The coordination of skill supply and demand in the market model of skill formation: testing the assumptions for the case of Chile

Oscar Valiente,Adrián Zancajo,Judith Jacovkis

doi:10.1080/02601370.2019.1678692

Oscar Valiente, Adrián Zancajo + Show 1 more

Open Access

https://doi.org/10.1080/02601370.2019.1678692

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Abstract

ABSTRACT The importance of skill formation for young people and the challenges of youth unemployment and underemployment are at the forefront of global development agendas. However, there is still an open debate about the most adequate policy frameworks to tackle these societal challenges and, particularly, about the role that the state and the market should play in the coordination of skills supply and demand. Taking Chile as a case study, the paper analyses how the market model of skill formation is re-contextualised by practitioners and other stakeholders at the local level. Through a realist evaluation approach, the paper tests to what extent the underlying theoretical assumptions of the market model hold up when confronted with the reality of the contexts in which young people, education providers and employers make decisions. The case of Chile is particularly interesting for the comparative literature because of its extreme neoliberal orientation and the centrality of the market in the allocation of resources and opportunities among different social groups. The findings show the limitations of the market for coordinating the supply and demand of skills and its negative consequences on the educational and work prospects of young people, especially the most disadvantaged..

Highlights

The importance of skill formation for young people and the challenges of youth unemployment and underemployment are at the forefront of global development agendas (ILO/OECD, 2014; OECD, 2017a; World Bank, 2013)
Through a realist evaluation approach, the paper tests to what extent the underlying theoretical assumptions of the market model hold up when confronted with the reality of the contexts in which young people, education providers and employers make decisions
The re-contextualisation of the market model of skill formation by practitioners and other stakeholders at the local level, the paper is able to test to what extent the underlying theoretical assumptions of the market model hold up when confronted with the reality of the contexts in which young people, education providers and employers make decisions

Summary

Introduction

The importance of skill formation for young people and the challenges of youth unemployment and underemployment are at the forefront of global development agendas (ILO/OECD, 2014; OECD, 2017a; World Bank, 2013). On the supply side of skills formation, the assumption of the market model is that educational providers will try to attract demand by aligning their offer to the skill requirements of the economy, making their degrees more valuable and a better investment opportunity for students, expecting that instrumental rationality guides their choices. The quote highlights the lack of collaboration between educational providers and companies, which, according to many of the interviewees, is characteristic of the market model of skill formation in Chile In this sense, the majority of educational providers interviewed agreed that greater involvement of employers in the training of young people would facilitate coordination with local companies and graduates’ access to local job opportunities. The discouraging effect of the unregulated labour market on TVET students is fuelling the demand for higher education but, at the same time, is forcing large segments of young people into precarious work trajectories, widening social inequalities among this population

Conclusions

Notes on contributors

Findings

Santiago de Chile