Many universities are not connected to the world of work

February 21, 2015


University students in Colombia 

Isabelle Schaefer / Banco Mundial

Latin America has some world-class universities, but there are others – the majority – that are disconnected from the labor reality, according to a World Bank expert

Just four of the 400 best universities listed in the Times Higher Education ranking are Latin American. Although a list does not fully reflect the complexity of the university environment in the region, it does suggest that challenges remain for improving the quality of higher education.

According to Wendy Cunningham, a specialist in labor economics and youth development at the World Bank, there are excellent universities in the region, but also too many of low quality that “promise students a future they cannot deliver.”

According to the International Labour Organization, some eight million Latin American youth are unemployed and another 27 million have informal employment. Six of every 10 employed youth in the region work in the informal market.

Nearly 42% of Latin American young people access higher education. So the question is, what skills should universities teach to enable graduates to find formal employment in Latin America?  Wendy Cunningham responds below:

Question: Are Latin American universities actually preparing young people for employment?

Response: There are some world-class universities that prepare students for the modern world of work in different fields. However, there are too many low-quality universities that promise their future students something they cannot deliver. Many of these universities are not connected to the world of work and offer study programs that are not in demand or teach skills that do not meet market standards. Unfortunately, too many students of these universities graduate with an enormous financial debt and few additional skills that would enable them to work and repay that debt.

Q: What are the obstacles Latin American youth face when looking for work?

R: First, more than half of employers – statistics vary by country– find new employees through friends in the same industry or through their own workers. The result is that the job is often not an ideal match for the young person’s skills and interests.

Second, employers often prefer to hire workers with job experience. Young people do not have an employment history to demonstrate their skills, which makes it riskier for employers to hire them.

Finally, many young people enter the labor market at the same time. At the end of the school year, graduates flood the labor market, which does not follow the same calendar. It takes time for the labor market to absorb recent graduates.

Q: What skills do young people often lack, according to employers?

R: A global analysis of the skills most in demand by employers shows that they most value high-level socio-emotional and cognitive skills. The skills most often mentioned are teamwork, honesty, punctuality, problem-solving and the ability to work independently. The results were the same regardless of the industry, the nature of the job, the employers’ skill level, the modernity of the company or the region of the world.

" The statistics show that, over time, many young people “graduate” from the training received in the informal sector to move on to the formal sector. But not all youth reach this step "

Wendy Cunningham

specialist in labor economics and youth development at the World Bank

Q: What explains this lack of skills?

R: A recent McKinsey global study demonstrated that 72% of educators surveyed felt that they had adequately prepared young people for the labor market, yet just 42% of employers believed that recent graduates were adequately prepared. Compared with the other countries studied, the difference in perceptions was particularly marked in two Latin American countries (Mexico and Brazil).

The exact causes of the lack of skills are not clear. But there are some theories. First, the quality of education: the skills acquired do not meet the standards or the needs of the labor market. Second, schools are only just beginning to change teaching practices to teach high-level cognitive skills, which are learned through active problem-solving, teamwork and project-based learning. Third, throughout the world, teaching socio-emotional skills has been left to the home environment. We recently completed a study which found that primary school is the ideal time to teach these skills, followed by high school (during turbulent adolescence).

Q: How can we improve the link between universities and companies or organizations?

R: That seems like a simple question but it actually poses many challenges in practice. We are seeing that employers’ organizations give better guidance to the education sector when they have an immediate interest in the process. In many developed countries, educators and universities form partnerships for research, implement student internships in the companies and share professionals when employers give classes at universities. Latin America has many opportunities to expand on these arrangements to ensure that universities are more present in companies and vice versa.

Q: According to the ILO, youth unemployment is 13.9%. Additionally, six of every 10 Latin American youth can only find work in the informal sector. What can be done to improve this situation?

R: Statistically, if we look at the number of youth who enter the labor market in a particular year, Latin American youth are no worse off than adults who change jobs. They make the transition at the same rate as adults. The high numbers appear to originate from the fact that too many people are looking for work at the same time; it takes time for the labor market to absorb them all. Of course, this varies by country. In some labor markets, such as that of Argentina, youth face long periods of unemployment. But so do adults. In that case, it is an overall employment issue rather than a specific problem of youth.

Second, employment in the informal sector. It is quite easy to enter the informal sector, which provides opportunities to develop skills and the coveted job experience so often necessary for future employment. The statistics show that, over time, many young people “graduate” from the training received in the informal sector to move on to the formal sector. But not all youth reach this step and they remain in the informal sector for much longer. This situation is actually a reflection of a wider problem with labor market structures rather than with education quality, although these two concepts are related, of course.