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In the aftermath of the pandemic in Latin America and the Caribbean (LAC), skills have become more crucial than ever. Not only has the pandemic economically affected LAC more than other regions, it has also affected unskilled individuals (without post-secondary training) the most. Many jobs have been destroyed, yet many others ¨C related, for instance, to automation, electronic platforms and data analysis ¨C have been created. The economy clearly needs skills and needs them fast. Is higher education up to the task?

In LAC, higher education has expanded dramatically in the new millennium, yet a full one-third of the region¡¯s employers, the highest fraction in the world, struggle to find qualified workers. Why the disconnect? Perhaps because the region basically provides one kind of higher education: bachelor¡¯s programmes, attracting 90 per cent of all higher education students relative to 76 per cent worldwide. But it does not produce enough graduates in technology, science, and engineering; and less than half of higher education students graduate.

According to a new World Bank study, The Fast Track to New Skills, a bright spot emerges in this landscape: short-cycle higher education programmes (SCPs). Also known as technical, technological or short programmes, SCPs last two or three years and have a strong occupational focus. They are attractive to many students, not only those without the interest, time or academic preparation for a longer programme, but also those seeking new competencies even after a bachelor¡¯s degree. Nonetheless, SCPs only capture 10 per cent of all higher education students in LAC. Their stigma might be partly to blame for this: they are viewed as second-class programmes and an academic dead end, yielding credentials of little market value.

Much of the stigma, however, is unjustified. Despite attracting more disadvantaged, less traditional students than bachelor¡¯s programmes, SCPs have higher graduation rates. SCP graduates obtain more formal employment and higher salaries than high-school graduates ¨C as expected ¨C but also more than bachelor¡¯s dropouts, who comprise a staggering half of all higher education students. Not all SCPs are equally good, but neither are all bachelor¡¯s programmes. As a result, some SCPs, particularly in engineering, science and technology, have higher returns than many bachelor¡¯s programmes, especially those in social sciences and humanities. Thanks to their close connection with the local economy, SCPs respond nimbly to local labour market demands, opening or closing programmes and updating curricula as needed by local employers. This feature is critical at this time of fast and frequent technological changes.

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Should all SCPs therefore be expanded? No. Only good SCPs (those that help students find good jobs adjusting for their background) should be created, expanded or replicated. To identify the distinctive features of good SCPs, for our study we interviewed more than 2,000 programme directors in LAC and gathered information on their practices and student outcomes. We learned that the best programmes apply deliberate, intentional practices. They first learn the needs of local companies, then structure every programme aspect (such as curriculum, training and faculty) to produce the desired graduates. Furthermore, the best programmes cultivate strong private sector connections, assist students in searching for jobs, provide adequate infrastructure for practical training, hire faculty with field experience, teach numerical competencies and monitor graduates¡¯ employment.

The urgent task, then, is to build a system where many programmes like those are offered and in which students have the interest and means to pursue them. This system will only emerge through urgent and deliberate policy action on four fronts. The first is information, as students need detailed information on every higher education programme in the country (bachelor¡¯s and SCP), regarding labour market outcomes, costs and academic requirements in order to make informed choices.

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The second policy area is funding. In LAC, governments subsidise bachelor¡¯s students at higher rates than SCP students, provide little or no financial aid to those in private institutions (about half of the region¡¯s SCP enrolment), and fund programmes and fields regardless of performance or strategic importance. Reassigning public funding among programmes, students and fields is critical.

The third policy area is regulation: overseeing and regulating programmes with an emphasis on student labour market outcomes rather than programme inputs, and through agile systems that do not stifle SCPs¡¯ dynamism. The fourth area is lifelong learning: facilitating skill acquisition in modules and the transition from SCPs to bachelor¡¯s programmes.

At this critical juncture, one can hardly imagine a better policy to promote employment and inclusion than building a good SCP system. Now is the time for SCPs. If not now, when?

Mar¨ªa Marta Ferreyra is a senior economist at the Office of the Chief Economist for Latin America and the Caribbean, The World Bank.

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