So You Have Graduated.... Be a Cleaning Lady

Back in high school, I remember spending one night with Lena, my family’s Filipino domestic helper, and watching a movie starred by Matt Damon. About half an hour into the movie, Lena exclaimed, “I remember this story! It is in your book!”

With a puzzled face, I replied, “Which book?”

She immediately ran to the shelf and pulled out John Grisham’s THE CHAMBER. She has recently finished the book. I felt so ashamed of myself, for although I bought shelves full of books, I have not found the determination and energy to read all of them. While I was lazing around, though, Lena has probably read all the books and remembered well the details of my English fiction and non-fiction books.

What surprised me in that encounter was her ability to read and understand sophisticated English. No one would expect a domestic helper who does household chores to have excellent language abilities. Upon further inquiry, she revealed that she has already completed a university degree in the Philippines. From her demonstrated English skills, I assumed that her degree was of decent quality. But why are her skills so underused?

In many developing countries in Southeast Asia, there is a misalignment between developments in the education and the industrial sectors. Consider three scenarios. In some countries, education reforms can be so successful that more and more young people completes beyond basic education and pursue tertiary degrees. Most of these students acquire general/soft skills in business and financial management, language proficiency, information technology skills, etc. These skills would be valuable in a fully urbanized and industrialized society; but in countries where agriculture remains a sizable economic sector and the industrial base is narrow, these graduates would not be able to find jobs commensurate with their skills.

In other countries, both the education and industrial sectors may be growing rapidly. However, there is little coordination between universities and vocational training institutions. In effect, training efforts may be duplicated, leading to oversupply of certain skills and a dearth other needed skills. Also, since training institutions rarely interact with private sector employers, the industry-specific skills trainees obtained may be outdated or too shallow. In the end, employers would have to waste resources re-training their new employees again.

In the third group of countries, industrial development occurs at a faster rate than education reforms. There would be an influx of unskilled workers into the workforce but they lack the qualifications to land in a decent job. At the same time, training institutions lack the human resource and infrastructural capacities to deliver high quality training. In some cases, training institutions may be established but under-utilized because few resources have been invested in publicity and outreach.

In all three cases, different forms of misaligned educational and industrial developments lead to mismatch of skills. For some countries, workers respond to this mismatch through migration. The Philippines would serve as an example where, on the one hand, many educated women would choose to work as domestic helpers overseas. On the other hand, many professionally trained Filipinos would migrate to other Southeast Asian countries, the European Union or the USA to be teachers, nurses and doctors. For other countries with handicapped education systems and a vast pool of unskilled labour, youth unemployment rate maybe very high. Idle youth can represent forgone economic productivity and also contribute to social problems, such as violence and drug abuse.

There are two additional key issues related to tackling employment creation and skills mismatch. First, the informal economy, which includes mobile food stalls, small roadside shops and motorbike repair stations, represents a large (and growing) proportion of economic activities in developing countries. Most “workers” in the informal economy are sole proprietors or “own-account workers” with small and unstable income. Since their work requires low levels of skills, there is little incentive to obtain training. As many development economists have suggested, one solution to limited wage employment in the formal sector is to “formalize the informal sector.” Take the example of newspaper sellers on the roadside. Instead of having many small independent street vendors, there can be a large newspaper distribution company that hires these vendors (and they can wear a uniform, etc.). As formal employees, their welfare, wages and work conditions can be better monitored. With clearer job descriptions as formal sector employees, then employers, workers and training institutions can better pinpoint the areas of training needed.

The second issue related to the quality of education and training necessary to facilitate decent employment. More precisely, some mechanisms for obtaining professional certifications and qualifications, either through exams or coursework, would be needed. In many developed countries and some developing countries, there is a complex National Qualifications Framework, which specifies the various levels of skills in particular professions. The process of developing the framework can take years, but such accreditation and certification procedure would be crucial for making training courses widely recognized by employers. With clear guidelines for training, vocational training institutions nationwide can standardize their curriculum and employers can also predict the level of skills their new employees possess.

All in all, this brief article puts on the table several key issues to industrial development that must be discussed in detail in the future. The skills mismatch that propelled the migration of Filipinos is not an isolated case. This mismatch is indicative of the uneven pace of industrial growth and education reform. Its solution requires such multi-faceted and coordinated policies as “formalization” and skills standards formulation.

References
Cristina Martinez-Fernandez and Marcus Powell, "Employment and Skills Strategies in Southeast Asia: Setting the Scene," OECD LEED Programme, July 2009.