Ask the Experts

How does higher education guarantee entering into the middle class?

Alicia Bárcena answers:

Educational achievement has always marked and defined the middle class. Public policies that have led to mass access to education have led to a broad-based improvement in educational accomplishments, among them higher completion rates in secondary and tertiary education.

This has led to more upward mobility in terms of earnings and types of occupation. Still, there has been an education depreciation effect. The higher the average years of schooling, the more demanding the labor market becomes in rewarding those educational achievements. Many non-manual jobs that require more schooling often see their rate of return to education deteriorate. As those non-manual jobs pay less for schooled employees, their workers fall below the income threshold characteristic of the middle class.

Moreover, increased access to university education increases the proportion of technicians and professionals. But lack of investment and lags in technology in Latin America have meant that labor demand has failed to keep up with labor supply, causing a surplus of qualified workers for a limited pool of high-end jobs.

Finally, the increasing segmentation in the quality of university education spills over to the labor market. The importance of a university degree for future occupational mobility, future earnings and the type and quality of work varies—and with it the liklihood of joining the middle class—and is linked to the quality of the university.

Aggregate data for Latin America still show a higher rate of return for the working population with a university degree over workers with lower education levels. On average, data from circa 2008 showed the expected return on education was around $2,000 in monthly earnings for a person with a complete university education, decreasing to around $1,100 per month for a person with an incomplete university education and about $700 per month for a person with secondary education. University education remains a major passport—or barrier—to enter what is traditionally understood as middle class.

Francisco Rivera-Batiz answers:

Higher education is the key to entering the middle class. Globalization, technological change and other factors have led to a widening gap in the economic outcomes of college graduates relative to those with less schooling.

The greater opportunities for finding employment and higher income provided by tertiary education are propelling those fortunate enough to reach that level to middle class status. For instance, a study in Mexico indicates that tertiary education attainment is linked to an increase of 20 percentage points in employment rates. And a study just released by the OECD shows that Brazilians with tertiary education earn an average of over 260 percent more than those with just upper–secondary education.

The paradox is that even though Latin America and the Caribbean have made great strides in raising tertiary enrollment rates, access to—and completion of—quality tertiary education remain strongly connected to socioeconomic status. The proportion of young people in the lowest income quintiles of the population who reach higher education is miniscule.

Increased affordability of higher education, through greater financial aid, is a must. And stronger efforts to raise the quantity and quality of the K-12 education available to low-income families are essential for colleges and universities to become a viable avenue for these families to enter the middle class.

But for all of this to work, higher education must offer skills that are demanded by employers in the labor market.

The expansion of low-quality educational institutions that do not provide great value-added must be curbed. At the same time, governments and policies need to be improved to help ensure that those who graduate from higher education can find jobs or create their own businesses. You need only look at the recent experiences of angry, unemployed youth in the Middle East and North Africa to see how dangerous and explosive failure to address these issues can be.

Georges Haddad answers:

The growing importance of knowledge in our globalized world has contributed to the emergence of a new middle class for over 20 years. The greatest beneficiaries of these new knowledge societies have been China, India and Latin America.

Just as the growth of the middle classes in Europe, North America and Japan brought greater demands on education, so too has the emergence of this new middle class.

The trend has grown to such an unprecedented scale that educational institutions are no longer capable of meeting the demand for quality education at the primary, secondary or tertiary levels. The result has been the creation of expensive parallel education systems that favor the middle class—further augmenting inequalities within these countries.

For higher education to really serve as an engine for social mobility, we must rethink and give greater priority to primary and secondary education. The emphasis should be placed on improving the quality of those early educational steps, ensuring equitable financial and political support to the different stages of the educational system and providing access to quality education to the greatest number of people possible.

Efforts to re–focus education policies should include objective and effective evaluation of educational quality and the initiation and/or expansion of scholarships or government-supported loans to promising students from disadvantaged families.

Adults should not be left out of a broader analysis and reform of the system. Public- and private-sector efforts should be explored that can apply cutting-edge technologies to increase opportunities for training. Partnerships should be created between businesses and universities to promote cooperation across borders and sectors to ensure that older students and professionals also have access to the educational opportunities they need.

Rebeca Grynspan answers:

Economic growth and proactive social policies have led to the reduction of poverty and the growth of the middle class in Latin America. At the same time, returns to education have evened out in most countries in the region and the wage gap between skilled and unskilled workers has dropped.

In the future, however, we cannot count on this reduction in wage differential and returns to education to continue unless countries boost workers’ overall skill levels and prevent the deterioration of economic opportunities and workers’ protections.

Two factors make this challenge even more pressing. First, with growing demand for education, the variance in education quality has increased. This variance has tended to mirror and reproduce socioeconomic inequalities. Second, the contribution of female labor participation to the new middle classes has not yet translated into parity on returns to education. Even though women have been studying and working more, they are still paid less for equal work than men.

New technologies are replacing tasks previously performed by low- and middle-skilled workers. This has expanded the labor opportunities for high-skilled workers and their wages. But over the long-term, if there is no corresponding increase in the quality of education in areas of technology, then existing income inequalities will widen.

There is a direct relationship between years of education and technological proficiency in Latin America. That technological gap between the rich and the poor closes at the level of higher education. Consolidating the middle class in the region will depend in part on how government and the private sector address these differences in access to quality, technology-focused education.

 

 

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