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Rising youth unemployment rates have been increasingly recognized as a serious challenge in developing and advanced economies, as the trend indicates a potential skills gap between the demands of the workforce and recent graduates. Effective dual education programs utilizing a combination of classroom instruction and practical skill training present an approach to developing a skilled workforce and meeting workforce demands. To evaluate the impact of the Philippine Dual Training System on labor market outcomes, this paper analyzes data from a recent survey tracking graduates from the Dual Training System and regular vocational training programs provided by technical vocational training institutes. The data analysis reveals that the Dual Training System has a significantly higher rate of return on labor market earnings compared with regular, classroom-only vocational training programs, particularly among high school graduates who did not perform well academically during basic education. The magnitude of the impact of the Dual Training System is also likely to increase in correlation with the intensity of the on-the-job component.

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Previous research has shown that people with higher cognitive skills (mental abilities) and socioemotional skills (behaviors and personality) get better labor market outcomes. It is unclear, however, if this conclusion applies to low- and middle-income countries, given that existing literature builds on studies that are dominantly about high income countries. In this paper, we explore how cognitive and socioemotional skills of adults, ages 15-64, relate to their labor market outcomes in the context of Colombia. Controlling for a range of confounding factors in a cross sectional survey, we do find that adults with higher skills also have better outcomes, while cognitive and socioemotional skills correlate with different ones and seemingly through different channels. Adults with higher cognitive skills have better jobs (with higher earnings, more formal, and high skilled) and are more likely to complete tertiary education. Socioemotional skills correlate more modestly with having a better job but more strongly with labor market participation and tertiary-education completion. Results suggest that adults with both cognitive and socioemotional skills tend to do better in the labor market and that policies boosting the development of both types may be beneficial in Colombia.

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This paper examines the relationship between individuals' skills and labor market outcomes for the working-age population of Colombia's urban areas. Using a 2012 unique household survey, the paper finds that cognitive skills (aptitudes to perform mental tasks such as comprehension or reasoning) and socio-emotional skills (personality traits and behaviors) matter for favorable labor market outcomes in the Colombian context, although they have distinct roles. Cognitive skills are greatly associated with higher earnings and holding a formal job or a high-qualified occupation. By contrast, socio-emotional skills appear to have little direct influence on these outcomes, but play a stronger role in labor market participation. Both types of skills, especially cognitive skills, are largely associated with pursuing tertiary education. The analysis applies standard econometric techniques as a benchmark and structural estimations to correct for the measurement error of skill constructs.

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Although the Philippines has achieved remarkable progress in raising the education level of its labor force, the standard proxy for educational attainment - years of formal schooling - is increasingly inadequate as a measure of workforce skills. About one-third of employers report being unable to fill vacancies because applicants lack requisite skills. Most of these missing skills are socioemotional skills, which are increasingly crucial to the types of jobs being created by the global economy. This book presents new evidence from employer and household surveys on the role of socioemotional skills in the Philippine labor market and reveals the following: (1) two-thirds of employers report difficulty in finding workers with adequate work ethics or appropriate interpersonal and communications skills; and firm-based training increasingly focuses on socioemotional skills; (2) the more educated and employed workers tend to score higher on measures of grit, decision making, agreeableness, and extraversion; and (3) socioemotional skills are associated with an increase in average daily earnings, in particular for women, young workers, less-educated workers, and those employed in the service sector.

Studies suggest that primary school is the optimal age for shaping socioemotional skills, but the Philippines' elementary education curriculum devotes limited resources to their development. Schools are judged solely by students' performance in cognitive achievement tests, but not on soft-skills competencies, and teachers are not appropriately trained to foster the development of them. Interventions that target workers entering the labor force can also effectively bolster their socioemotional skills, complementing efforts to improve labor-market information and vocational counseling.

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This paper documents the evolution of wage differentials and the supply of workers by educational level for sixteen Latin American countries [Argentina, Brazil, Bolivia, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, and Venezuela] over the period 1991-2013. We find a pattern of rather constant rise in the relative supply of skilled and semi-skilled workers over the period. Whereas the returns to secondary education fell over time, in contrast, the returns to tertiary education display a remarkable changing pattern common to almost all economies: significant increase in the 1990s, strong fall in the 2000s, and a deceleration of that fall in the 2010s. We conclude that supply-side factors seem to have limited explanatory power relative to demand-side factors in accounting for changes in the wage gap between workers with tertiary education and the rest.

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It has been argued that a factor behind the decline in income inequality in Latin America in the 2000s was the educational upgrading of its labor force. Between 1990 and 2010, the proportion of the labor force in the region with at least secondary education increased from 40 to 60 per cent. Concurrently, returns to secondary education completion fell throughout the past two decades, while the 2000s saw a reversal in the increase in the returns to tertiary education experienced in the 1990s. This paper studies the evolution of wage differentials and the trends in the supply of workers by educational level for 16 Latin American countries between 1990 and 2000. The analysis estimates the relative contribution of supply and demand factors behind recent trends in skill premia for tertiary and secondary educated workers. Supply-side factors seem to have limited explanatory power relative to demand-side factors, and are only relevant to explain part of the fall in wage premia for high-school graduates. Although there is significant heterogeneity in individual country experiences, on average the trend reversal in labor demand in the 2000s can be partially attributed to the recent boom in commodity prices that could favor the unskilled (non-tertiary educated) workforce, although employment patterns by sector suggest that other within-sector forces are also at play, such as technological diffusion or skill mismatches that may reduce the labor productivity of highly-educated workers.

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