Rapid demographic change creates an imperative for countries

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Rapid demographic change creates an imperative for countries to better harness their human capital.

Rapid demographic change creates an imperative for countries to better harness their human capital. • Labor productivity in many LAC countries has languished for years during which growth was supported by favorable ‘tailwinds’. • Countries now faces powerful demographic ‘headwinds’ on growth. • Populations in many LICs and MICs are ‘ageing’ at an unprecedented pace. • The demographic ‘window of opportunity’ to productively engage young people is closing. • In Brazil, the ‘working age’ population will peak in 5 years.

Education systems are falling short of expectations: Poor performance, repetition and dropouts. Repetition rates

Education systems are falling short of expectations: Poor performance, repetition and dropouts. Repetition rates (lower secondary education) 1 Structural Peers 1, 8 BRICS 2, 8 OECD 5, 9 Regional Peers 16 Brazil 0, 0 5, 0 10, 0 Drop out rates 15, 0 3, 1 BRICS 4, 1 OECD 13 Structural Peers 14 Regional Peers 25 Brazil Source: WBG Brazil Expenditure Review, Education chapter 0, 0 5, 0 10, 0 15, 0 20, 0 25, 0 30, 0

Younger people are more likely to withdraw from the labor force, particularly the lower

Younger people are more likely to withdraw from the labor force, particularly the lower skilled Change in Labor Force Participation (LFP) in Brazil - 2015 -2003 (p. p. ) Female 65 and older 25 to 54 d ille d Sk ille d sk ille Lo w sk d 55 to 64 Un ille d Sk ille d sk ille Lo w sk Un ille d d Sk ille d sk ille Lo w sk d 19 to 24 Un ille d Sk ille d sk ille Lo w sk d 15 to 18 Un ille d Sk ille d Lo w sk ille d sk Un ille d Sk ille d sk ille Lo w sk d 55 to 64 Un ille d Sk ille d sk ille Lo w sk d 25 to 54 Un ille d Sk ille d sk ille Lo w sk d 19 to 24 Un ille d Sk ille d sk ille Lo w sk d 15 to 18 Un ille d Sk ille sk ille w Lo Un sk -0, 01 d 0, 04 65 and older Male -0, 06 -0, 11 -0, 16 Source: BR Skills and Jobs 2, using PNAD surveys

Policy makers have to look beyond reform of labor market regulation for solutions. •

Policy makers have to look beyond reform of labor market regulation for solutions. • Correlation between dejure ‘rigidity and youth unemployment is weak • More ‘active’ policies and programs have shown favorable results • Intermediation, counseling and coaching are more cost effective than skills training.