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Training Disadvantaged Youth in Latin America: Evidence from a Randomized Trial

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  • Orazio Attanasio
  • Adriana Kugler
  • Costas Meghir

Abstract

Youth unemployment in Latin America is exceptionally high, as much as 50% among the poor. Vocational training may be the best chance to help unemployed young people at the bottom of the income distribution. This paper evaluates the impact of a randomized training program for disadvantaged youth introduced in Colombia in 2005 on the employment and earnings of trainees. This is one of a couple of randomized training trials conducted in developing countries and, thus, offers a unique opportunity to examine the causal impact of training in a developing country context. We use originally collected data on individuals randomly offered and not offered training. We find that the program raises earnings and employment for both men and women, with larger effects on women. Women offered training earn about 18% more than those not offered training, while men offered training earn about 8% more than men not offered training. Much of the earnings increases for both men and women are related to increased employment in formal sector jobs following training. The benefits of training are greater when individuals spend more time doing on-the-job training, while hours of training in the classroom have no impact on the returns to training. Cost-benefit analysis of these results suggests that the program generates a large net gain, especially for women.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13931.

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Date of creation: Apr 2008
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Handle: RePEc:nbr:nberwo:13931

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  1. Card, David & Sullivan, Daniel G, 1988. "Measuring the Effect of Subsidized Training Programs on Movements in and out of Employment," Econometrica, Econometric Society, vol. 56(3), pages 497-530, May.
  2. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-20, September.
  3. Víctor Elías & Fernanda Ruiz Núñez & Ricardo Cossa & David Bravo, 2004. "An Econometric Cost-Benefit Analysis of Argentina's Youth Training Program," Research Department Publications 3174, Inter-American Development Bank, Research Department.
  4. Richard Blundell & Amanda Gosling & Hidehiko Ichimura & Costas Meghir, 2007. "Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds," Econometrica, Econometric Society, vol. 75(2), pages 323-363, 03.
  5. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
  6. David Card & Pablo Ibarraran & Ferdinando Regalia & David Rosas & Yuri Soares, 2007. "The Labor Market Impacts of Youth Training in the Dominican Republic: Evidence from a Randomized Evaluation," NBER Working Papers 12883, National Bureau of Economic Research, Inc.
  7. Indermit Gill & Claudio E. Montenegro & Dorte Domeland, 2002. "Crafting Labor Policy : Techniques and Lessons from Latin America," World Bank Publications, The World Bank, number 15245.
  8. John Burghardt & Peter Z. Schochet, 2001. "National Job Corps Study: Impacts by Center Characteristics," Mathematica Policy Research Reports 2950, Mathematica Policy Research.
  9. Angel Calderon Madrid, 2006. "Revisiting the Employability Effects of Training Programs for the Unemployed in Developing Countries," Research Department Publications 3224, Inter-American Development Bank, Research Department.
  10. Angel Calderón Madrid, 2006. "Revisiting the Employability Effects of Training Programs for the Unemployed in Developing Countries," IDB Publications 43258, Inter-American Development Bank.
  11. Petra E. Todd & Jeffrey A. Smith, 2001. "Reconciling Conflicting Evidence on the Performance of Propensity-Score Matching Methods," American Economic Review, American Economic Association, vol. 91(2), pages 112-118, May.
  12. Kugler, Adriana D., 2005. "Wage-shifting effects of severance payments savings accounts in Colombia," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 487-500, February.
  13. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2001. "Evaluating the employment impact of a mandatory job search assistance program," IFS Working Papers W01/20, Institute for Fiscal Studies.
  14. Alberto E. Chong & José Galdo, 2006. "Training Quality and Earnings: The Effects of Competition on the Provision of Public-Sponsored Training Programs," IDB Publications 43678, Inter-American Development Bank.
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Cited by:
  1. World Bank, 2012. "Resilience, Equity, and Opportunity," World Bank Other Operational Studies 12648, The World Bank.
  2. Monazza Aslam & Shenila Rawal, 2013. "Preparing Women of Substance? Education, Training, and Labor Market Outcomes for Women in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 18(Special E), pages 93-128, September.
  3. Blattman, Christopher & Fiala, Nathan & Martinez, Sebastian, 2011. "Employment generation in rural Africa : mid-term results from an experimental evaluation of the Youth Opportunities Program in Northern Uganda," Social Protection Discussion Papers 66523, The World Bank.
  4. Adoho, Franck & Chakravarty, Shubha & Korkoyah, Jr, Dala T. & Lundberg, Mattias & Tasneem, Afia, 2014. "The impact of an adolescent girls employment program : the EPAG project in Liberia," Policy Research Working Paper Series 6832, The World Bank.
  5. Lorenzo Moreno & Larissa Campuzano & Dan Levy & Randall Blair, 2009. "Hacia el Cierre de la Brecha en la Evaluación: Lecciones sobre Tres Recientes Evaluaciones de Impacto de Programas Sociales en América Latina y el Caribe," Mathematica Policy Research Reports 6606, Mathematica Policy Research.
  6. Mauricio Santa María S. & Carlos Felipe Prada L. & Ana Virginia Mujica P., 2009. "Oportunidades, desafíos y barreras de la movilidad laboral en Colombia: reflexiones para la población en pobreza extrema y moderada," WORKING PAPERS SERIES. DOCUMENTOS DE TRABAJO 009187, FEDESARROLLO.
  7. Crombrugghe Denis de & Espinoza Henry & Heijke Hans, 2010. "Job-training programmes with low completion rates: The case of Projoven-Peru," ROA Research Memorandum 004, Maastricht University, Research Centre for Education and the Labour Market (ROA).

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