SKILLS DEVELOPMENT AND POVERTY REDUCTION

1. SKILLS DEVELOPMENT AND POVERTY REDUCTION Robert Palmer Centre of African Studies, University of Edinburgh Presentation at FAO, Rome, 09.11.05

2. A Multidimensional Understanding of Poverty in Theory, but a Narrow Measurement of Poverty in Practice (1) • General consensus that poverty needs to be understood in a multidimensional manner. • Beyond the traditional use of income measures as proxies for poverty • Poverty related to low achievements in education and health, with the concept including vulnerability, exposure to risk and voicelessness/powerlessness.

3. A Multidimensional Understanding of Poverty in Theory, but a Narrow Measurement of Poverty in Practice (2) • Despite multidimensional understanding of poverty… • in practice the core meaning of poverty, for most, remains lack of adequate money to pay for basic needs • - emphasizes physiological needs more than social or psychological needs. • when forced to specify which aspects of poverty are being reduced or should be reduced, policy-makers and practitioners tend to focus on a narrow set of measurable dimensions

4. Three Kinds of Poverty Reduction • Poverty alleviation - Alleviating thesymptoms of poverty and/or reducing the severity of poverty without transforming people from ‘poor’ to ‘non-poor’; • Lifting people out of poverty - ‘Poverty reduction’ in the true sense; reducing the numbers of poor people and/or transforming poor people into non-poor people; • Povertyprevention - Enabling people to avoid falling into poverty by reducing their vulnerability.

5. Poverty line Preventing poverty/ addressing vulnerability Alleviating poverty Lifting people out of poverty Three Kinds of Poverty Reduction (2) Source: Adapted by Palmer from Thin, 2004 Source: Adapted by Palmer from Thin, 2004 Source: Adapted by Palmer from Thin, 2004

6. Skills Development: A broad definition (1) • Skills development is not narrowly equated with formal technical and vocational education and training (TVET) alone, but is used more broadly to refer to the capacities acquired through all levels of education and training, occurring in formal, non-formal and on-the-job settings, which enables individuals in all areas of the economy to become fully and productively engaged in livelihoods and to have the capacity to adapt their skills to meet the changing demands and opportunities of the economy and labour market.

7. Skills Development: A broad definition (2) • Skills development does not refer to the source of education or training itself… • …but to the capacities that are acquired through these skills.

8. Skills Development and Poverty Reduction • Much evidence links primary/secondary education to +ve developmental outcomes assoc. with poverty reduction (income benefits, improved health, increased productivity etc). • But links not so semi-automatic as often expected…

9. Evidence suggests the need for other complimentary factors (eg farmer education fallacy) • Further, for SSA and MENA, evidence is suggesting that primary (& basic) education are not providing the youth with the kinds of expected benefits.

10. Instead, evidence stresses importance of higher levels of formal education, particularly upper secondary education and above as delivering the highest direct benefits to individuals. • Contrasts with the rates-of-return to education estimates - consistently show primary education as having the highest private returns.

11. For tertiary education, the evidence points towards higher incomes compared to those with lower levels of education. • Implicit link between tertiary education and poverty reduction – through the training of teachers, health professionals, higher-level agricultural professionals and so on

12. - helps develop aspects of an overall enabling infrastructure that can help lower levels of skills development translate into poverty reduction • Post-basic levels of education - important to promote economic growth (which itself is an essential, but not sufficient condition for poverty reduction).

13. Skills training (through TVET) has been linked to increases in productivity, quality, diversity and occupational safety, improvements in health and increasing incomes.

14. The Assumption of the Skills Training Agenda • The claims about the beneficial results of skills acquired through TVET perpetuate the assumption that this training leads to economic growth and poverty reduction • Assumption backed up with very little research or evidence. • Often taken as axiomatic, eg GoG, that skills acquired through TVET result in employment, increased incomes and growth/poverty reduction

15. Scattered evidence linking TVET to poverty reduction suggests that training can have positive impacts on incomes levels – provided it is not provided in isolation and is complimented by post-training support, advice and access to credit. • For TVET some evidence suggests that skills training frequently remains un- or under-utilized if it is provided alone (eg STEP in Ghana)

16. ‘Training, by itself, will not create jobs and will achieve its objectives only where the conditions are right for economic growth’ (World Bank, 2004). • Hence, skills training on its own may be a key variable, but it is not a determinant of poverty reduction, growth or of job creation.

17. For skills development to translate into poverty reduction, there needs to be the development of other factors, external to the education and training system

18. Since employment regarded as the the main pathway out of poverty for the poor (ILO, World Bank etc) • Among the most critical factors in such an environment will clearly be work and employment

19. Labour Market Environment • Growth in the economy and availability of more and better employment opportunities; • Advancement, accessibility and adoption of technological capabilities; • Development of an equitable ‘infrastructure’ for formal and informal enterprises; • Presence of meritocratic access to both the formal and informal labour markets; • Availability of financial capital; • Improved working conditions

20. Quantity and quality of human resources produced depend on both the delivery capacity of the formal and informal education and skills system, and on the demand for these resources. • Not simply a case of increasing the supply of educated and skilled workers through investing heavily in expanding the provision of education and training.

21. Education and training, alone, do not result in increased productive capacity in the form of employment. • Nor, by the same token, do they, alone, result in poverty reduction.

22. Therefore essential to question the capacity of a developing or impoverished transition countries’ economy, and especially their informal economies, to realize skills development outcomes.

23. If the skills acquired remain under- or unused, potential capacity may be increased, but actual productive capacity will not be. • There is a difference between skills development (the capacities acquired) and skills utilization (acquired capacities in use).

24. The acquisition of capacities (skills development) are dependent on many factors, including good quality education/training and the presence of a supportive environment. • But the utilization of these capacities requires further facilitative infrastructure.