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Skills have the potential to transform lives and drive economies. Having a skilled workforce can contribute to better outcomes at the individual level as well as for firms and the country as a whole. Higher-skilled individuals are more likely to be employed and earn higher wages. Firms need high-level skills to innovate, grow and move up value chain. Countries benefit from a more skilled workforce through higher productivity and GDP growth.
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The Chilean economy is gradually recovering from a period of slow growth due to sharply lower commodity prices. Economic growth is expected to strengthen to 2.8% in 2018 thanks to improved external demand and investment. As a result, the unemployment rate is projected to stabilise and wage growth to pick up. The overall unemployment rate remains close to the OECD average (6.5% in Chile v. 6.3%). Yet, participation in the labour market is five percentage points below the OECD average, with very marked differences for women (8 percentage points below average) and youth (12 percentage points below average). This is reflected in relatively low employment rates for these sub‑groups. While participation of the low-educated to the labour market is high in international comparison, the quality of jobs is frequently poor: informality is common and Chile has the highest share of temporary workers in the OECD.
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Skills can have a major impact in people’s life opportunities. Proficiency in information processing skills is positively associated with labour market outcomes: on average, adults with higher skills proficiency tend to earn more and have better employment prospects. This chapter examines the proficiency of the Chilean population in literacy, numeracy and problem-solving in a technological‑rich environment; disentangles the relationship between proficiency and labour market outcomes in Chile; and sheds light on differences between sociodemographic groups.
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Having a large pool of highly proficient workers does not guarantee that their skills are optimally used in the workplace. The extent to which skills are used at work matters for individuals and for countries and poor skills use can lead to job mismatch – the misalignment between workers’ qualifications and skills and those required by their job. This chapter describes the use of skills at work in Chile, the determinants of this use, the level of skills mismatch, and why it matters.
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This chapter sheds further light on difference between socio-demographic groups. It looks at the role played by skills inequality in explaining wage differentials by gender and age. It looks at the how the relationship between wages and proficiency, field of study, experience and educational attainment varies along the life-cycle. It sheds light on the relationship between skills and NEET status.
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