• One third of the working age population in low- and middle-income countries lack the basic skills required to get quality jobs, leaving them unable to achieve their full productive potential and limiting economic investment and growth. 

    The challenge is further exacerbated by a rapidly changing global economy that increasingly requires workers to be innovative, flexible and adaptive. According to World Bank calculations, more than two billion working-age adults are not equipped with the most essential literacy skills required by employers. Among young adults under the age of 25, the number is about 420 million worldwide.

    Foundational skills, such as literacy, provide critical scaffolding for young people and are a prerequisite for numeracy, problem solving, and socio-emotional skills. Helping young people develop these skills makes economic sense. Unskilled workers are forced into unemployment or are stuck in unstable low-wage jobs that offer little career mobility or growth. As they age, they become increasingly vulnerable to job losses and labor market shocks.  

    The results are devastating on a national level as well. Low skills reduce labor force productivity and make investment less attractive, decreasing the transfer of technology and “know-how” from high-income countries. Low skills also perpetuate poverty and inequality because the private sector can’t flourish in a country that doesn’t have a skilled workforce to sustain it.

    Broadly, there are three types of skills:

    1.      Cognitive skills include literacy and numeracy. They refer to the ability to understand complex ideas, adapt effectively to the environment, learn from experience, and reason.

    2.      Socio-emotional skills refer to the ability to navigate interpersonal and social situations effectively and include leadership, teamwork, self-control, and grit.

    3.      Technical skills refer to the acquired knowledge, expertise and interactions needed to perform a specific job, including the mastery of the materials, tools, or technologies.  

    Key issues:

    Access. Government policies must promote equity in access to education and learning. Across the world, investments in education—from preschool through higher education—have high returns. The wage penalty for low literacy is nine percentage points in Colombia, Georgia and Ukraine, and 19 percentage points in Ghana. And the opposite is also true: In Brazil, graduates of vocational programs earn wages about 10 percent higher than those with a general secondary school education.

    Quality.  Many young people attend schools without acquiring basic literacy skills, leaving them unable to compete in the job market. More than 80 percent of the entire working age population in Ghana and more than 60 percent in Kenya cannot infer simple information from relatively easy texts.

    Early drop out. For every 100 students entering primary education, just 35 complete upper secondary school. Catching up later without foundational skills becomes nearly impossible. Indeed, evidence shows that second chance adult education programs have limited success and on-the-job training usually favors workers with more education and skills. Second-chance programs provide an important opportunity to get low-skilled youth back on track.  

    Cost. Whether a young adult has resources to continue training is a strong predictor of how much education he or she will pursue. In Brazil and the United Sates, the cost of post-secondary education is cited as a top reason for failing to continue in education and training. In many countries, social norms limiting women, minorities, and disenfranchised youth also contribute to the skills challenges.

    Relevance. Technical and vocational education and training—which can last anywhere from six months to three years— can give young people, especially women, the skills to compete for better paying jobs. Nevertheless, a wide range of training programs exist, from teaching specific skills to sparking entrepreneurship and more needs to be done to ensure a relevant curriculum. Less than a third of training programs have positive results for earnings and employment and even those that are successful are costly, with returns that rarely justify the investment. Private sector partnerships and workplace training have been important in helping create programs that match the needs of the labor market and teach critical skills.

    Last Updated: Oct 10, 2017

  • The World Bank Group (WBG) has joined efforts with countries and multilateral development partners to ensure that individuals have access to quality education and training opportunities, while also supporting employers to locate the skills they need. It provides financial and analytical assistance to governments in a wide range of areas, from system and institutional development to more focused training programs.   

    More work needs to be done on designing policy interventions that better support skills development. For this reason, the WBG is also engaged in program and policy research and analysis. Among its analytical work on skills, two initiatives have applied standardized tools in several countries, generating internationally comparable data: Skills Toward Employment and Productivity (STEP) Skills Measurement and SABER-Workforce Development (WfD).

    The STEP program is the first-ever initiative to measure skills in low and middle-income countries. It provides a simple conceptual framework that can help policymakers, analysts, and researchers think through program designs that enhance productivity, and promote economic growth. It also teaches a multi-dimensional approach to skills that include cognitive, socioemotional, and job-relevant skills.

    The framework focuses on five interlinked steps:

    Step 1. Getting children off to the right start by developing the technical, cognitive, and behavioral skills early in life that create a framework for later success. Research shows that the handicaps built in the early years are difficult, if not impossible, to remedy later in life and that effective early childhood development programs can have a very high payoff.

    Step 2. Ensuring that all students learn by building stronger systems with clear learning standards, good teachers, adequate resources, and a proper regulatory environment.

    Step 3. Building job-relevant skills by developing the right incentives for both pre-employment and on-the-job training programs and institutions.

    Step 4. Encouraging entrepreneurship and innovation by creating an environment that encourages investments in knowledge and creativity. 

    Step 5. Facilitating labor mobility and job matching by moving toward more flexible, efficient, and secure labor markets.

    STEP has been implemented in several countries, including Armenia, Azerbaijan, Ghana, Lao PDR, Libya, Serbia, Ukraine, and the Yunnan Province in China.  Ghana is among the first two sub-Saharan countries, along with Kenya, where the STEP assessment of skills has been carried out. The report (2017) found that most of the employed population works in low-skilled occupations in the informal sector. The report highlights Ghana’s unrealized human capital potential and is helping policymakers in the country better understand—and meet—the challenges they face.  

    In addition, the WBG has worked on a workforce development program through Systems Approach for Better Education Results (SABER), an initiative to produce comparative data and knowledge on education policies and institutions, with the aim of helping countries systematically strengthen their education systems. SABER Workforce Development (WfD) focuses on the effectiveness of education and training systems so that young people are acquiring in-demand skills. It has been implemented in more than 30 countries around the world and helps countries benefit from other nations’ experiences in their quest for better results when designing workforce development policies and institutions.

    In partnership with the Korean Ministry of Labor and the Human Resources Development Service of Korea, the World Bank Group is managing the Promoting Skills and Job Creation in East Asia program, which aims to promote skills development and job creation in the region. Read more about skills in East Asia here.

    Last Updated: Oct 10, 2017

  • Recognizing the importance of skills in the global economy, the WBG is increasingly supporting programs that support skills development through financing, policy advice, technical support, and partnership activities at the country, regional, and global levels. Some recent examples include:

    Dominican Republic: In the Dominican Republic, the WBG and the Inter-American Development Bank successfully implemented a Youth Training and Employment Program that provided vocational and life skills training and on-the-job internships to poor, at-risk youth. An impact evaluation of the program showed that graduates, particularly women, were more likely to have a formal job and earn a higher income. Teenage pregnancy rates were also lower among participants. More than 38,000 at-risk youth, half of them women, benefited from the program, which was awarded Best Practices in Youth Policies and Programs in Latin America and the Caribbean by the World Bank and the United Nations Development Program.

    Sri Lanka: A $101.5 million Skills Development Project is creating a more employable workforce in Sri Lanka by increasing access to high quality skills development programs that meet the needs of the country’s growing economy. Although Sri Lanka’s workforce is the most educated in South Asia, with about 96 percent primary school completion and 87 percent secondary school completion, youth unemployment is high and many employers complain about a lack of skilled employees. An estimated 830,000 Sri Lankan youth are expected to join the labor market with more marketable skills as a result of the program.

    Kenya: In Kenya, where youth unemployment is high, the Youth Employment and Opportunities Project is helping an estimated 280,000 young Kenyans develop in-demand skills. The program engages private sector employers to offer training, supports self-employment by encouraging new business start-ups, improves access to labor market information, and strengthens youth policy development through capacity building support to the Ministry of Public Service, Youth and Gender Affairs.  

    Kazakhstan: The  Kazakhstan Skills and Jobs Project provides relevant training to unemployed, unproductively self-employed, and current employees in need of training. The project aims to improve public employment services improve training programs so that they better reflect the needs of the market. 

    Last Updated: Oct 10, 2017

  • The WBG continues to foster global partnerships to improve skills development around the world.

    Solutions for Youth Employment (S4YE) is a multi-stakeholder coalition among public sector, private sector, and civil society actors that aims to provide leadership and resources for catalytic action to increase the number of young people engaged in productive work. The S4YE coalition was founded, in partnership, by Accenture, the International Labour Organization (ILO), the International Youth Foundation (IYF), Plan International, RAND Corporation, the World Bank Group, and Youth Business International (YBI).

    Last Updated: Oct 10, 2017



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Alexandria Valerio

Senior Economist


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