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Does the quality of public-sponsored training programs matter? Evidence from bidding processes data

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  • Galdo, Jose
  • Chong, Alberto

Abstract

This paper analyzes the link between training quality and labor-market outcomes. Multiple proxies for training quality are identified from bidding processes in which public and private training institutions compete for limited public funding in Peru. Information about exact dates of program enrollment is analyzed to show whether the first-come-first-served assignment rule randomized eligible individuals across courses of varying quality. Generalized propensity score (GPS) is implemented to estimate dose–response functions in the context of multiple treatments. We find that beneficiaries attending high-quality training courses show higher earnings and better job-quality characteristics than either beneficiaries attending low-quality courses or nonparticipants. The returns are particularly robust for women, making the provision of high-quality training services cost-effective. Furthermore, the most important training attribute is expenditures per trainee. Class size and infrastructure are weakly related to the expected impacts, while teacher experience, curricular activities, and market knowledge seem to bear no relationship with the expected impacts. External validity was assessed by using five cohorts of individuals over an eight-year period.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 19 (2012)
Issue (Month): 6 ()
Pages: 970-986

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Handle: RePEc:eee:labeco:v:19:y:2012:i:6:p:970-986

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Web page: http://www.elsevier.com/locate/labeco

Related research

Keywords: Training; Quality; Earnings; Bidding; Propensity scores; Dose–response functions;

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References

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  1. James J. Heckman, 2001. "Micro Data, Heterogeneity, and the Evaluation of Public Policy: Nobel Lecture," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 673-748, August.
  2. Behrman, Jere R & Birdsall, Nancy, 1983. "The Quality of Schooling: Quantity Alone is Misleading," American Economic Review, American Economic Association, vol. 73(5), pages 928-46, December.
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  13. Khandker, Shahidur R., 1990. "Labor market participation, returns to education, and male - female wage differences in Peru," Policy Research Working Paper Series 461, The World Bank.
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  15. Miana Plesca & Jeffrey Smith, 2007. "Evaluating multi-treatment programs: theory and evidence from the U.S. Job Training Partnership Act experiment," Empirical Economics, Springer, vol. 32(2), pages 491-528, May.
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  18. repec:fth:coluec:454 is not listed on IDEAS
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Programas de capacitación y resultados laborales de los jóvenes
    by Guillermo Cruces in Foco Económico on 2014-03-19 21:45:26
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Cited by:
  1. Dammert, Ana C. & Galdo, Jose C., 2013. "Program Quality and Treatment Completion for Youth Training Programs," IZA Discussion Papers 7394, Institute for the Study of Labor (IZA).

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