Labor Market Supply and Demand in El Salvador, Guatemala, and Honduras: Leveraging Data to Build an Efficient Labor Market

The Salvadoran, Guatemalan, and Honduran economies face multiple labor market barriers, including economic stagnation, labor market inefficiency and segmentation, and gang violence. These barriers force prime-age workers to seek opportunities elsewhere. These countries lack adequate labor market information (LMI) systems to promote efficient labor market transactions and clearing which would break down market barriers and help stem outmigration.

Through a grant from the U.S. Department of Labor’s International Labor Affairs Bureau, AIR implemented the project Labor Market Supply and Demand in El Salvador, Guatemala, and Honduras: Leveraging Data to Build an Efficient Labor Market. Through this project, AIR worked with each country to produce reliable, comprehensive, and high-quality labor market information. These systems will enable prospective employees to access relevant information about potential jobs while also providing employers with the information they need to quickly and effectively fill open positions with skilled workers.

One of the main components of this project was to facilitate the creation of a pilot establishment survey that captured labor demand data in high-growth economic sectors. AIR partnered with local private sector institutions to implement pilot establishment surveys in the tourism and food and beverage production sectors in each of the three countries (see below). The information collected in these surveys is a critical input for vocational training and educational institutions to update their curricula to match the current needs of the labor market and thus improve the job prospects and earning potential of their graduates.