As WB’s flagship report, we hope to contribute to the following:Contribute to a new vision to guide investment and high-level steering that goes beyond enrolment and graduation rates (especially useful to think about goals beyond MDG 2015) and moves toward people’s mastery of skills
A second reason to focus on HRD, firms are increasingly complaining they cannot find workers with the right skills
Multi-Donor Trust Fund on Labor Markets, Job Creation and Economic Growth: Lao PDR Household Survey 2012
Findings from STEP: LAO PDRHousehold Survey 2012April 29, 2013Ximena Del CarpioSocial Protection and LaborHuman Development Network
2Rationale1. Need for skilled labor, absence of current levels• Growing economy, especially in mining, banking, services.• Firms are facing major problems finding skilled workers, especially inthe services sector (World Bank Enterprise Survey 2009).• Analytical work is a key input to government’s revision of the LaoPDR National Human resource Development Strategy.2. Lao Development Report• WB flagship report, the 2013 Lao Development Report, focusing onhuman resource development.• New data, analysis, options and dialogue will be based on actualfigures.3. Future operation to improve skill matches• Project preparation.
Expected Outcomes from STEP+A clear articulation ofwhat results might looklike in a HumanResource DevelopmentStrategy (and/or 8thNational DevelopmentPlan), with clear andmeasurable goals onskills development.A baseline (“situationanalysis”) on whereLao is today and maybe headingOptions for Action3
The Lao STEP Surveys41. Household 2011/12:1. Urban and Rural (no-Remote) representative2. Sample size is 2849 households and 14,349 people3. 51% female in the household sample, and 60% female for skills modules4. Survey included standard HHS questionnaire, a Skills Module and Cognitive test “EducationTesting Services (ETS)”5. Local data collection firm collected data over a 3 month period through visits individualhouseholds2. Enterprise Survey: Investment Climate + Skills 20121. Six urban labor markets (north, VTE, central and south)2. All sectors of the economy except agriculture3. Sample is 400 firms (5+ employees formal sector)4. Statistically representative5. Local data collection firm interviewed businesses over a four month period
Few people have high education levels, and evenfewer in rural areasOnly 20% of rural womenproceed to secondaryeducation compared to51% in urban areas.Source: STEP Household Survey 2011-12.4 712291016262420263026212315147461111131597114 10%10%20%30%40%50%60%70%80%90%100%Male Female Male FemaleUrban Urban Rural RuralUniversity or postgraduateUpper sec and vocationalUpper secondaryPrim or lower sec, and vocationalLower secondaryPrimaryPrimary, incompleteNo schooling
Lao workers in semi-or-low-skilled occupations havelow basic education levels…60% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%ManagersProfessionalsTechnicians and associate professionalsClerical support workersService and sales workersSkilled agricultural, forestry and fishery workersCraft and related tradesPlant and machine operators and assemblersElementary occupationsTotalTypeATypeBTotalPrimary or lower Lower secondary Upper secondary Diploma Bachelor Master & higher
Focus on urban population of the age 25 –44• Age 25: Born in 1987Finished education• Age 44: Born in 1968Age 7 in 1975• 44% of the working age population
Employers report literacy, numeracy andtechnical skills as the most desired “hard” skills80% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Mgt/Prof/TechnicalClerical/Service/SaleSkilled Agri/CraftsOperator/ElementaryDesired Job-Related Skills by OccupationLiteracy Specific technical skills NumeracyCommunication skills Leadership Creative and critical thinkingTeam work Foreign Language Problem solvingTime management Independent
LiteracyPeople in Lao read but much less than inVietnam8.4 12.177.432.412.325.929.60%10%20%30%40%50%60%70%80%90%100%Lao VietnamReading intensity in the past 12 months:Lao and VietnamHighMediumLowNone
… not only because of lower educationalattainment42.814.447.923.49.262.20%10%20%30%40%50%60%70%80%90%100%Lao VietnamReading intensity of university graduates:Lao and VietnamHighMediumLow
Even students currently studying atuniversitiesdon’t read much58.79.537.012.64.276.10%10%20%30%40%50%60%70%80%90%100%Lao VietnamReading intensity of university students:Lao and VietnamHighMediumLow
The literacy exercise module confirms thefindingVietnam: Score distribution by education
With post secondary education, only 30% gotall answers rightLao: Score distribution by education
Half of high-skilled workers are satisfied withtheir literacy skills51.264.848.835.30%10%20%30%40%50%60%70%80%90%100%Lao VietnamHas a lack of skills kept you from getting a job or apromotion?NoYes
Conscientiousness is a highly desired “soft” skillby employers160% 20% 40% 60% 80% 100%Desired Personality Traits by OccupationConscientiousness Emotional stability ExtraversionOpenness to experience Agreeableness
More educated people are more likely to have“better” personality traits17Openness ConscientiousnessSource: STEP Household Survey 2011-12.
Incentive for higher education?• Education does not guarantee theacquisition of reading/writing skills,• But it may give you a chance to get a goodposition.
In Vietnam, the labor market rewardseducation01020304050NoschoolingPrimaryLowersecUppersecVocationalCollege,UnivTotal(Thousand VND)Mean hourly wage rates: VietnamMaleFemale
in Lao, higher educationdoes not guarantee success,especially for men0500010000150002000025000NoschoolingPrimaryLowersecUppersecVocationalCollege,UnivTotal(kip) Mean hourly wage rates: Lao PDRMaleFemale
… and the same forprivate sectors.050001000015000200002500030000No schooling Primary Lower sec Upper sec Vocational College, Univ Total(kip)Mean hourly wage rates:Lao private onlyMaleFemale
Despite the lower returns,40% of young women are from vocational schools14.4 13.1 11.76.012.010.7 188.8.131.52 10.928.618.824.043.09.89.041.321.734.449.20%10%20%30%40%50%60%70%80%90%100%Men Women Men WomenLao VietnamEducation attainment of wage workers : age 23-28College, UnivVocationalUpper secLower secPrimaryNo schooling
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 indicatesgeographic 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 thatemployers 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 forLM outcomes and career progression…however, despite improvements in levels, qualityremains 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 toexperience, agreeableness, and willingness to take risks...employers needunskilled workers to master these traits.• Despite their lower returns, many young wage workers selected to proceed tovocational schools…why?
Thank youXimena Del Carpioxdelcarpio@worldbank.org+1 (202) 458-1004AndYuki Ikedayikeda1@worldbank.org24