By Fathimath Lahfa, Head of Exploration - UNDP Maldives Accelerator Lab
Listen to this blog here
A substantial portion of the Maldivian population in prime working ages are not able to fully participate in the labour market. This is UNDP Maldives Accelerator Lab's frontier challenge.
Education and training are no doubt strong determinants of success in the labour market. Yet, children in Maldives receive less investment in their human capital development compared to children in other countries with similar fertility levels; less than half if we compare by prime age labour income. This coupled with the fact that labour productivity in Maldives has stagnated over the last decade is alarming.
Parallel to our first experiment, we picked an exploratory question to take a look at why certain groups of the population are not active in the labour market. In our earlier blogs we have shared some of our learnings from our exploration exercises with young people and employers. On this World Youth Skills Day, we zoom into the lived realities of youth to shed some light on the barriers in relation to young people and skilling and zoom out to see how these links to the larger skills systems and labour market monitoring. As we continue sensing the systems, the cracks in the systems become more evident.
Cost of further education and training is a barrier
The cost involved in accessing further education and skills training is a barrier for many young people. This includes the direct cost of training programs, living costs as well as the opportunity cost of lost income from not working. Maldives islands’ geographic dispersion is a constant barrier for communities to access education and training. Even when the cost of training is free, most young people need to relocate to the capital for the training programs which adds to the financial burden. Most depend on their families or take up a job to cover their expenses during this time.
‘’I was happy to get a job to support my studies at the polytechnic, but eventually had to abandon my course halfway because the job required all of my time and it was impossible to manage both,’’ Leevan, a 21-year-old young man from Gaafaru Island shared with us.
‘’I was depending on my husband for financial support during my diploma studies in Male’ but when my marriage ended during the course, I had to quit studies and return home,’’ a young woman from another local island, shared with regret.
Higher education loan schemes and more recently free tuition for degree programs have been welcome steps. However more varied financing models such as conditional grants to training providers, tax incentives to businesses, incentives to individuals can also be explored to ease the cost of technical and vocational skills training. It is also worth noting that broadening access to education and training across geographies can also reduce the direct and indirect costs involved in accessing skills training.
School to work transition is not easy
The process of transition from school to work is a significant stage in a young person’s life that has the potential to impact their labor market prospects. However, this was identified as a difficult process for many young people, experiencing many setbacks while trying to get their foot through the door into the world of work.
Failure to secure decent employment after months of perseverance leaves many young people discouraged. The notion of employability requiring experience whilst experience comes with employment continues to be questioned by the youth. A point to be noted though is that employability goes beyond possession of technical skills needed to perform specific tasks, but also being equipped with core work skills.
Preparing young people with the skills they will need for work starts long before they enter the workforce. Youth that are at this impasse is the result of an education system that has not caught up to the demands of the labor market. There is a lack of opportunity for character building and soft skills development in a holistic manner in the education system. Meaningful exposure to the world of work through extra-curricular activities, work-study programs and internships can help develop these skills, build confidence and prepare them for the labor market realities. Core work skills development during school years can improve employability and smoothen young people’s transition to employment.
After completing school, they also need support to identify and access post-school training and work options. Currently employment services play a limited role in facilitating the transition of young people to the world of work. Active labor market programs including employment services need to be well designed and targeted especially for young graduates, school leavers and youth at risk to connect them to productive work opportunities.
The National Apprenticeship Program initiated by the government recently attempts to tackle some of these barriers. The program aims to train practitioners for different occupations through on-the-job training together with industry partners. Linking this program with a formally recognized qualification added with a financial compensation for the training period has made the program more attractive. While such interventions maybe effective in achieving immediate objectives, they need to be clearly linked to a national level skills strategy to ensure its sustainable and responsive to the demands of the labor market.
The new reality
The Rapid Livelihood Assessment conducted in 2020 to understand the impact of the COVID-19 crisis on the Maldivian economy showed the adverse impacts experienced by the workforce in the form of job loss and income loss for many. It also revealed certain groups including young people, women and informal workers were among those most affected. There is little data to see what has happened since then, leading to the assumption that the long-term impact has got worse as the pandemic has extended for another year. On the other hand, employment data for certain industries especially from the private sector and informal sector are limited to non-existent.
The extremely weak labor market information system means beyond the interval figures on unemployment rates and public employment numbers, there is little reliable data on the employment trends and figures. The available data often exist as data silos such as the XPAT online system for migrant workers, Viuga 2.0 for Civil Service recruitment, Jobcenter for income support programs and more, with no established mechanism for data sharing between different systems and institutions. One of the recommendations of the Rapid Livelihood Assessment is to strengthen and streamline the labor force statistics. For active and regular labor market monitoring, we need a robust labor market information system through data systems that talk to each other. In parallel we need to build the analytical capacity within the public institutions to make sense of the data and feed this intelligence into strategic policy interventions.
The recommendations also include measures for a diversified economy and a future of skills framework aligned with the diversification framework. For a demand-led skills framework to materialize, the architecture for a better coordinated and responsive skills anticipation system needs to be put in place. Employers’ engagement in the skill systems is crucial. The timely data provided by employers is key to anticipate the skill demand of the economy and for training providers in meeting the needs of the employers while designing their programs and courses.
Maldives National Skills Development Authority (MNSDA) was established earlier this year under the Higher Education and Training Act 7/2021, effectively taking over the mandate and services provided by TVET Authority previously. While this has renewed hope that the skills development system will now receive its due attention and resources, we need to be reminded that effective coordination and governance mechanisms between institutional stakeholders need to be in place going forward.
The demographic window of opportunity is closing for Maldives to capture its first demographic dividend.
The critical window of time when the country has more working age individuals than the population who depend on them. However, when a substantial portion of this population are not productively employed, we cannot unlock their potential to accelerate growth for the country. If we will get a second chance to benefit from the second demographic dividend or not depends on if we are able to employing the previously unemployed workforce. This requires investments in women and young people's skills development, policies and programs to remove barriers and facilitate entry for them to participate meaningfully in livelihood activities. To do this right, it is crucial that we get the foundational elements right: a functional and nationally coordinated skills system backed by a reliable labor market information system.