Technicians and skilled workers trained in Latin America can migrate to other regions to work there. Cognitive Market Research publishes commercial market estimates for TVET, but the accessible source does not publish TVET wage premiums of 2 to 4 percent in Latin America and 15 to 20 percent in Asia-Pacific. These migrations can result in a transfer of human capital between regions, including when training has been financed by public budgets. Europe experiences exactly the same paradox, but from within: its peripheral regions finance the training of technicians who then go on to enrich the economies of its own centers.

The Essentials

  • South America represents 7.2 percent of the global vocational training market, but wage premiums there remain at 2 to 4 percent, five to ten times lower than in Asia-Pacific.
  • Asia-Pacific displays the highest annual growth rate in the TVET sector at 11.5 percent, driven by industrial demand that absorbs graduates by creating skilled jobs in sufficient numbers.
  • The mechanism is structural: when local skilled employment grows more slowly than training, selective migration becomes the adjustment variable, according to IOM and World Bank data.
  • The European Commission identifies 82 regions — representing nearly 30 percent of the population — as affected by the “talent development trap” phenomenon, concentrated mainly in Romania, Bulgaria, southern Italy, and Hungary.
  • Several Latin American countries are experimenting with training-labor market alignment reforms, but their capacity to retain trained talent depends first on the speed at which their productive fabric moves up the value chain.

The Wage Premium as a Barometer of a System

A wage premium measures what a diploma concretely returns to its holder. A low wage premium can indicate that the local market values certain technical training poorly. Employers do not pay a substantial premium because they cannot afford to, or because the structure of their activity does not sufficiently value advanced technical skills. Skill shortages exist in certain sectors and countries of Asia-Pacific, but no uniform TVET premium of 15 to 20 percent or widespread competition for these profiles is demonstrated.

Pay differences alone do not allow for evaluation of training quality. They reflect a difference in economic structure. Asia-Pacific has built, over two decades, dense industrial value chains that consume vast amounts of skilled labor: electronics, automotive, logistics, processed agribusiness. Latin America is relatively more specialized in raw materials and less in manufacturing than East Asia, but skill needs vary significantly by sector and country. Vocational training produces skills that the local economy does not yet know how to absorb at their full value.

TVET market estimates describe the economic activity of training; they do not, alone, allow for establishing the match between graduates and jobs. South America represents a significant share of the global market according to Cognitive Market Research. Asia-Pacific is presented by Cognitive Market Research as a growth region in the TVET market. The projected growth of the TVET market is associated with industrialization and skills policies, without proof that it everywhere implies sufficient absorption of qualified graduates. In some Latin American countries, the development of training and that of the productive fabric have not followed the same pace.

Migration Figures

The IOM documents Latin American migration flows, primarily to North America, Europe, and within the region; it does not confirm here a specific breakdown of skilled workers, particularly to Asia. The World Bank has traced similar trajectories in its work on skilled migration from the LAC region. These flows are not new. These flows can include graduates of technical and vocational training, as well as engineers and doctors.

This shift has a logic to it. Migrations of highly skilled workers — engineers, doctors, researchers — have been documented for a long time and have fueled the brain drain debate. Migrations of technicians, industrial maintenance specialists, logisticians, or qualified operators are more discrete. They do not make headlines. Emigration can reduce the local benefits of publicly financed training, but it does not necessarily mean a complete absence of fiscal or productive spillovers.

ECLAC addresses skill mismatches and migration dynamics, whose links can vary depending on contexts. A gap between training and jobs can increase incentives to migrate, among other factors such as wage gaps, networks, migration policies, and career prospects. Skilled migration can impose costs on the training country under certain conditions, but its net effects are not uniformly negative. Geopolitical fragmentation accelerates this dynamic by making it more difficult to create skilled jobs in economies struggling to attract industrial investments.

Asia-Pacific Built Demand Before Expanding Supply

The difference in dynamic between the two regions stems from sequencing. In several Asian economies, export-oriented industrialization and skills development have reinforced each other mutually, according to different sequences and outcomes. In several Asian economies, industrial policies and skills development have been coordinated, with variable and sometimes anticipatory sequences. Businesses participated in defining curricula and sometimes in their financing.

This model of co-construction between industry and training produces two simultaneous effects. Access to skilled employment can reinforce interest in training and influence mobility decisions. Sectoral skill shortages exist in certain countries, but no proof confirms a regular excess of industrial demand across all of Asia-Pacific. The projected CAGR measures estimated growth of the TVET market according to Cognitive Market Research; it does not demonstrate a causal relationship with employment or wage premiums.

In some Latin American countries, training development preceded that of certain productive sectors. In several countries, governments expanded access to vocational training while the capacity to absorb graduates varied by sector. The result is a supply of skills searching for its demand, and sometimes finding it abroad. This does not mean that the expansion of training was a mistake: a trained population remains an asset, even if its deployment takes time. But it means that training alone is not enough to create the expected value if the economy does not evolve in parallel.

Europe, Interior Mirror of the Same Paradox

Latin America is not alone in this situation. Within the European Union itself, the mechanism is identical — simply rendered invisible by freedom of movement. The European Commission has identified 82 regions representing nearly 30 percent of the European population as struck by what it calls the “talent development trap”: territories unable to compensate for the loss of trained working-age population by the departure of their graduates to more dynamic economies on the continent. These regions are concentrated mainly in southern Italy, Romania, Bulgaria, Hungary, and parts of eastern Germany.

Romania is its most striking illustration. Approximately one-fifth of its working-age population now resides in another EU country. The majority have not returned. Departures concern all categories: engineers to nurses, doctors to maintenance technicians. Former Romanian Prime Minister Emil Boc summed it up bluntly: “The most skilled workforce in our country now works in the European Union.” The result is an inability to build infrastructure, to staff hospitals, to maintain schools. The public budget financed the training; the German, Spanish, or Italian economy reaps the benefits.

This phenomenon bears a European specificity compared to the Latin American case: mobility is here institutionalized, without legal barriers. Free movement — a fundamental advantage of the single market — creates competition between member economies to retain their own graduates. Wage gaps within the EU are sufficient to trigger massive flows. Gross salaries in Switzerland for equivalent positions exceed those practiced in Germany by 30 to 50 percent; the gap between Germany and Romania is even more pronounced. Even Germany, often cited as a model for dual vocational training, posted a net negative balance of its own nationals in 2024. The European Commission launched a “Talent Boost Mechanism” in 2023, a pilot program aimed at supporting regions in difficulty to train, retain, and attract qualified populations. This is institutional recognition that the single market produces, in its margins, exactly the same dynamic as between Latin America and North America.

The European response to this paradox is moreover partly symmetrical to that being experimented with in Latin America: co-construction of training with employers, conditioning certifications to local market needs, diploma portability. Germany modified its skilled worker immigration law in 2023 to facilitate entry of persons holding non-German professional qualifications. It attracts technicians trained outside the EU to fill deficits left by its own internal migrations. The loop is complete: peripheral regions train, centers absorb, centers themselves recruit elsewhere to compensate.

The European case introduces an additional variable absent from Latin American debate: demographic aging. With working-age populations shrinking in virtually all member states, pressure on training systems intensifies at the very moment departures accelerate. Training needs do not decline; pools of trained workers are becoming scarce. Romania and Bulgaria export their graduates and now import less qualified workers from third countries to cover execution positions. The brain drain problem thus shifts lower down the migration chain, generating cascading instability.

Reforms Attempting to Close the Gap

Several countries in the region are tackling the problem head-on. Mexico has multiplied alternating training agreements with industrial groups, particularly in the northern manufacturing corridors linked to North American supply chains. Brazil has restructured part of its SENAI system, the national industrial training network, one of the largest in Latin America, to tighten links between curricula and demands of local companies. Colombia is experimenting with training contracts conditioned on hiring commitments from employers.

Employer involvement in training design can improve relevance and job placement, but wage premiums also depend on productivity, labor demand, and institutions. When a company co-constructs a curriculum, it implicitly commits to valuing the diploma it produces. This mechanism, well documented in German and Swiss apprenticeship models, is difficult to transpose to contexts where the fabric of formal businesses is less dense. Informal SMEs, which represent a significant share of employment in Latin America, participate little in these schemes, lacking administrative capacity or sufficient planning horizons.

The digital question opens another gap. Technical skills related to automation, maintenance of connected systems, or industrial data management are in strong demand across all sectors, including those that dominate Latin America: agro-industry, mining, logistics. The diffusion of AI in productive processes creates demand for hybrid technical profiles that traditional TVET systems do not yet train enough. This is terrain on which Latin America could narrow the wage premium gap, if the digital transformation of its productive apparatus accelerates fast enough.

What Is at Stake by 2035: Absorbing Graduates or Continuing to Export Them

The central challenge by 2035 is one of pace. Countries can seek to increase productive and skilled jobs to improve local prospects for graduates, without assuming that international mobility must be eliminated.

Two opposite dynamics are plausible. In a first scenario, regional industrial policies succeed in anchoring new value chains. The energy transition offers a concrete opportunity: Chilean lithium, and potentially Bolivian if projects become viable, can support battery value chains; local refining could increase the value captured by the region. Brazilian solar capacities constitute an important asset for producing low-carbon electricity; they can support local value chains, but do not constitute extraction. Local transformation and moving up the value chain can increase demand for specialized technical skills, depending on value chains actually developed and industrial policies implemented.

An increase in relative demand for certain skills can exert upward pressure on wages, but the effect is neither automatic nor uniform.

Selective migration would slow. The conditions for a virtuous training-employment-retention circle would be met.

In a second scenario, partial deindustrialization continues, foreign direct investments in the manufacturing sector remain concentrated on low-skill-intensive assembly enclaves, and the fabric of formal SMEs does not densify sufficiently. Some technical graduates can find different professional prospects abroad than those offered on the local market. The evolution of pay gaps will depend on productive transformations, labor demand, and institutions in each region. Emigration of people trained with public funds can reduce the national return on this investment, but it does not necessarily constitute a net and permanent transfer to other economies.

Three signals would allow distinguishing which of these trajectories gains the upper hand. The first is the share of manufacturing exports in regional GDP: if it progresses, an indicator that ECLAC regularly follows in its productive diversification analyses, the industrial fabric moves up the value chain. The second is the participation of private businesses in training financing, a measure of their real commitment to valuing graduates. The third, slower but decisive, is the evolution of pay gaps associated with certain training, which employment surveys can allow estimating without ensuring uniform and systematic monitoring of TVET premiums in all countries.

If this gap with Asia-Pacific begins to narrow, even modestly, it means the local skilled labor market is finally responding to its own training supply.

The collective needs that traverse both scenarios remain the same: labor market information systems sufficiently refined to anticipate missing skills before they become so; tax incentives for business training that reach down to formal SMEs; and regional cooperation on certification portability, which would allow TVET diplomas to be valued within the continent itself without resorting to transoceanic emigration. The OECD and the IDB are working on these projects with several governments in the region. The implementation pace remains the principal limiting factor.

The Diaspora as a Potential Asset

There exists a third path, often underestimated in the brain drain debate. Skilled workers who emigrate do not always sever ties with their country of origin. They send financial transfers; remittances represent a significant share of GDP for several Central American and Caribbean countries. They accumulate skills in more advanced industrial environments. And some return, bearing networks and expertise acquired abroad.

Some Asian countries have successfully exploited this cycle. South Korea actively facilitated, in the 1980s and 1990s, the return of its scientific and technical diaspora after stays in the United States and Japan. Taiwan built part of its semiconductor industry on this model of qualified returns. India maintains institutional links with its technological diaspora in Silicon Valley. These examples show that skilled worker emigration can be, under certain conditions, a phase of human capital accumulation at the national scale, provided that return conditions are made attractive.

For Latin America, this option remains little exploited. Qualified talent return programs exist, Mexico’s SARE program, Brazilian researcher reintegration schemes, but they target mainly university graduates and scientists, rarely technicians and TVET graduates. Expanding these schemes to vocational training would require recognizing that the technician trained abroad also represents capital the country has interest in repatriating. This is a reorientation of public policy modest in cost, potentially significant in impact.

Peripheral Europe is only beginning to explore this path. Studies suggest that returning migrants do not merely fill positions: they bring savings, professional networks, and skills acquired in more demanding environments, constituting a disproportionately valuable resource for economies that manage to attract them. Still, one must build this attractiveness — something most regions losing talent have not yet managed.

Some technicians trained in Latin America will work elsewhere. The challenge of the coming decade is to organize this temporary exile of skills to make it a step in an upgrading cycle, rather than a definitive and imposed flow. For this, vocational training must be part of a coherent industrial strategy and no longer be treated as an isolated education policy. This articulation is made more urgent by climate shocks and their economic costs, which are redesigning the sectors where tomorrow’s skilled jobs will be created.

Sources

  1. Cognitive Market Research – TVET Market Report
  2. International Organization for Migration – World Migration Report (LAC data): https://worldmigrationreport.iom.int
  3. World Bank – Skilled migration and labor markets in Latin America and the Caribbean: https://www.worldbank.org
  4. ECLAC – Reports on talent flows and productive diversification in Latin America: https://www.cepal.org
  5. OECD – Skills Outlook and vocational training (comparative APAC/LAC data): https://www.oecd.org/skills
  6. European Commission – Talent Boost Mechanism and reports on talent-loss regions: https://ec.europa.eu
  7. Euronews / InfoMigrants – Data on intra-EU migration of skilled workers, 2024-2026