MINISTRY OF LABOR AND EMPLOYMENT PROMOTION - PERU APEC FORUM ON HUMAN RESOURCES DEVELOPMENT 2011 - JAPAN ECONOMY REPORT: Measures to promote the development of vocational skills of the youth as the socially vulnerable Eco.MirianCórdova Advisor to the Minister of Labor and Employment Promotion 1
Content I. CURRENT STATUS OF YOUTH WHO HAVE DIFFICULTIES TO GET A DECENT JOB 3 II. FACTORS THAT PREVENT YOUTH FROM GETTING OUT OF POVERTY 6 III. DEVELOPMENT MEASURES THAT ARE BEING IMPLEMENTED TO HELP YOUTH WHO DO NOT HAVE ACCESS TO A DECENT JOB AND COULD SERVE AS A REFERENCE FOR OTHER COUNTRIES 10 3.1 Measures developed by organizations prior to Program 10 3.2 Implementation Plan. 13 2
INFORMATION PRESENTED AT APEC FORUM. JAPAN 2011 I. CURRENT STATUS OF YOUTH WHO HAVE DIFFFICULTIES TO GET A DECENT WORK According to the results of the First National Youth Survey (ENAJUV 2011), the number of young people between the ages of 15 to 29, up to 2011, is 8 171,356, representing 27.5% of the total population in the country 1. The distribution of the young population per Department is shown on Table 1. Table 1 - Peru: Young Population between ages 15 to 29 (per department) 2011 DEPARTMENT NUMBER OF YOUNG PEOPLE PERCENTAGE Lima 2,510,636 30.72 Piura 557,408 6.82 Arequipa 475,855 5.82 La Libertad 380,172 4.65 Junín 379,930 4.65 Cajamarca 368,727 4.51 Puno 344,179 4.21 Cusco 303,770 3.72 Lambayeque 300,768 3.68 Loreto 295,705 3.62 Callao 281,091 3.44 Ancash 257,902 3.16 Ica 225,034 2.75 Huánuco 208,502 2.55 San Martin 201,146 2.46 Ayacucho 195,641 2.39 Ucayali 189,875 2.32 Huancavelica 135,066 1.65 Pasco 125,460 1.54 Tacna 98,953 1.21 Apurímac 85,702 1.05 Amazonas 76,959 0.94 Moquegua 75,539 0.92 Madre de Dios 51,006 0.62 Tumbes 46,329 0.57 Total 8,171,356 100 Note: Preliminary figures. Source: INEI National Youth Survey, 2011 Elaboration: MTPE Technical Operational Unit Youth at work program. 1 The Statistics and Computer Institute estimates that the Peruvian population this year will come up to 29 797,694. 3
In this universe, approximately 70% of the young population does not have any technical or professional studies, which has an impact on their income level and their potential to invest on their personal development, as it is represented on Figure 1. Figure 1. - Peru: Distribution of youth who are able to work vs. reached educational level Secundaria completa e incompleta, 59.3% Sin nivel/ Educación inicial/ Primaria, 10.5% Superior no universitaria completa e incompleta, 14.6% Superior universitaria completa e incompleta, 15.6% Note: Preliminary figures. Source: INEI National Youth Survey, 2011 Elaboration: MTPE Technical Operational Unit Youth at work program. On the other hand, With regard to the education achieved by young people in rural areas, 43% of youth aged 16 to 29 have reached the level of primary education and 45% high school, only 2.9% have completed college level either non-university or university studies. 4
Figure 2 Level of studies reached by Young people aged 16 to 29 in rural areas 50.00 45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 Educación Inicial Primaria Secundaria Sin Nivel Superior No Univ. completa Superior No Univ. incompleta Superior Univ. completa Superior Univ. incompleta Source: National Population and Housing Census, 2007 (INEI) Below is represented the evolution of the young population between 15 to 29 years old according to the activity conditions for the period 2007-2010. It is important to highlight that in 2010 the young population legally able to work raised to 7.7 million of which 5.2 million participate in the work market either holding a job or actively seeking for one. Likewise, 92% of the EAP is part of the employed EAP while 8% is part of the unemployed EAP, which means that 410, 533 young people are currently unemployed. Peru: Young population aged 15 to 29, according to the activity conditions 2007 2010 Activity conditions 2007 2008 2009 2010 Working-age population 7,648,941 7,792,925 7,849,329 7,771,632 Economically active population 5,161,608 5,285,659 5,284,123 5,206,238 Employed EAP 4,727,730 4,848,719 4,876,552 4,795,705 Unemployed EAP 433,878 436,940 407,571 410,533 Inactive 2,487,333 2,507,266 2,565,205 2,565,394 Among the employed EAP, it is observed that in 2009, 54.7% was under-employed, while 37.5% was adequately employed. In the period 2002-2009, 62% of the population was unemployed, while 29.7 had a suitable job. 5
Table Economically Active Population aged 15 to 29 According to employment rates 2002-2009 (%) Employment rates 2002 2003 2004 2005 2006 2007 2008 2009 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Employed EAP 91.5 91.9 91.2 91.0 92.1 91.6 91.7 92.3 Adequately employed 25.1 25.6 25.9 26.1 29.3 31.9 35.7 37.5 Under employed 66.4 66.3 65.3 64.8 62.8 59.6 56.0 54.7 Per hours (visible) 9.2 9.4 8.1 7.9 8.6 9.7 8.9 8.8 Per income (invisible) 57.2 56.9 57.2 56.9 54.2 49.9 47.1 45.9 Unemployed EAP 8.5 8.1 8.8 9.0 7.9 8.4 8.3 7.7 Source: Youth and International migration in Peru (INEI 2011) II. Factors that prevent youth from getting out of poverty One of the main factors that prevent youth from getting out of poverty is that they do not have Access to the labor market. Participation of the youth in the labor market cannot be evaluated just by looking at the unemployment rate (OIT 2006), but also the following aspects should be considered: Factors that have an influence on the creation of new jobs (extended demand and economic growth). Public policies, Legislation and Rules. Factors that deal with employment (organizations that promote education and development, work experience, and services of the labor market). The factors that indirectly cause that young people with little economic resources and/or socially vulnerable have difficulties for accessing the job market and improve their income are, among others: Limited offer of work training in areas of poverty and/or vulnerability Low income to afford paying for studies or training. Limited offer of training aligned with the needs of the labor market. Young people are engaged in jobs that have very little impact on their development. 6
Concerning the first indirect factor, according to the research Decent work and youth in Latin America (OIT 2010), youth from rural areas in Latin America have less possibilities for accessing college education and training activities for qualified jobs than those from urban areas, which consequently has an impact on the inclusion in the work market. Likewise, in the report Marginalized in Mexico, El Salvador, Nicaragua y Panamá (CEPAL 2001), it is stated that the current labor market demands a solid basic preparation and specific skills. However, because of the quality of education that is offered and the difficulties for accessing to it, there is an unbalance between the work demand and the qualification that is offered. Young people who seek to incorporate in the labor market find themselves with not sufficient qualification and few opportunities to engage in training and/or studies. This situation is more evident in the case of young people who have dropped school or training, increasing the differences between youth in urban and rural areas. According to the Technical Report: Evolution of Poverty by 2009 (INEI 2010), one of the characteristics of the population in situation of poverty is that it has less educational capital tan the not poor population, as can be observed in the following chart: Chart Levels of education according to poverty status Source INEI (2010) With regards to the second indirect factor, according to the Youth national Survey (INEI 2011), the option to train through a higher education is even more distant for young people from poor households who have to postpone training either for not having sufficient financial resources, being the financial support to their parents, covering their expenses, helping with home care, among others. 7
Chart Peru: Factors that prevent youth from attending an institution for quality training, 2011 Problemas económicos 37.7 Por trabajo 24.8 Otra razon Asiste a la academia pre-universitaria Se dedica a los quehaceres del hogar Está conforme con lo que estudió Por embarazo Problemas familiares No le interesa/no le gusta el estudio NE 6.6 6.4 6.0 5.4 3.9 3.2 2.3 1.6 0 5 10 15 20 25 30 35 40 Note: Preliminary figures. Source: INEI National Youth Survey, 2011 Elaboration: MTPE Technical Operational Unit Youth at work program. Likewise, according to the Evaluation of the main processes of the Youth program of training - PROYOUTH developed by ESAN University in 2010, it was stated that in the process of work training (technical training) the reasons for dropping the program were mainly three: I) urgent need to have an income enough to support the family expenses, II) the distance from their house to the training centers, and III) subsidies which were either low or delivered past the due date. About the third indirect factor, according to the Ministry of Education, the productive activities in agriculture, construction, energy, food. Mechanic, mining and fishing, have a great unmet demand for technicians and there is not enough quality offer in these areas. Throughout the country, the possibility for training at institutes or schools of high educational level has not varied significantly in the last years, as can be observed in the following chart: 8
Chart Educational Institutions and Teachers staff of Production Technology Institutes and College schools in Peru * includes work training Source: MINEDU, School Census 2000-2009 Elaboration: CEPLAN Finally with regards to the fourth indirect factor, the document Issues for labor inclusion among the youth (CEPAL 2003) states that one characteristic of the Latin American labor markets is the continuous presence of great issues for labor inclusion among the youth, namely high rates of unemployment and poor labor conditions in youth labor. The results of the study Youth and International migration in Peru (INEI 2011), show that although the level of unemployment among the Young population has decreased in the last years, the unemployment rate is still high. Chart Levels of unemployment among the Young population 2002-2009 70 60 66.4 66.3 65.3 64.8 62.8 59.6 56 54.7 50 40 30 20 10 0 2002 2003 2004 2005 2006 2007 2008 2009 Source: Youth and International Migration in Peru, (INEI 2011) 9
III. DEVELOPMENT MEASURES THAT ARE BEING IMPLEMENTED TO HELP YOUTH WITHOUT ACCESS TO A DECENT JOB AND COULD BE REFERENCIAL TO OTHER COUNTRIES. The measures that have been developed up to date were implemented by the organizations prior to the Youth at work Program during the period 2004-2011; this implementation was designed to have three models of intervention which, since the moment of its creation, the Youth at work program has undertaken. 3.1 Measures developed by organizations prior to program 1. IDB Model (2004-2010). In this stage, the Program was developed using economical resources from the loan made between the Peruvian Government and the Inter-American Development Bank - IDB. The implementation was made following the outlines of the Project aiming at facilitating young people from low income status and between 16 to 24 years old their access to employment through specific actions of technical training and work experience, articulated with information, training, and labor mediation services, which answer the needs from the business sector and the labor market 2. Additionally, the Program aimed at improving the level of competence and efficiency of the institutions providers of training and development courses via a closer interaction between the institutions and the enterprises from the productive sector. In terms of functionality, the program was structured over the base of four main components: (I) Labor training at ECAP and the enterprise. The beneficiaries of the Project received three months of training at the ECAPS and later three months of training at an enterprise under the supervision of the EAP and the UEP (ii) Selection, monitoring and follow up stages of the training organizations (ECAP), which included the registration of ECAP, the course selection, monitoring and supervision of ECAP, as well as feedback and technical assistance (iii) Intermediation and labor information; here the beneficiaries were given support through information and labor mediation in charge of the PROJOB CIL Network (Labor information and employment centers) and, (iv) Evaluation and monitoring, aiming at evaluating the products, results and impact of the Program in order to improve its design. 2. 2010 Model 2010 (Ordinary resources- closing of the IDB Project). According to the twenty second final disposition of Law N 29465, Law for the Budget of the Public sector during the Fiscal year 2010, it was established that the PRO Youth Program would be assigned resources from the Public Budget in order to continue the training planning. This way, the Program started operating as a permanent 2 Reglamento Operativo del Programa de Capacitación Laboral Juvenil -PROYOUTH (2004). 10
budgetary activity with a starting budget of 21.2 million of soles. This situation was given in parallel to the closing of the IDB stage. In this period, the main objective of the Program was to improve significantly the youth employment rate leaving aside the efforts to improve the levels of competence and efficiency of the training and development suppliers (ECAP). 3. Proyouth Model 2011 (January-July). During this phase, the Program is institutionalized as a permanent activity of the Ministry of Labor and Employment Promotion. Its main objective is to improve the levels of employability for the young population aged 16 to 24 economically disadvantaged and/or socially vulnerable. In the light of previous experiences, the program reformulates the model of intervention seeking to answer the needs of the target population and the labor market. The components of the program were: (I) determining the level of training offer (II) focalization, (III) training. Component 1 determining the level of training offer. This component is oriented at identifying the economic sectors with greater demand in the labor market, in the prioritized areas of intervention, as well as the institutions for labor training and the courses of operational-technical level, with the objective of offering the beneficiary an adequate training according to the program objectives and, furthermore, assuring the correspondence between the course and the demand of personnel in the area of intervention. Component 2. Focalization. This component is oriented at determining the condition for eligibility of the young prospective beneficiary. The determination of the eligibility condition is done based on the criteria for selection determined by the Home Focalization system -SISFOH (levels of poverty) and through the application of the Socio-economical Form. Component 3. Training. Action aiming at providing young beneficiaries of the program, technical knowledge at a basic operating level and socio-generic competencies through training institutions in order to improve their employability. It includes activities ranging from signing an agreement and / or contract until the final settlement and payment of the service. In this context, supervision is an integral and whole sub-process, which aims at ensuring strict compliance of the commitments and obligations established in the agreements and contracts created by the program. As of August 2011, by Supreme Decree No. 013-2011-TR, it was created the National Youth Employment Program "Youth to Work", with the aim of providing 11
young people with low income and / or vulnerability of rural and urban areas, the following services: a) Technical training at a basic operating level aligned to the dynamism of the labor market b) Development of skills to generate enterprises, aligned to the demands of domestic, regional and local markets. The program has two components, both aiming at the employability and inclusion of young beneficiaries in either dependent and/or independent jobs. Component I. Basic operational technical training level aligned to labor market dynamics The conceptual model of this component prioritizes the development of four (4) major interrelated processes (determination of the range and offer of training, focalization, training and employment connection), beginning with the analysis of the productive economic activities which generate jobs and support the training service and establish the connection between the beneficiaries and the prospective jobs. The objective of this component is to improve the employability of young beneficiaries, facilitating their access to the formal labor market, through training in basicoperational technical occupations, meeting the requirements of the labor market in areas of intervention and connection services that articulate labor supply and labor demand. Through this component it is expected to: Ensure that the beneficiaries acquire skills that enable them to perform as dependent workers on entry-level operational occupations in the formal labor market. Ensure that the beneficiaries develop transferable skills and social skills that reflect a positive attitude during the job search process and facilitate their employment. The processes involved in the component are as follows: a) Determination of the training offer b) Targeting Process c) Technical training for job placement d) Job connection 12
Component II. Development of capacity in generation of projects, aligned with the demands of domestic, regional and local market This component aims at promoting the generation of business ideas and developing them as an alternative for the development of economic activities that enable young people, as program beneficiaries, to enter the market autonomous and independently. The specific methodology to follow provides formative stages and advisory services, whose development will be required in relation to the needs of young entrepreneurs and the characteristics of the population - specific objective that will be served. Through this component it is expected to: Promote the generation of business ideas. Strengthen and / or develop the entrepreneurial skills of the beneficiaries. Promote the initial implementation of business plans. The processes involved in the component are as follows: a) Targeting process b) Formative Stage c) Advisory stage Tracking, monitoring and impact assessment The monitoring phase aims at ensuring that the execution of the processes and procedures are performed according to the plan, and help achieve the objectives, outcomes and goals of the program. The monitoring activities are carried out by organizational units of the program in the framework of its powers and responsibilities, being the Management Unit of Planning, Budget and Evaluation in charge of the general monitoring 3.2 Implementation Plan The products identified by the program according to the new lines of intervention are: Young people living in poverty with entry-level technical training. Young people in poverty have access to training in entrepreneurship. 13
Name Table 9. Products Description Items Product 1 Product 2 Youth at poverty with entry-level Youth at poverty have access to technical training. training in entrepreneurship. General description Together with the product it is provided technical job training within the framework of the dynamics of the labor market as well as the connection and / or links with employers, allowing the formal inclusion of youth program beneficiaries. Who is the beneficiary? Young people aged 15 to 29 years, considered as eligible according to the standards of ISFOH What goods and / or service-specifically-, will the beneficiary receive? Where will they be delivered? Who delivers the product? How often and / or at what point will the goods and / or services be delivered? Technical training at a basic operational level and connection and / or links with employers At training institutions The Program through the training institutions Permanently Together with the product it is provided training for entrepreneurship in urban and rural areas. In urban areas, it aims at building job skills among young entrepreneurs aged 25 to 29 years to promote the development of sustainable production units, comprising three stages: (I) Generation Module of Business Ideas, (ii) Implementation Module of Business Ideas and (iii) Technical Assistance and Delivery of Seed Capital. In rural areas, the product includes the strengthening of technical skills and development of technical productive competencies as well of the development of individual and associative productive enterprises based on the potential of the environment and linked to regional economic opportunities as well as in implementing technical and productive centers. Young people aged 15 to 29 years, considered as eligible according to the standards of ISFOH Urban Area: Entrepreneurship training, technical assistance and provision of seed capital. Rural Areas: Basic productive and entrepreneurial technical training, technical assistance, promotion and fairs, and implementation of technical and productive centers Urban Area: At training institutions. Rural Areas: Local public and private institutions in the area. The Program through specialized consultants and / or training institutions Permanently 14
To evaluate the compliance and performance of these products, the following indicators have been designed: Specific Objective/ Product Objective: Job inclusion either as a dependent or selfemployed worker for youth in rural and urban areas of the country. Specific Objective: Development and strengthening of the work and entrepreneurship competencies of youth. Table 10. Description of indicators Indicator Measurement Unit 2012 Goal 1 Youth inclusion in the labor Number In process market, as dependent workers. 3 Number of job offers selfgenerated by Young people by means of the implementation of business plans. Number In process Implemented business plans. People 172 Young people who successfully finish training program. Business plans 39,790 Product 1: Young people in poverty with basic technical training. Young people who successfully finish the process of technical work training. People 25,078 Product 2: Young people in poverty have access to training in entrepreneurship. Young people who successfully finish the process of training in entrepreneurship in the rural environment. Young people who successfully finish the process of training in entrepreneurship in the urban environment. Number of productive business units implemented in the rural environment. People 8,032 People 6,680 Technical productive centers implemented 1/ Includes the final goals as a result of the Budget balances in 2011, as well as the results as a consequence of the additional demand of budgetary resources of 23.8 million of soles (2.7 per dollar) for 2012. 37 3 Current product of the updated program (approved by Supreme Decree N 013-2011-TR), at present the Logical framework of the Program and Annex 2 Minimum content of a budgetary program aiming at results. 15