Without Quality Education, Latin America May Lose Its Demographic Dividend

Access and Inclusion January 20, 2016

This article is part of a series on innovative solutions to tackle the main challenges of Latin American education (part 5 of 6). 

Developed countries are facing a major demographic challenge. From Europe to Japan, their population growth rates are slowing, impacting everything from the solvency of retirement funds to the pace of economic expansion.
Latin America, on the other hand, is in the midst of what experts have called a “demographic bonus.” In other words, the majority of Latin Americans are still of working age, in the most productive years of their lives. Currently there are some 106 million young people between the ages of 15 to 24 in Latin America and the Caribbean—20 percent of the region’s population. This stands in dramatic comparison with the rapidly aging population in the European Union, for example, where less than 13 percent of the population falls within this age range. 
Many economists believe that a similar demographic advantage drove the rapid growth of the East Asian “tigers” in the second half of the 20th century, leading to high hopes for Latin America. But it remains unclear if Latin America will take advantage.
This is because of the epidemic of young people in the region who are neither employed nor in school or training programs. There are so many of them that they have their own name, the NiNis—those that “Ni estudian, ni trabajan.” There are more than 20 million of them, creating a huge challenge for the region’s emerging economies. They disproportionately use state services and drain their families’ incomes, while damaging their own future career prospects.
In Mexico, for instance, the Organization for Economic Cooperation and Development (OECD) found that over 27 percent of 20 to 24 year-olds, and over 29 percent of 25 to 29 year-olds are NiNis. This means that the sector of the Mexican population best positioned to become part of a newly emerging, highly skilled labor force is largely undereducated and undertrained.
In the words of Monica Tapia Alvarez, of the Mexican nonprofit Synergos, this demographic bonus “risks becoming a liability.” As she says, “It is a generation that represents the possibility of social mobility—or replicating the same cycle of poverty in which they have lived.”
The problem goes beyond Mexico. Nearly one-sixth of the global population is between 15 and 24 years old, as the UNESCO report A Framework for Business Engagement in Education points out. “Confronted with limited investments in quality education,” the report warns, “we face a reality of the largest population in history without the skills, knowledge or attitudes to engage positively in society.”
Those that attend college without finishing are often put in perhaps the most precarious position. As the William T. Grant Foundation notes, “Many youth who took society’s advice to attend college, sacrificing time and often incurring debts, have nothing to show for their efforts in terms of credentials, employment or earning.” These young people are what the foundation calls the “forgotten half.” What they need is quality—but low cost—education that can help them develop real career skills.
Here, technology could help deliver solutions. Some of the most important recent education innovations—like Coursera, the Khan Academy, and Dojo—originate in developed countries but have taken off in emerging economies in Latin America and Asia. They are filling a gap in quality education, and doing it at an affordable price point.
Unfortunately, Latin America’s demographic bonus complicates the already difficult school-to-work transition. While nearly half of students are dropping out before they finish high school, there is a lack of job opportunities even for those who do finish. As Synergos has found, the Mexican economy has created an average of 200,000 jobs annually since 2000—while some 800,000 Mexicans have been entering the workforce each year.
That is why the problem must be tackled from every angle. Traditional high schools need to do a better job of retaining their students, postsecondary options must be diversified and expanded, and better job opportunities must be provided. Princeton University’s Christopher Nielson, co-author of Connecting Student Loans to Labor Market Outcomes: Policy Lessons from Chile, cautions “the demographic bonus is a blessing in terms of more people producing and consuming, but is not positive for economic development if the population is not educated.”
If the demographic bonus is not to become a curse, Latin American countries must make sure it has enough schools, teachers, and educational resources to manage their expanding populations. “We are at a time when we have more young people of school and workinopg age than we’ll ever see in our lives,” says Costa Rican education entrepreneur Pablo Jenkins. “We have to make sure these people are at a high level of human capital and education.”
Read Gabriel Zinny’s article: Three Ways Governments Can Promote Skill Development in Latin America