Authors: Clemente Avila Parra , Aylin Isik Dikmelik and Auri Minaya
A young woman in Mexico City stands in a long line, desperate for government assistance to get a job. Despite her college degree, Claudia has jumped from gig to gig since she lost her job during the onset of the COVID-19 pandemic in April 2020. Now as the labor market starts to recover more than a year later, she is waiting in the blazing sun hoping to interview for positions that pay one-third of her old salary. She thinks, “Forget a job that pays well. There are no jobs.”
The Skills and Jobs in Demand Analytical Tool (SJDAT) – developed jointly by the World Bank’s Social Protection and Jobs team and Mexico’s National Employment Services (SNE) – aims to help the hundreds of thousands like Claudia in Mexico. Even educated job seekers equipped with transferable skills face a difficult post-pandemic job search and a lack of accessible information on what local employers demand. SJDAT fills this gap as a new tool with real time monitoring of local labor market data.
Pandemic Job Impacts on Vulnerable Groups
Before the pandemic, women and young people in Mexico already struggled to find employment. Mexican women have one of the lowest rate of labor force participation in OECD countries and the Latin America and Caribbean region, and a significant share of youth are not in employment, education or training. Even when employed, these vulnerable groups are more likely to work in precarious conditions such as in informal jobs and for lower wages. In the pandemic’s aftermath, Mexican women and young people confront higher job losses and a slower return to work.
Data Challenges to Building a More Inclusive Labor Market
Redeploying the vast number of workers displaced by the pandemic, particularly vulnerable groups, requires matching skills demanded by the labor market with the supply of job seekers. Although information on labor market trends is always necessary to ensure better job matches, monitoring and identifying transferable and specific skills in real time is even more important after pandemic lockdowns and work from home policies rapidly changed in demand skillsets.
Mexico, like many other countries in the region, faces critical data gaps to support labor market inclusion. Despite a large quantity of labor market data, limitations include a lack of data on in demand skills and up-to-date, granular data on in demand occupations. At the micro level for individual job seekers and employers, this information gap may result in low quality job matches, lower wages, lower employee satisfaction and higher staff turnover. At the macro level, it decreases competitiveness, productivity, and returns to education.
Better Data Enables a Stronger Government Response
As Mexico currently sees its lowest unemployment rate in a long time, labor market data remain critical to facilitate pandemic recovery and better matches for women, youth, and all job seekers. National and local governments need labor demand data in particular to design training programs, create job relocation policies and educate people for current and future skill needs. Given the diversity of labor markets across Mexico, governments also can use this information to inform local employment policies and interventions.
An Innovative Tool Filling the Information Gap
SJDAT addresses a lack of data on shifting skill needs in the Mexican labor market by generating up-to-date indicators on in demand occupations and skills at the national, state and city levels. SJDAT integrates traditional sources, such as labor force survey data, and real-time labor market information, such as online vacancies, to generate labor market information regularly and through largely automated processes. It uses machine learning methods to categorize occupations and skills in demand based on textual and semantic analyses of job descriptions. The European Skills, Competences, Qualifications and Occupations (ESCO) is the basis for the skills taxonomy, complemented by additional sources to adapt categories for the local labor market. Given that in demand skills evolve over time, the process also uses a semantic similarity process to search for new skills.
Example of available data. Illustration shows number of monthly vacancies per hundred thousand inhabitants (15 years or older).
Developed jointly with SNE, SJDAT is a collaborative effort to strengthen institutional capacity for labor market inclusion. Aiming for a user-centered and sustainable tool, SJDAT’s data and visualizations will be useful for job counselors and employer outreach specialists within SNE, student career counselors, students and families, public policy analysts, and decision makers.
Like other uses of real-time labor market information, the tool has some limitations. Online vacancies are not representative of the overall Mexican labor market since they only cover some sectors and have a bias towards a certain firm size. Additionally, categorization of some skills through ESCO involves a lack of granularity. Additional validation exercises using vacancy data, national labor market surveys and qualitative studies to strengthen the tool were carried out.
As an example for other countries and in line with international best practices, Mexico’s Ministry of Labor plans to make SJDAT part of a broader integrated Labor Market Information System (LMIS). The Ministry hopes to increase its LMIS integration to provide advanced labor market information, job matching, career and skills guidance, and links to other initiatives. While an analytical tool cannot solve labor market challenges on its own, leveraging the platform to inform other stakeholders and future programs will increase its development impact.
Example of available data. Illustration shows characteristics of those employed in top 5 occupations in demand in Monterrey, Nuevo Leon, based on vacancy and labor force survey data.
This blog was first published in Spanish on the América Latina y el Caribe blog platform.
