1. Findings from STEP: LAO PDR
Household Survey 2012
April 29, 2013
Ximena Del Carpio
Social Protection and Labor
Human Development Network

2. 2
Rationale
1. Need for skilled labor, absence of current levels
• Growing economy, especially in mining, banking, services.
• Firms are facing major problems finding skilled workers, especially in
the services sector (World Bank Enterprise Survey 2009).
• Analytical work is a key input to government’s revision of the Lao
PDR National Human resource Development Strategy.
2. Lao Development Report
• WB flagship report, the 2013 Lao Development Report, focusing on
human resource development.
• New data, analysis, options and dialogue will be based on actual
figures.
3. Future operation to improve skill matches
• Project preparation.

3. Expected Outcomes from STEP+
A clear articulation of
what results might look
like in a Human
Resource Development
Strategy (and/or 8th
National Development
Plan), with clear and
measurable goals on
skills development.
A baseline (“situation
analysis”) on where
Lao is today and may
be heading
Options for Action
3

4. The Lao STEP Surveys
4
1. Household 2011/12:
1. Urban and Rural (no-Remote) representative
2. Sample size is 2849 households and 14,349 people
3. 51% female in the household sample, and 60% female for skills modules
4. Survey included standard HHS questionnaire, a Skills Module and Cognitive test “Education
Testing Services (ETS)”
5. Local data collection firm collected data over a 3 month period through visits individual
households
2. Enterprise Survey: Investment Climate + Skills 2012
1. Six urban labor markets (north, VTE, central and south)
2. All sectors of the economy except agriculture
3. Sample is 400 firms (5+ employees formal sector)
4. Statistically representative
5. Local data collection firm interviewed businesses over a four month period

5. Few people have high education levels, and even
fewer in rural areas
Only 20% of rural women
proceed to secondary
education compared to
51% in urban areas.
Source: STEP Household Survey 2011-12.
4 7
12
29
10
16
26
24
20
26
30
26
21
23
15
14
7
4
6
1
11
11
3
15
9
711
4 1
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Male Female Male Female
Urban Urban Rural Rural
University or postgraduate
Upper sec and vocational
Upper secondary
Prim or lower sec, and vocational
Lower secondary
Primary
Primary, incomplete
No schooling

6. Lao workers in semi-or-low-skilled occupations have
low basic education levels…
6
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Managers
Professionals
Technicians and associate professionals
Clerical support workers
Service and sales workers
Skilled agricultural, forestry and fishery workers
Craft and related trades
Plant and machine operators and assemblers
Elementary occupations
Total
TypeATypeBTotal
Primary or lower Lower secondary Upper secondary Diploma Bachelor Master & higher

7. Focus on urban population of the age 25 –
44
• Age 25: Born in 1987
Finished education
• Age 44: Born in 1968
Age 7 in 1975
• 44% of the working age population

8. Employers report literacy, numeracy and
technical skills as the most desired “hard” skills
8
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Mgt/Prof/Technical
Clerical/Service/Sale
Skilled Agri/Crafts
Operator/Elementary
Desired Job-Related Skills by Occupation
Literacy Specific technical skills Numeracy
Communication skills Leadership Creative and critical thinking
Team work Foreign Language Problem solving
Time management Independent

9. Literacy
People in Lao read but much less than in
Vietnam
8.4 12.1
77.4
32.4
12.3
25.9
29.6
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Lao Vietnam
Reading intensity in the past 12 months:
Lao and Vietnam
High
Medium
Low
None

10. … not only because of lower educational
attainment
42.8
14.4
47.9
23.4
9.2
62.2
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Lao Vietnam
Reading intensity of university graduates:
Lao and Vietnam
High
Medium
Low

11. Even students currently studying at
universities
don’t read much
58.7
9.5
37.0
12.6
4.2
76.1
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Lao Vietnam
Reading intensity of university students:
Lao and Vietnam
High
Medium
Low

12. The literacy exercise module confirms the
finding
Vietnam: Score distribution by education

13. With post secondary education, only 30% got
all answers right
Lao: Score distribution by education

14. Half of high-skilled workers are satisfied with
their literacy skills
51.2
64.8
48.8
35.3
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Lao Vietnam
Has a lack of skills kept you from getting a job or a
promotion?
No
Yes

15. 15
Non-cognitive Skills

16. Conscientiousness is a highly desired “soft” skill
by employers
16
0% 20% 40% 60% 80% 100%
Desired Personality Traits by Occupation
Conscientiousness Emotional stability Extraversion
Openness to experience Agreeableness

17. More educated people are more likely to have
“better” personality traits
17
Openness Conscientiousness
Source: STEP Household Survey 2011-12.

18. Incentive for higher education?
• Education does not guarantee the
acquisition of reading/writing skills,
• But it may give you a chance to get a good
position.

19. In Vietnam, the labor market rewards
education
0
10
20
30
40
50
No
schooling
Primary
Lowersec
Uppersec
Vocationa
l
College,U
niv
Total
(Thousand VND)
Mean hourly wage rates: Vietnam
Male
Female

20. in Lao, higher education
does not guarantee success,
especially for men
0
5000
10000
15000
20000
25000
No
schooling
Primary
Lowersec
Uppersec
Vocational
College,Uni
v
Total
(kip) Mean hourly wage rates: Lao PDR
Male
Female

21. … and the same for
private sectors.
0
5000
10000
15000
20000
25000
30000
No schooling Primary Lower sec Upper sec Vocational College, Univ Total
(kip)
Mean hourly wage rates:
Lao private only
Male
Female

22. Despite the lower returns,
40% of young women are from vocational schools
14.4 13.1 11.7
6.0
12.0
10.7 11.2
14.9
4.8 10.9
28.6
18.8
24.0
43.0
9.8
9.0
41.3
21.7
34.4
49.2
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Men Women Men Women
Lao Vietnam
Education attainment of wage workers : age 23-28
College, Univ
Vocational
Upper sec
Lower sec
Primary
No schooling

23. Some Findings and Puzzles
• Education system is not functioning well as a provider of literacy skills
– Rural-urban differences are clear in terms of participation and skill levels, this indicates
geographic differences in access to formal education and job opportunities.
– Lao people self-report “higher” skills (literacy) abilities than they actually have.
– People read/write very little, use basic math frequently. Critical finding given that
employers value literacy and specific technical skills highly for skilled workers.
• Higher education does not necessarily guarantee higher wage rates
– Education level remains a key determinant for occupation and provides a clear signal for
LM outcomes and career progression…however, despite improvements in levels, quality
remains low. Laos lags “way” behind other comparator countries.
– Gender differences also persist…women have lower education and skill levels.
• People with higher education have stronger extraversion, openness to
experience, agreeableness, and willingness to take risks...employers need
unskilled workers to master these traits.
• Despite their lower returns, many young wage workers selected to proceed to
vocational schools…why?

24. Thank you
Ximena Del Carpio
xdelcarpio@worldbank.org
+1 (202) 458-1004
And
Yuki Ikeda
yikeda1@worldbank.org
24