Supporting a 21st Century Workforce in Puerto Rico

Challenges and Options for Improving Puerto Rico's Workforce System Following Hurricanes Irma and Maria in 2017

by Gabriella C. Gonzalez, Kathryn A. Edwards, Melanie A. Zaber, Megan Andrew, Aaron Strong, Craig A. Bond

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Research Questions

  1. What are the short-term, acute workforce issues in Puerto Rico that could make implementing hurricane recovery more difficult?
  2. What are the long-term, structural workforce issues in Puerto Rico that could limit economic growth spurred by hurricane recovery?
  3. What are the skills needed for key occupations in the short- and long-term and what training and education infrastructure do they require?
  4. What factors could impede participating in training and education programs?
  5. Where are viable sources of funding for training and education programs?
  6. What would be the long-term plan for ensuring sustainability of the trained local talent pool in Puerto Rico?

One strategic goal in the post-hurricane recovery plan for Puerto Rico is the development of a modern workforce with relevant skills to meet the demands of an evolving labor market. To begin, Puerto Rico must first overcome the acute workforce challenges and structural problems that have impeded economic growth for more than a decade. The authors set out a course of action that strengthens the K–12 and post-secondary education and training system, develops career pathways for individual workers that would improve their employment trajectories, and better aligns workers' skills with employment opportunities and the needs of local businesses.

More specifically, the authors present four strategies to address short-term workforce shortages and needs. A critical fifth strategy then reimagines Puerto Rico's entire workforce development system to support Puerto Rico's economic development and community well-being. This longer-term strategy can be implemented in tandem with any of the short-term strategies, depending on which strategies the government of Puerto Rico decides to implement. Any long-term workforce development policies or strategies must, however, encompass training and education across the spectrum of education levels, from high school diplomas to technical certificates to master's degree and higher. The report includes recommendations to improve Puerto Rico's workforce development system cross-industry and specific recommendations for construction, health care, energy, and education industries. With government-industry-education planning, these longer-term policies and initiatives could better link job opportunities by municipality, occupation, and industry and ultimately propel economic development in Puerto Rico.

Key Findings

At every age and education level, labor force participation in Puerto Rico is lower than the U.S. overall

  • Younger workers and less educated workers especially have low participation rates.
  • Puerto Rico has extensive informal employment.

There are numerous challenges to broad workforce development policy in Puerto Rico

  • Puerto Rico experiences fluctuating outmigration rates relative to the continental U.S. which are of particular concern in skilled industries such as healthcare.
  • Although cost of living is lower in Puerto Rico, nearly all jobs pay more in the continental U.S., and certain jobs have much higher pay.

The postsecondary education system has issues of affordability and fragmentation

  • Puerto Rico has a large, public four-year university system with highly subsidized tuition; however, it is still unaffordable to a broad swath of Puerto Rico's population.
  • Puerto Rico does not have a large, public two-year university system, and instead a high number of for-profit colleges.

Education and training opportunities for occupations in high demand are not well aligned

  • Any long-term workforce development policies or strategies must therefore encompass training and education across the spectrum of education levels.
  • Lack of clarity and uniformity here jeopardizes the value of an individual's training and education credentials and in turn makes it difficult to gauge the returns on human capital investment.

Recommendations

  • Let the market guide workforce development. Job openings and wage levels can guide individuals toward optimal training and employment outcomes. This strategy relies on private businesses and nonprofits and requires little to no local government capacity to implement.
  • Contract a skilled and experienced workforce temporarily from the continental United States. In this way, Puerto Rico can address immediate recovery construction needs while avoiding more intensive investments. These contracts might incentivize the hiring of local construction workers whenever possible.
  • Train Puerto Rico workers remotely in the continental United States. This requires tuition support from the government of Puerto Rico but fewer direct investments in workforce development infrastructure. It leverages existing expertise in hurricane reconstruction and recovery from states such as Texas, Louisiana, and Florida and provides a skilled construction workforce in the short term.
  • Implement short-term career and technical training opportunities in Puerto Rico, which could develop a local labor force in high-demand occupations and provide viable career pathways for Puerto Rico residents.
  • A longer-term effort would be to implement a comprehensive workforce development system. Key activities include setting up workforce training "centers of excellence" in strategically selected geographic areas, encouraging industry and education sectors to collaborate to develop career pathways and supply-demand analyses, and designing a K–14 education system that would develop a pipeline of talent and support on-the-job experiences (internships or apprenticeships) for youth and jobseekers.
  • Once policy options are selected, the government should develop an implementation plan with a communication strategy and conduct continuous monitoring to assess effectiveness.

Table of Contents

  • Chapter One:

    Introduction

  • Chapter Two:

    Historical Context and Current Challenges for the Workforce System in Puerto Rico

  • Chapter Three:

    Acute Workforce Needs as Puerto Rico Recovers from Hurricanes Irma and Maria

  • Chapter Four:

    Macro Estimates of Labor Supply Constraints to Puerto Rico's Recovery

  • Chapter Five:

    Strategies for Developing a Workforce in Puerto Rico to Meet Short- and Long-Term Needs

  • Chapter Six:

    Implementing the Workforce Development System Framework to Support a 21st-Century Workforce in Puerto Rico

  • Chapter Seven:

    Conclusions

  • Appendix A:

    Full Text of Economic Team's Implement Workforce Development Programs COA

  • Appendix B:

    Data Sources and Analytic Approaches

  • Appendix C:

    Postsecondary Institutions in Puerto Rico, December 2018

  • Appendix D:

    Recommendation to Improve Puerto Rico's Workforce Development System by Industry

Research conducted by

This research was sponsored by FEMA and conducted within the Strategy, Policy and Operations Program of the Homeland Security Operational Analysis Center.

This report is part of the RAND Corporation research report series. RAND reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.