Skills, productivity and employment growth: the case of Latin America

This study aims to illustrate the relationships between training and workers’ skills, productivity and the growth of quality employment in Latin American societies. It analyses existing information and case studies of four different countries: Argentina, Brazil, Chile and Peru.

The paper reveals that there is great heterogeneity among the countries in Latin America, and indeed within the borders of individual countries. Industrialisation has been under way for more than fifty years in quite a number of countries but this has not been a continuous or permanent process, it has been interrupted by serious crises. In terms of geographical distribution, industrialisation is extremely uneven, although it does not consist just of isolated enclaves like on some other continents.

Concluding remarks on the four countries are:

Argentina:

• after a series of wild fluctuations it seems that the Argentine economy has now settled into a period of high growth
  
• a clampdown on productive units in the sectors with most informal employment (building, trade, clothing, footwear) would certainly cause a rise in unemployment, so it would be better to pursue inclusion policies that would raise productivity in these sectors, particularly in micro-enterprises, through a modified tax policy and by providing training for entrepreneurs and workers.

Brazil:

• Brazil can definitely be classed as an emerging country - its economy is so big, its territory so vast and its economic policies have a continuity that transcends changes of government, so it easily qualifies as one of a handful of countries that lead the developing world
  
• there are immense internal divisions between people inserted in marginal activities and those integrated into the formal system, but efforts of employers’ and workers’ organisations and NGOs may help to point the way.
  

Chile:

• of the four countries, Chile has the lowest proportion of informal work, is highly competitive internationally and has good levels of productivity, all of which is the fruit of policies that are coherent and constant
  
• however, the funds invested in training for people who are already in the formal sectors of the economy are vastly disproportionate to the money and organisation devoted to educating the most disadvantaged sectors but this problem has been recognised and there is clearly the political will to tackle it.
  

Peru:

• of these four countries, Peru is in the most complex situation - in recent years its economy has shown steady growth and the current political situation seems relatively stable, but the fact that so much of production is based on extractive industries severely limits possibilities for growth and for increased social inclusion
  
• the outlook for economic development and decent work is not promising because the informal economy is so huge - it is important to attack in critical areas like improving the quality of education, but action is also needed in the sphere of production to take advantage of the energy and the enterprise capabilities that are wasted in the informal economy.