Education and training initiatives aim to boost formal employment for young people

Between March and May 2014, young people between the ages of 14 and 28 accounted for 32.5% of the working age population, according to the National Department of Statistics (Departamento Administrativo Nacional de Estadística, DANE.) In total, Colombia has about 11.9m young people.

Yet factors such as informality, a significant mismatch between educational curricula and the demands of the labour market, and insufficient technical preparation act as barriers to the professional progress of many youth.

DANE statistics show that young people account for 29.1% of the workforce, and that this is equivalent to 57.4% of the total youth population. The youth unemployment rate (those seeking work but unable to find it) is 15.9%, although this is at 20.3% among women and only 12.6% for men.

These unemployment figures place Colombia among the countries with the highest youth jobless figures in Latin America. A report by the International Labour Organisation (ILO) titled “Global Employment Trends 2013”, put Colombia among the countries with highest levels of youth unemployment in the region. However, Colombia is still better off than Uruguay and Argentina, which suffer from more than 20% youth unemployment. Mexico has the lowest rate of unemployment among young people in the region, at 9.5%, followed by Panama (12%).

Informal Work

In addition to the high levels of youth unemployment, the ILO report said that Colombia had the third-highest level of “vulnerable young employment” in the region. The ILO defines vulnerable as “self-employed and unpaid family workers” and indicates that 48.6% of Colombia’s young workers are in this situation. Similarly, Colombia ranks very poorly in terms of the health insurance and pension benefits for youth, with only 52.5% covered by health insurance. The ILO and DANE figures are a reflection of the high degree of informality in the country, which is one of the most serious problems the economy faces. Informality not only affects economic development, but also stokes high levels of poverty and social inequality. Raising the level of inclusion for young people by offering more formal jobs is a major goal of the government. To achieve this, it is necessary to increase educational opportunities, particularly in vocational training, as the Colombian market demands more professionals, who have been better trained, in shorter periods of time, given the urgent need for skilled labour.

DANE figures for the March-May 2014 period show that the rate of informality for all ages in Colombia was 48.5%. This represents a 1 percentage point decrease compared to the 49.5% of the same quarter in 2013. Informality is a particular concern in some metropolitan areas such as Cucuta (70.6%), Monteria (61.6%) and Pasto (61.5%). At 43.5%, Bogota is the city with the lowest level of informality.

More Opportunities

The country is engaged in many programmes to reduce informality levels, including a very strong campaign to promote financial inclusion (see Banking chapter). However, high taxes on wages are a deterrent to a faster transition to formalisation. To establish a long-term solution to youth unemployment, Colombia will need to pursue strategies within the fields of education (from basic to tertiary education, as well as vocational training) and banking, with more funding dedicated to entrepreneurship. For former president Álvaro Uribe Vélez, the key to creating youth employment is the establishment of public-private partnerships (PPPs). “We need the state and the individual to form an alliance," he said at a recent forum.

Law 1508 of 2012 designed PPPs exclusively for creating joint investments for the development of infrastructure, Uribe suggested this model could be applied to boost education and entrepreneurship projects. Today there is a strong vocational training system, which has developed over the years. The vocational training institution, the National Service for Learning (Servicio Nacional de Aprendizaje, SENA), is making a substantial effort to increase the availability of technical training. In July 2014, SENA announced that it was offering 15,000 new placements for technological studies. SENA increased its budget by 19.6% in 2014 to COP2.7trn ($1.35bn).

Vocational Training

Colombia suffers a relatively common problem affecting many emerging countries: it has a major deficit of workers with advanced technical skills, an impediment that SENA aims to overcome with its diverse education programmes. However, most Colombians who join higher education programmes prefer university certifications rather than other designations. The shortage of technicians threatens to limit the development of many industries, which are already struggling to implement new processes and technologies in order to become more competitive globally.

The demand for technical studies is very low considering the growing market need for these profiles. A study by the Labour Observatory for Education noted that between 2001 and 2010, 61% of university graduates in Colombia obtained college degrees, while only 17% of students enrolled in technical studies completed their courses.

Furthermore, the country is currently facing a shortage of offered courses. In 2006 technical programmes represented only 4.61% of the total educational offerings in Colombia, with this rising to 17.4% for post-secondary education.

A increase in the number of technical careers appears to be essential for Colombia to employ its young population in a formal, productive way, particularly in areas of special development such as information and communications technology (ICT). A recent study from ICT multinational Cisco revealed that Colombia has the third-highest demand for ICT professionals in the region, after Brazil and Mexico. The report estimated that the country will need a total of 12,403 trained workers in this area by 2015.

The Ministry of National Education (Ministerio de Educación Nacional, MEN) recognises the need to increase the number of technically trained workers to meet the needs of ICT and other fields like finance, medicine and transportation. Manufacturing also aims to find workers with specific profiles and knowledge of technical standards. The services sector is emerging, meanwhile, eager for bilingual workers.

Responding to this need, the national government increased the budget of SENA to an historic high of COP2.7trn ($1.35bn). In mid-May 2014, the service offered 88,797 new placements nationwide, of which 20,497 were in the capital, Bogotá.

In line with the efforts made by SENA to align its programmes with the needs of the market, the institution has incorporated new training plans in financial services and administration, as well as in other specialised profiles such as ICT development, logistic operations, manufacturing, mechanic machinery, carpentry, design and multimedia, and nursing. The technology field offers training for a variety of different careers including in videogame development, graphic development, footwear engineering and fashion design, among others.

Down To Work

According to a recent study from the MEN, 80% of graduates from higher education institutions got their first job in the three months after graduating. Since the Law of Formalisation and Generation of Employment, better known as the Law of First Employment (Law 1429), was enacted in 2010, the government has hoped to formalise a significant number of jobs while creating new employment. However, the data from the National Customs Agency was blunt: from the 237,147 companies that were created in 2011, only 2.7% met the parameters to access to the formalisation and employment benefits offered by the new law.

Miguel Largacha Martínez, president of Porvenir, the largest pension fund in the country, told OBG, “Law 1429, together with the current tax reform, have had very positive effects by easing the payroll’s structure.” According to Largacha, while there are other positive developments to note, including the periodical economic benefits, which allow people in the informal sector to access pensions through a state subsidy, there is much work that remains to be done. “Colombia still needs to cope with high levels of informality,” Largacha added.

Long Term

While in the short term Colombia has acknowledged that it must rapidly increase its availability of technologically skilled workers, the education sector will need a structural change to ensure a promising future for young people. The country will need all types of skilled professionals, from technicians to company management. While recognising that the government has recently attempted to offer alternatives that can promote the formalisation of youth workers, as well as the creation of new jobs, these efforts have so far proved insufficient and need to be supported through a rise in the allocation of budget, together with long-term measures.