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Resilient Human Capital: A precondition for Structural Transformation

Adrian Gaucci and Chrystelle Tsafack Temah, UNECA

This paper seeks to demonstrate that the education output in its current state does not allow for the building of resilient human capital in Africa’s Least Developed Countries (LDCs). African LDCs are characterized by structural handicaps, including their low level of human capital that prevents them for attaining internationally-agreed goals and poverty reduction. Moreover, their moderately good economic growth performance has not resulted in a commensurate reduction in poverty, mostly due to lack of employment opportunities. While the reasons for this low employment creation are diverse and stem from the nature of growth itself (demand side of labour market), on the supply side the mismatch between education profiles and demand by the formal and informal labour market is an important driver. Indeed, the level, quality and content of the predominately primary school output do not meet the requirements of a labour market. Using primary and secondary data on employment in Ethiopia, this paper shows that numeracy and literacy skills are not sufficient for employment opportunities and reinforce overall vulnerability. A comparison with Southern Asian economies is also used to determine a threshold of education (level and quality) that is necessary to improve the employability of the labour force. Our results suggest that the shift from an incremental schooling model to an instrumental model in the curriculum that allows problem solving and cognitive development is vital in strengthening human capital resilience, contributing to overall resilience in African LDCs. In turn, a more resilient human capital status is a necessary and sufficient condition for structural transformation of LDC economies.