The world is at a demographic inflection point, presenting both challenges and opportunities. On the one hand, lower and lower-middle-income countries, particularly sub-Saharan Africa and South Asia, are experiencing expanding working-age populations. But they face a significant challenge: insufficient job creation to absorb all new labor market entrants. At the same time, many high-income and upper middle-income countries are rapidly aging and could face a combined shortfall of up to 750 million workers by 2050. This shortage cannot be fully addressed through increased female labor force participation or extension of retirement age. A potential solution lies in international labor mobility. The Global Skill Partnership (GSP) serve as a good example of a model that can help address these challenges by aligning skills with labor market needs across borders.
The Challenge: Global Skills Mismatch
Despite the potential benefits of international labor mobility, a serious global skills mismatch exists. Lower and lower-middle-income countries have made progress, yet their gross secondary and tertiary enrollment rates remain significantly below those of upper-middle and high-income countries, and they face severe gaps in education quality. Consequently, new labor market entrants in labor-abundant countries possess lower skill levels compared to retiring workers in countries facing labor shortages. Addressing skill shortages in sectors such as healthcare, hospitality, renewable energy, and information technology requires substantial investments in education and technical training in countries that will account for the largest portion of the global labor force.
Education and Training as Catalysts
While concerns about brain drain are valid in some contexts, international labor mobility can also amplify education and training benefits in lower-income countries of origin. Historical examples illustrate this point. During the IT boom in the 1990s, India’s investments in polytechnic universities trained a large pool of workers, some of whom moved abroad and later transferred knowledge and technology back to India upon return, supporting now the increased export of services in the sector. Similarly, the opportunity to migrate incentivized more Filipinos to study nursing, resulting in a significant increase in licensed nurses within the country.
Global Skill Partnerships (GSPs)
Markets alone may not resolve the global skills mismatch. As an international labor mobility model, GSP offer a “triple win”, benefiting countries with a surplus of workers, countries with more jobs than workers, and the workers themselves. GSPs are bilateral training and mobility agreements between sending and higher-income receiving countries, designed to meet skill needs in both locations. They facilitate labor shortages in destination countries through legal pathways (“abroad” track) while boosting the supply of workers for employment in origin country labor markets (“home” track). GSPs have three defining characteristics.
- Training at the origin–the financial cost of which is generally lower than in the destination–is shaped by demand in both countries.
- While financing is a shared responsibility of stakeholders in both countries, employers and governments in higher-income destinations are in a strong position to contribute.
- Labor mobility is facilitated through agile and legal pathways.
Insights from GSPs
The Australia Pacific Training Coalition (APTC) is a good example of a GSP. Launched in 2007, APTC helped improve vocational education and training systems in nine Pacific Island countries and Timor-Leste. Since the program’s inception, APTC has produced over 20,000 graduates in high-demand fields such as construction, hospitality, engineering, and health care. While most graduates remain in their home countries, since 2019, around 8% have migrated to work in Australia, facilitated by aligning training with legal pathways and engaging with Australian employers.
Similarly, the German Agency for International Cooperation’s GSP in nursing with the Philippines shows effective ways to handle skill recognition, financial sustainability, and brain drain. Training in upgraded facilities, along with extra modules required in Germany and learning German, helps people get their skills recognized faster at destination. Funding by German hospital employers keeps the program going, while having more participants stay in their home country helps reduce brain drain.
In a region such as South Asia, where millions of people emigrate for better job opportunities, skills development could play a crucial role in enhancing prospects for higher-quality, higher-paying jobs both domestically and internationally, while also helping workers become less vulnerable to exploitation. At the recent South Asia Labor Mobility Conference, policymakers highlighted programs such as the Triple Win Program (benefiting countries of origin, destination, and the migrants themselves), in which licensed nurses from Kerala, India obtained language and technical training for working in Germany.
Recommendations for Policy Makers in Developing Countries
For developing countries that want to maximize the gains from international labor mobility through GSP Models, it is paramount to:
- Invest in Education and Training: Prioritize investments in education and technical training to enhance skill levels and meet global labor market demands.
- Collaborate with Receiving Countries: Strengthen partnerships with higher-income countries to align training programs with labor market needs and ensure financial sustainability.
- Mitigate Brain Drain: Implement strategies to retain talent within the country while benefiting from knowledge transfer through international labor mobility.
Source : World Bank
