economy

Education, wages at odds

A study found that less than half of the country’s workforce had attained a higher education level.

Current economic trends tend to undercompensate those workers with better skills.

la prensa

underprepared:Despite moderate progress in enhancing public school education, a UN-sponsored study revealed gaping disparities in education levels between Panama’s urban and rural populations. 1115328

A scant 11.2 percent of the current Panamanian workforce has a technical, college or graduate education, according to a study on poverty and income distribution in Panama by the Comisión Económica para América Latina y el Caribe (Cepal).

And though strides within the education system were shown to have been made between 2001 and 2007, some 4.6 percent of the workforce never received a formal education at all.

“Most workers have an educational level equivalent between half-incomplete to average,” concluded the report.

Despite those gaps, the National Index of Human Development of the United Nations Program for Development indicated that the progress made to improve education over the last seven years is measurable.

For starters, the length of the average obligatory education increased from 8.7 years in 2001 to 9.3 years in 2007. What that average hides, however, are the gaping disparities between the education in Panama’s urban centers, where students spend about 10.5 years in class; and the countryside, where the length of an education plummets to 4.3 years.

That the length of education was extended is a good start, but the study also found that the economic compensation that usually accompanies the extra time spent in school aren’t reflected in the wages of the country’s workers.

In 2001, for example, someone with 14 years of study earned 131 percent per hour more than a worker without an education. Since then, however, that correlational relationship seems to have broken down, reducing the financial incentive of gaining a higher education.

“The awards given in the job market for each additional year of study fell from 11.7 percent in 2001 to 10.3 percent in 2007, implying a drop of almost 12 percent over the seven years,” said the report.

Economist Miguel Ramos, of the University of Panama, found the imbalance counterproductive to the country’s ostensible goal of expanding the national economy through improving the educational system.

The study postulated that the paradoxical situation could be attributed to the fact that, as skilled labor in the capital has become more abundant and more competitive, employers have more options to choose from and have therefore been able to reduce the wage offered, with the certainty that they can hire people with the same education level without offering a higher salary.

“It’s clear that the economic growth is good. But if it doesn’t go hand in hand with fairness and social equity, that growth could even be dangerous for the stability of the country,” said businessman Enrique de Obarrio.