World Bank Group2015-03-092015-03-092014-10https://hdl.handle.net/10986/21555Recent media reports of a perceived skills problem in Lao PDR have spurred an intense focus on skills development initiatives. Alarming media coverage of rising wages and complaints among firms of a shortage of skilled workers has raised concerns over whether Lao workers are equipped with the skills sought by firms. The Government and other partners have responded by channeling more resources to skills development, for example with investments in vocational training facilities to train more workers. This report argues that the workforce problems which Lao PDR faces do not only stem from problems in the education sector. Looking only to skills development as a solution would not address the fundamental problems constraining economic growth, employment creation, and poverty reduction. Creating an environment conducive for farm and non-farm businesses to make investments and grow remains an essential first step for skills development. As World Bank (2004) states, Training does not create jobs. Skills are a derived demand and that demand depends on policies for growth and employment creation.en-USCC BY 3.0 IGOACCOUNTINGAGRICULTUREBASIC LITERACYCHEMICAL FERTILIZERSCHILD LABORCOMPETITIVENESSCONSUMERSDEFLATORSDEMOGRAPHIC TRANSITIONDEREGULATIONDEVELOPMENT POLICIESDEVELOPMENT PROCESSESDEVELOPMENT STRATEGYDOMESTIC WORKERSDRIVERSEARNINGECONOMIC BOOMECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC STRUCTUREEMPLOYMENT SHAREEMPLOYMENT SITUATIONEXPANDING EMPLOYMENT OPPORTUNITIESEXPORTSFINDING EMPLOYMENTFOREIGN WORKERSFORESTRYGDPGDP DEFLATORGDP PER CAPITAGROSS DOMESTIC PRODUCTGROWTH RATEHEALTH SERVICESHIGH WAGEHOUSEHOLD SURVEYHOUSEHOLD SURVEYSHOUSINGHUMAN CAPITALHUMAN RESOURCEHUMAN RESOURCE DEVELOPMENTINCOMEINCOME DISTRIBUTIONINTERNATIONAL MARKETSJOB CREATIONJOBSLABOR COSTSLABOR FORCELABOR MARKETLABOR MARKET DEMANDLABOR MARKET INDICATORSLABOR MOVEMENTLABOR MOVEMENTSLABOR PRODUCTIVITYLABOR PRODUCTIVITY GROWTHLABOR SHORTAGELABOURLEGISLATIONLIVING STANDARDSMANUFACTURING WAGESMIGRATIONMINIMUM WAGEMOTIVATIONNATURAL RESOURCESNON-FARM SECTORON-THE-JOB TRAININGPRICE CEILINGSPRICE CONTROLSPRIVATE SECTORPRIVATE SECTOR FIRMSPRODUCERSPRODUCTION COSTSPRODUCTIVE EMPLOYMENTPRODUCTIVITY GAINSPRODUCTIVITY INCREASESPROFITABILITYPROPERTY RIGHTSPSEPUBLIC EXPENDITURESPUBLIC GOODSREAL WAGESRURAL LABORRURAL WORKERSSECONDARY SCHOOL EDUCATIONSERVICE PROVIDERSSERVICE SECTORSKILLED WORKERSSKILLS ASSESSMENTSKILLS DEVELOPMENTSTRUCTURAL CHANGETAXATIONTECHNOLOGICAL INNOVATIONSTOTAL EMPLOYMENTTOTAL FACTOR PRODUCTIVITYTRADE FLOWSTRADE POLICYTRAINING MATERIALSTRAINING SYSTEMTRANSACTION COSTSUNSKILLED WORKERSVALUE ADDEDVOCATIONAL EDUCATIONVOCATIONAL SCHOOLVOCATIONAL TRAININGWAGE INCREASESWAGE PREMIUMWAGE RATESWEALTHWORK EXPERIENCEWORKERWORKERSWORKFORCE SKILLSWORKING HOURSWORLD TRADE ORGANIZATIONWTOYOUNG WORKERSYOUTH UNEMPLOYMENT10.1596/21555