Peruvian Employers Seek Skills for A 21st Century Economy

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Peruvian Employers Seek Skills for A 21st Century Economy

The prerequisites to get a good job in today’s economy are as uncertain as the economy itself. Some experts emphasize intelligence. Others say high math and reading skills are a must. Yet some experts laud entrepreneurship and that one need only to express themselves in a competitive and globalized world.

Obviously, all of this is important. Nevertheless, economists in recent years have discovered something that employers, psychologists and many educators and parents have known for a long time. A person’s socio-emotional qualities or “skills” are at least as important as their cognitive capacity or whatever knowledge they may have to place themselves in a changing labor market.

The ability to be responsible, punctual, organized, persevering, interact with others, react and adapt to new situations and experiences, describes –along with cognitive capacity– the generic abilities that are essential in a “well educated” labor force, one prepared to confront the challenges of the future.

Until recently, no gold standard provided a guide to describe and quantify skills and abilities adequately, due in large part to a lack of nation-wide surveys.

Nowadays, experts can examine the way adolescents and young adults develop –within the family and at school–, and document their value in the labor market. Recently, a growing body of evidence in OECD and European countries points to the importance of generic abilities and has placed them in the midst of a debate about educational and professional training policies.

In Peru, as in many Latin American countries, employers complain that scores of workers lack needed skills to compete in a twenty-first century economy. Yet it is not clear which skills are in short supply. Joining efforts with an inter-disciplinary team of Peruvian researchers, the World Bank carried out a report based on employer surveys for a comprehensive study that measures for the first time the cognitive and socio-emotional skills of the labor force and how they affect employability, using proven public policy tools developed by personality and developmental psychologists. Their findings corroborate what is already known about developed economies.

Half of Peruvian employers identify the lack of cognitive and technical skills in workers as the core issue. Meanwhile, nearly 40 percent stress the lack of socio-emotional skills related to work ethic and trustworthiness. Yet, a smaller group of Peruvian employers associate today’s labor force skills gap with the inability of personnel to work as a team, or to the capacity of staff to adapt to changes in the labor market and to take initiative.

Similarly, employer survey results in Peru mirror outcomes in OECD countries —, such as the United States or the United Kingdom —, as well as medium-income countries like India. A Peruvian employer describes it best: “We are trying to assess the communication and numeric skills of workers, despite the fact that we know that we are going to have to train them.

What we don’t know is whether they will arrive on time or if they are going to finish training.” However, the labor market advocates for greater support for workers with improved cognitive and socio-emotional skills in order to obtain better jobs.

This select group earns more, is more satisfied, and is more likely to be independent. By in large, they also have a higher levels of education. In fact, perseverance is rewarded just as much as cognitive capacity in the labor market of urban Peru. As the saying goes: If at first you don’t succeed, try, try again.

A good base of generic skills not only provides better job prospects for a high school graduate. It will also prepare Peruvians for a rigorous tertiary education, and will ultimately offer greater economic returns. New data indicates that, as in other countries, the combination of cognitive ability and resolve at achieving long-term goals are more important than financial limitations in determining which Peruvian youngsters gain access to a university education.

For me, it is not surprising that many public and private universities in Peru and throughout Latin America include admission exams as a primary tool by which to measure a candidates’ skills and individual motivation.

Evidence from other countries also suggests that socio-emotional skills, as well as cognitive ones, reduce the incidence of social problems such as crime, substance abuse, teen pregnancy and even obesity. Thus these factors also have a much wider impact on a population’s wellbeing.

Policies and programs that support family and educational centers have proven a level of effectiveness that is now being adopted by several countries. In sum, it is incredibly important that Peruvian leaders prioritize social and educational policies that will permit communities to lay the foundation to further develop cognitive and socio-emotional abilities and to provide for a more enjoyable more productive job market for its citizens. A fresh set of examples will be examined in future studies.

For more information, view the report and a video on skills and employability in Peru.

To be continued...


Omar Arias

Deputy Chief Economist

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