Inequality of opportunity in Peru: How can young people develop relevant skills and find decent employment in a rapidly changing labour market?

Despite important economic and social achievements in Peru in the last decades, the country's education system and labour market remain both under-developed and highly unequal, hindering young people's possibilities for accessing meaningful jobs. Our research will examine the reasons behind this problem by looking at what drives young Peruvians' decision-making in relation to their higher education, training, and skill acquisition; what constrains the development of skills through childhood and adolescence; and why some young Peruvian men and women are more likely than others to find decent and meaningful work. We follow a three-tier approach:

We begin by looking at the factors affecting young people's decision to enrol in higher education, paying particular attention to the types of skills (cognitive and socio-emotional) that young people who access high- or low-quality higher education institutions possess. We also look at what defines young Peruvian men's and women's career choices, highlighting the role of social and gender norms.

We then turn to analysing specific sets of skills: cognitive (maths, language), socio-emotional (determination, teamwork), or technical (including digital). We evaluate how these each matter for accessing formal jobs with the aim of constructing education, skill and training profiles for young formal workers. Future earning expectations of young people are also examined to see whether they are matched with the labour market reality. This will shed light on whether incomplete information about the labour market is an underlying reason why young people engage in low-return activities.

Next, we focus on inequality in skills acquisition during childhood and adolescence. Specifically we examine who has access to quality education and training and the role of early-life circumstances in mediating the acquisition of relevant skills. We pay particular attention to the extent to which the basic education system in Peru is effective in developing appropriate skills. Ultimately, we aim to identify outstanding schools - those with very good students in challenging settings - and profile them in terms of their teacher, programme, and infrastructure characteristics.

Finally, we investigate the effectiveness of two particular initiatives that are aimed at improving skills of young people. The first is a school-improvement program ("Jornada Escolar Completa") that increases both the contact hours in targeted schools and their resources. Second, we examine the potential role of training schemes to offer a second chance to those individuals who are not able to complete their formal studies. We include young people's voices and experiences to shed light on the role of education and training in their work trajectories and of the support and barriers they face in accessing meaningful work.

The study is based on analysis of existing data spanning 15 years - on two cohorts of children as they have aged from birth to 15 years old and 8 to 22 years old. This is supplemented with matching information on schools - including their facilities, programmes and teacher qualifications. We will further complement the analysis by collecting new qualitative data (though semi-structured interviews and focus groups) for two subsamples of employed and unemployed youth and of those attending vocational and training institutions to examine how they evaluate the trade-offs between further education, training and work and how they conceptualise meaningful work.
The Peruvian case does illuminate the challenges faced by many LMICs that also have made important strides towards increased education, but where hard inequalities persist in terms of learning, acquisition of skills and youth access to meaningful jobs. The high-quality, timely and policy-relevant research that we aim to produce has thus the potential of shaping policy and recommendations in other LMIC countries, beyond Peru.

Who will benefit?

At the national level, key stakeholders include the Ministry of Education (MoE); the Ministry of Labour (MoL); the National Council of Education (NCE) -in charge of formulating the National Education Project; the National Council of Labour (NCL) -in charge of generating consensus on policies related to job promotion, job training, social protection, and minimum wages; the National Council of Competitiveness (NCC) -in charge of formulating strategies to strength competitiveness across all sectors, it is especially relevant that NCC has a section focused on human capital; SUNEDU (launched in 2016) and EDUCATEC (to be launched), these are offices assigned to the Ministry of Education to oversee the quality of universities and academies / technical institutes (respectively) as established by law in the recent "Ley Universitaria" (2014) and "Ley de Institutos Superiores" (2016); SINEACE, which provides certificates of professional competences to technicians in different careers; the Ministry of Development and Social Inclusion (MDSI); the Ministry of Health (MoH); the Ministry of Economics and Finance (MEF). On the demand side of the labour market, we will target CONFIEP -the main consortium of firms in Peru. Other key national stakeholders include donors, researchers, NGOs, youth advocates, youth leaders, and the media, who are already invested in Young Lives research and have strong relationships with GRADE.

At the international level, key stakeholders are multilateral and bilateral aid organizations and non-governmental organizations engaged in work on youth, education and more broadly speaking skills development in low and middle income countries: ILO, Inter-American Development Bank, World Bank, CAF, UNICEF.

How will they benefit?

At the national level:

- The evidence about returns to skills and training, the existence of gender stereotypes in careers choices and inequalities of information about returns to education (workstream A) will be of interest for Ministries and Implementing Organisations attached to these ministries (MoE, MoL, NCE, NCL, NCC, SUNED, EDUCATEC and SINEACE). This will assist them to justify more policy attention on reducing gaps in skills formation, training and information with a gender and inclusive perspective;

- The evidence about structural issues in skills formation that arise during childhood and adolescence, and the evidence of what makes some secondary-level schools exceptional good (workstream B) will be an input for Ministries as above and also the Ministry of Health (MoH). MoE, NCE, NCC, MDSI and MoH to guide education and health policy formulation for children and adolescents;

- The evidence about the impact of Jornada Escolar Completa (large-scale pilot initiative to improve school quality at the secondary level) and the evidence about the heterogenous experiences of youth on training for the labour market (worksteam C) will be an input for MoE, MoL, NCE, NCL, NCC, SUNED, EDUCATEC and SINEACE for education and labour policy formulation.

- MEF is an important stakeholder across the entire project because it has a specific say in government budget decisions, whereas the inclusion of the Private sector (CONFIEP), donors, researchers, NGOs, youth advocates and youth leaders ensures that consensus is reached across all actors.

At the international level, we will use the evidence gathered to present our international stakeholders a case study relevant for middle-income countries that face similar challenges (sustained economic growth due to favourable external sector but education system and labour market under-developed, and highly unequal) and for low income countries that might eventually face similar problems.