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In Latin America and the Caribbean and in more advanced economies there is evidence that suggests an imbalance between the skills of the workforce and the skills demanded by the productive sector. If this skills mismatch is large and persistent it leads to significant economic and social costs: economies cannot use their human capital efficiently and many individuals cannot access good quality jobs. Correcting these imbalances is not easy; a number of frictions that are prevalent in the labor and education markets limit the capacity of households and education providers to provide skills in line with the requirements of the private sector. In light of this, governments around the world have developed tools that intend to anticipate skills demand in the labor market in order to inform the decision making of households, businesses, training providers and policy makers. A wide variety of tools have been developed, ranging from quantitative econometric models to more qualitative methods such as roundtables and focus groups. This report provides a description of the existing methodologies; an analysis of their objectives, strengths and weaknesses; and a description with illustrative examples. The report stresses the fact that an effective system to anticipate skills demand usually combines a variety of methods and surmounts challenges that are not only technical but also institutional. Systems to anticipate skills demand should not only focus on generating quality data but also on building processes to ensure that the information is effectively used in decision making.

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This guide reviews the principal instruments and surveys developed for assessing workforce skills. Its main objective is to consolidate the existing information and provide an overview of the different types of instruments available. It is also intended to help readers understand and navigate the vast universe of surveys and instruments for assessing skills in adults. For each instrument, it presents a general description, comparisons with other instruments of the same type, and an analysis of its applicability to the region.

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Understanding the causal association between skills and productivity is essential for designing effective training programs. This paper evaluates an intervention aimed at boosting leadership and communication skills among store managers and sales associates from a large Latin American retailer. The empirical analysis is carried out using longitudinal information gathered by the firm and through two skills surveys. The identification exploits the experimental design in the context of a difference-in-difference strategy. The results indicate large positive effects of the training program on store-level productivity. We further link these findings to individual-level performance measures. In particular, we document positive effects on total sales and numbers of transactions for all workers. Regarding the mechanisms, we provide evidence suggesting that the intervention was more effective in boosting leadership skills than communication skills. Spillovers from trained managers to untrained sales representatives also contribute to the main effects. Our findings point towards the possibility of increasing productivity through training programs targeting critical skills.

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This paper examines a training intervention aimed at boosting leadership and communication skills among employees of a large Latin American retailer. The identification exploits an experimental design in the context of a difference-in-difference strategy. Using longitudinal information obtained from the firm and two skills surveys, we document large positive effects of the training on store- and individual- level productivity. The intervention was more effective in boosting leadership than communication skills. Spillovers from trained managers to untrained sales representatives also contribute to the main effects. Our findings confirm the possibility of increasing productivity through training targeting critical soft-skills.

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Labor market institutions shape the return to workers' skills. They define the incentives of firms and workers to invest in general and specific skills, affecting the returns to experience and tenure. This paper presents an empirical assessment of this hypothesis. We take advantage of rich administrative data from Brazil and Chile, two countries with different regulatory frameworks. We focus on young workers as they face to a greater extent the trade-off between accumulating general or specific skills. The analysis is motivated by a simple conceptual framework, from which we derive empirical predictions. It takes into account the potential endogeneity of occupational choices, while allowing for heterogenous returns to tenure and experience.

We find positive average returns to both dimensions in both countries, with larger returns to tenure in Brazil and larger returns to experience in Chile. This is consistent with the original conjecture as the more rigid labor market legislation in Brazil encourages firms to carry out additional investments in young workers' specific skills. Chile's institutions, on the contrary, promote the acquisition of general skills. We further examine how these returns differ by educational attainment, an important policy consideration in the region, and find that more educated workers in both countries face larger returns to experience and tenure relative to their less educated counterparts.

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This paper studies the probability of receiving employer-paid training and other training independent of who finances it for permanent and temporary workers in Chile. The authors use data from the Social Protection Survey, EPS, allowing them to construct a panel of workers with information from 2002, 2004, 2006, and 2009. The results suggest that having a temporary contract in Chile reduces the probability of receiving employer-paid training. The survey also finds that this deficit is not compensated by other types of training. This finding is important for two reasons. First, the proportion of temporary workers that obtain an open-ended contract is low. Second, the productivity growth in Chile after 1997 is practically zero and human capital accumulation is one of the factors that might help to recover the path of productivity growth.

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This paper evaluates the impact of the Bono Trabajador Activo, a training voucher program in Chile, on workers' labor market outcomes. Using detailed administrative datasets of the National Employment Service and the Unemployment Insurance System, [the authors] apply difference-in-difference and [instrumental variable] IV estimators to measure these effects. [The] main results indicate that the voucher program has an overall negative impact on employment and earnings, particularly among individuals who expect to change economic sector. In contrast, [the authors] find that the program improves labor outcomes for females, particularly for those with lower education. The voucher program also improves employment duration and mobility across economic sectors.

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In the last decades, countries in Latin America and the Caribbean have experienced a dramatic increase in the levels of higher education enrollment. Using administrative data from Chile and Colombia, [the authors] find that this phenomenon is not always associated with higher private individual returns. In both countries, there is a significant dispersion in the net returns to higher education and a significant proportion of graduates could be facing negative returns. This means that, for many higher education graduates, net earnings might have been higher if they had not earned a higher education degree. [The authors] hypothesize that while there have been major policy efforts to increase coverage, institutional arrangements that encourage quality and relevance has been insufficient. Corrective measures in this direction are urgent. Sustainable growth requires a labor force with relevant skills and capabilities. In light of [the authors'] results, it is not clear that the higher education systems in these countries are delivering these outcomes.

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This paper provides new evidence to characterize changes in the demand for skills associated with shifts in occupations for a sample of 10 of the G20 countries, using information available from LinkedIn profiles as a new and unique source of dynamic labor market data on occupations and skills. A unique feature of LinkedIn's data is the availability of granular measures of skill importance by country and occupation. This data allows us to examine how similar occupations may differ in their skills composition across different countries, and to measure the corresponding shifts in skill demand associated with changes in occupations for each locality.

Our analysis yielded several key conclusions and recommendations: Across all examined countries, tech-related occupations and advanced digital skills are on the rise. People-centric roles are also growing. Countries with more connected networks of occupations may have a better chance of helping workers to transition out of declining occupations. Alternative data sources complement rather than replace traditional sources of workforce data, therefore investments in modern labor market information systems are necessary to facilitate the interoperability, sharing and dissemination of different sources and types of data. This intelligence can be used by different stakeholders to (1) generate a more complete and timely picture of the labor market; and (2) facilitate a more rapid and informed adjustment of workforce development policies and programs.

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If recent history serves as an example, the labor market will continue to undergo important and increasingly rapid changes in its demand for particular occupations and skills. Therefore, developing systems that can identify skills required in the market and providing tools for people to successfully navigate a changing work environment is necessary. New technologies provide us with new sources of information via access to big data. They can function as 'radars' to detect, almost in real time, how the demand for skills is changing and pick up new skills as they emerge. These new technologies are also leading to the creation of tools that can support workers looking to change jobs. This study sheds light on the changes that labor markets in Latin America and the Caribbean are undergoing in terms of their demand for particular occupations and skills. It also demonstrates the potential of a tool that, by leveraging new sources of labor market data, can help individuals and policy makers navigate the labor market and provide the region's workers with a means to detect skills that can help them move from declining occupations to emerging ones.

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