[2013] JARAMILLO, Miguel. From Supply- to Demand-led: Labour Training in Latin America. ELLA. Economic Development, Active Labour Market Policies, Policy Brief 1.

Over the past two decades, most Latin American countries began to see the need to reform their labour training systems. Up until this time, traditional training in Latin America had been supply-driven, with large-sized public sector institutions providing training based on what they perceived was needed within a state-led industrial development framework. Graduates of these training institutions were supposed to be absorbed by the emerging industrial sector. However, this model broke down during the crisis-ridden 1980s, as the firm-size structure of the economy shifted dramatically towards smaller firms and the informal sector grew exponentially. The response in the 1990s was a demand-driven approach, where the state had a role in financing, but much less so in providing training. A host of programmes along these lines were implemented across Latin America, many of which included built-in impact evaluations. This Brief begins by describing general features of the shift to a demand-led approach to labour training and highlights some of the main programmes in the region. It then presents the results of the impact evaluations undertaken, concluding with some key lessons that may be useful for labour training initiatives in other contexts.