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Short-Cycle Programmes can Help Boost Employment and Economic Recovery in Latin America and the Caribbean

Short-cycle higher education programs (SPCs), such as technical degrees, tertiary careers and advanced vocational training programmes, can be a highly effective tool in times of crisis such as the current COVID-19 pandemic, when millions of people across Latin America and the Caribbean need to acquire the training and skills to urgently join the formal job market, according to a new World Bank report.

The pandemic hit the region severely, causing an unprecedented economic downturn and a sharp drop in employment and production at a time of important transformations in the world of work. In this context, SCPs, which are usually two or three-year programmes oriented to the labour market, could help boost employment by offering a path to relatively quick and well-paid job opportunities, according to the report “The Fast Track to New Skills, Short-Cycle Higher Education Programs in Latin America and the Caribbean”.

Countries in the region should promote the expansion and quality of these programs in order to benefit a greater number of people and generate rapidly the human capital necessary for economic recovery and growth.

“The COVID-19 pandemic has unleashed an unprecedented crisis in Latin America and the Caribbean, pushing millions into poverty. Short-Cycle Higher Education Programs can play an important role in the recovery by helping overcome the employment crisis and preparing individuals for today’s world of work,” said Carlos Felipe Jaramillo, vice president of the World Bank for the Latin American and Caribbean region. “In this context, countries across the region need to promote the transformative potential of SCPs.”

According to the report, the salary benefits of technical level careers are clear. For example, short programs graduates generally earn -as expected- lower salaries than bachelor’s programs graduates, but on the regional average the former earn 25 percent more than the large percentage (54 percent) of dropouts from bachelor’s programs, considering student characteristics. The difference ranges from a low of -4 percent in Peru, 8 percent in Argentina, 22 percent in Ecuador and 42 percent in Paraguay to maximums of 58 percent in Bolivia and 74 percent in El Salvador.

Similarly, on the regional average SCP graduates earn 60 percent more than high school graduates with no higher education. In this case the salary difference ranges from lows of 32 percent in Peru and 36 percent in Costa Rica, to 44 percent in Mexico, 48 percent in Chile, and maximums of 100 percent in Bolivia and 110 percent in El Salvador.

SCP graduates also fare well in terms of employment. Not only do they outperform high school graduates; they also outperform dropouts from bachelor’s programs. Relative to the latter, they have a lower unemployment rate (3.8 versus 6.1 percent), and a higher formal employment rate (82 versus 67 percent). Particularly in the current context of unemployment and informality, these are important results.

The report also shows that SCP students graduate at a higher rate than bachelor’s students (57 versus 46 percent), which is especially relevant given that bachelor’s dropouts account for about half of all the individuals that start higher education in LAC and that, on average, SCP students come from more disadvantaged backgrounds than students from bachelor’s programs.

“Short-cycle higher education programs have significant strengths, including an ability to respond fast and flexibly to labour market needs. They also benefit from a fluid relationship with local businesses and often assist students in their job searches,” said María Marta Ferreyra, a senior economist at the World Bank and one of the authors of the report.

However, the offer of short programs in Latin America and the Caribbean is not yet as well developed as in other regions and the quality of their offer is uneven. In the last two decades, enrolment rate in higher education in LAC grew from 23 to 52 percent, but the greatest increase occurred in bachelor’s degrees. As a result, currently the share of SCP students in higher education enrolment is only 9 percent, lower than in most other regions (34 percent in East Asia and Pacific countries, 30 percent in North America, 21 percent in Sub-Saharan Africa, 18 percent in Europe and Central Asia). And while some programs offer excellent labour market outcomes, others do not.

In order to increase the number of short programs and improve the quality of their educational offer, it will be crucial to implement the appropriate policies. This will allow short higher education programs to reach their full potential. Examples of these policies are providing and disseminating information on outcomes, costs and returns for all programs; correcting funding inequities among students and program types; holding programs accountable based on student outcomes; and facilitating the accumulation of credentials and flexible academic pathways.

According to the report, with the right policies, institutions can offer better programs, students can make more informed career decisions, and individual, businesses and economic needs can be met.

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