NN46, September 2011
Towards a New Global World of Skills Development? TVET's turn to Make its Mark
Education, Skills and Poverty Reduction: The Case of Pakistan
By Shehryar Janjua, Consultant to UN Office on Drugs & Crime, Islamabad
Email: shehryarjanjua@gmail.com
Keywords: Skills development and poverty; informal training; Pakistan.
Summary: In spite of the strong emphasis on skills development for poverty reduction found in policy and planning texts, it is not clear how the Government of Pakistan plans to realise its ambitions in this direction. The relationship between skills development and poverty reduction is neither simple nor automatic, especially since an overwhelming majority of skilled individuals are found in the neglected informal skills and employment systems.
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Analysis of various policy and planning texts of the Government of Pakistan reveals an overt emphasis on skills development for addressing issues of economic growth, competitiveness, employment and poverty reduction. Perhaps the most significant documents in this respect are Vision 2030 and the Medium Term Development Framework (MTDF) (2005-10). In particular, the MTDF envisions investments in the skills system to increase the number of training providers, establish autonomous skill development agencies at the provincial level, improve demand-responsiveness, and enhance enrollment to 1 million individuals per annum.
These targets, however, appear ambitious in light of the prevailing situation in the sector. According to an estimate from the National Vocational and Technical Education Commission, existing enrollment in all technical and vocational programmes stands at 315,000 across 1,647 institues. Against this, the size of the labour force is 51.78 million, less than one percent of which have any form of technical or vocational education (GoP 2008). Likewise, less than 1.5 percent of secondary school leavers are enrolled in technical and vocational streams (GoP 2007).
In terms of access, formal institutes demand a minimum of middle school (eight years of education) for vocational courses, and matriculation (ten years of education) for technical programmes. In contrast, 44% of the workforce in Pakistan is illiterate, while only 30% have education of middle school or higher (GoP 2008). Direct and opportunity costs of such programmes further constrain access. Given the correlation between poverty and educational attainment, the poor are likely to be deprived of formal training opportunities.
The large gaps left by the formal training and employment systems are fulfilled by informal arrangements. In addition to employment in the informal sector, formal enterprises also rely heavily on informal, on-the-job training. While statistics for the wider informal economy are unavailable, the informal sector alone provides 73% of all employment outside of agriculture in Pakistan (Ibid).
However, research reveals that poverty is a discriminating factor even in informal settings. Opportunities for informal training are often accessed using social and family connections, which automatically puts the poorest of the poor at a disadvantage. There is also the issue of opportunity costs as entrants into the system are only provided nominal stipends during the period of training (between one to three years). Moreover, relatively high technology trades, such as electronic or automotive repair, require formal education up to the middle or matriculation levels.
Nonetheless, the fact remains that informal training and employment systems are generally more accessible to the poor. In fact, qualitative accounts indicate that most poor individuals, who are unable to complete schooling and obtain formal or public employment, view informal skill acquisition as an alternative. Informal skill acquisition is also associated with a sense of economic independence and security of income.
In this context, it is evident that any effective strategy for poverty reduction through skills development should focus on the informal sector. Enterprises in the informal sector are typically trapped in a cycle of low skills, low technology, low productivity and concomitantly low wages. Since informal training is typically on-the-job, such deficiencies spill over onto the process of skill training.
Market outcomes for informal enterprises are strongly influenced by environmental factors, primary among which is availability of startup capital. Informal enterprises are poorly linked to credit markets and most requisite capital is typically arranged from personal or family sources. Other significant factors identified during research include lack of access to retraining opportunities and business development services (such as business counseling, technology support, identification of high-value markets etc). Purchasing power in the local economy also plays a major role, especially for enterprises in the services sector.
References
GoP 2008, Labour Force Survey, 2007-2008, FBS, Islamabad
GoP 2007, Vision 2030, Planning Commission, Government of Pakistan
This note draws on Janjua, 2011, Is Skill Training a Good Investment for the Poor? The Evidence from Pakistan, International Journal of Training Research, 9:95-109
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Cite article as: Janjua, S., (2011) ‘Education, Skills and Poverty Reduction: The Case of Pakistan’, in NORRAG NEWS, Towards a New Global World of Skills Development? TVET's turn to Make its Mark, No.46, September 2011, pp. 51-53, available: http://www.norrag.org
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