavez/World Bank)

Two years ago, 23-year-old Pedro Flores became a technician specializing in renewable energy—all thanks to a degree from a technical institute in Maule, located in one of Chile’s poorest regions. After completing his degree in just two years, Flores became the only person in his family to obtain an advanced degree. Today, he lives in Santiago and works for a private solar energy multinational corporation, where he earns a competitive salary that is only slightly below the average for entry-level professionals in his field, most of whom spent over five years in university.

The benefits of shorter technical higher education programs
Flores’ success is an important reminder of the benefits of shorter, more targeted technical education programs, which are becoming an increasingly viable alternative to traditional university programs. Technical/technological education is a type of short-term higher education (with or without technical/technological focus) typically offered in post-high-school curricula that are two years in length and are not designed to lead to a bachelor's degree. Flores, for example, entered the labor market after just two years, contributing actively to the country’s workforce—a remarkable feat given the fact given that less than 35 percent of young Chileans ages 15 to 24 are active participants in the labor market, according to 2017 data from the International Labour Organization (ILO).
Indeed, Flores’ story shows the potential benefits of efficient technical and technological higher education. It is also consistent with the findings of a recent World Bank study: At a Crossroads: Higher Education in Latin America and the Caribbean, which found that some Chilean technicians with a two-year degree in select fields, such as arts, science, and technology, have education returns that are only slightly lower than those of professionals in these fields with a five-year university degree. Nevertheless, Flores’ story is hardly the norm, especially in a region where technical and technological higher education remains limited, faces significant challenges, and has limited success.  

Increased access to higher education, but limited impact on productivity

Access to higher education in the Latin America and the Caribbean (LAC) region has increased dramatically in recent years, from a gross enrollment rate of 21 percent in 2000 to 40 percent in 2010—one of the fastest expansions in the world. Typically, obtaining higher education increases labor productivity and economic growth, but this hasn’t been the case across LAC, where worker’s productivity remains stagnant, despite the rapid expansion of higher education. There are several explanations for this phenomenon, including the limited quality, adequacy, and relevance of higher education. But whatever the reason, this phenomenon remains one of the most significant challenges for sustainable development and poverty reduction in the region (Figure 1).

Gross enrollment rates in higher education vs. worker?s productivity in LAC [2000-2015]
Figure 1: Gross enrollment rates in higher education vs. worker’s productivity in LAC from 2000 to 2015.  
(Source: ILO KILM dataset and UNESCO)


Technical higher education can enhance productivity and attract young people to the workforce
Technical higher education, if well designed and implemented, has the potential to improve workers’ productivity and integration into the labor market. Also, because it is shorter-- just two or three years--it helps reduce student dropout and improves labor force participation rates. Dual programs, which combine on-the-job apprenticeships with technical or vocational training, are a great example of this and countries that have embraced this model, such as the United States, Germany, Sweden, and Switzerland, have youth labor participation rates between 50 and 65 percent—higher than average levels across LAC.  Meanwhile, some LAC countries with high enrollment rates in higher education, such as Chile, Argentina, and Mexico, have youth labor force participation rates that range between 35 and 45 percent—which, coupled with stagnant productivity, continues to undermine economic growth.

Untapped potential

Most of the overall enrollment in higher education in LAC is still dominated by traditional five-year academic programs. According to "Higher Education in Latin America: Trends and Explanations," which was published in 2013, just 15 percent of people across LAC who have ever enrolled in higher education have completed technical degrees, as compared to 25 percent worldwide. This figure has remained largely unchanged over the past 20 years.

With only few exceptions, such as Colombia, Brazil, and Chile, technical education remains limited across LAC, and most efforts to further higher education continue to focus on universities. The challenge is compounded by the fact that technical programs in the region carry stigma and lack prestige, and many young people still prefer to pursue general academic education at the secondary and tertiary levels. Furthermore, many individuals with technical degrees face a career “ceiling” and are unable to secure promotions at work as quickly as people with traditional academic degrees.

In addition, the technical higher education programs in LAC that do exist largely fail to respond to the needs of the private sector. In many countries, these programs are offered by a plethora of low-quality providers that operate in a mostly unregulated market. Except for a few countries, such as Brazil and Costa Rica, technical higher education programs lack “dual” learning systems at scale. Also, with the exceptions of Mexico and Chile, many of these programs are focused on the service sector (i.e., accounting, tourism, computer science), with less emphasis on manufacturing, agroindustry, and high-technology sectors. In many cases, this occurs because programs and institutions underinvest in equipment and laboratories.

A building block for the higher education reform

International experience has shown that technical and technological higher education has the potential to increase productivity, while improving competitiveness and opportunities to join the labor force. Experience has also shown that, even in the most developed contexts, not all citizens have access to university education—but that young people can remain competitive in the labor market even without a university education. As the experience of countries such as the United States, Switzerland, and Germany have shown, it is possible to thrive in the labor market by obtaining expertise in technical and technological fields, which continue to be in-demand and essential for growth. Technical education has opened doors and job opportunity for young people across the world—and LAC should be no exception. Policymakers across the region should take note and begin to put technical and technological education reform higher up on the agenda.
Find out more about higher education in LAC in our report:“At a Crossroads : Higher Education in Latin America and the Caribbean”.

Find out more about World Bank Group Education on our website and on Twitter.

Check out all our resources on higher education here.




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