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Soft skills or hard cash ? the impact of training and wage subsidy programs on female youth employment in Jordan

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Author Info

  • Groh, Matthew
  • Krishnan, Nandini
  • McKenzie, David
  • Vishwanath, Tara

Abstract

Throughout the Middle East, unemployment rates of educated youth have been persistently high and female labor force participation, low. This paper studies the impact of a randomized experiment in Jordan designed to assist female community college graduates find employment. One randomly chosen group of graduates was given a voucher that would pay an employer a subsidy equivalent to the minimum wage for up to 6 months if they hired the graduate; a second group was invited to attend 45 hours of employability skills training designed to provide them with the soft skills employers say graduates often lack; a third group was offered both interventions; and the fourth group forms the control group. The analysis finds that the job voucher led to a 40 percentage point increase in employment in the short-run, but that most of this employment is not formal, and that the average effect is much smaller and no longer statistically significant 4 months after the voucher period has ended. The voucher does appear to have persistent impacts outside the capital, where it almost doubles the employment rate of graduates, but this appears likely to largely reflect displacement effects. Soft-skills training has no average impact on employment, although again there is a weakly significant impact outside the capital. The authors elicit the expectations of academics and development professionals to demonstrate that these findings are novel and unexpected. The results suggest that wage subsidies can help increase employment in the short term, but are not a panacea for the problems of high urban female youth unemployment.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6141.

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Date of creation: 01 Jul 2012
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Handle: RePEc:wbk:wbrwps:6141

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Related research

Keywords: Tertiary Education; Labor Markets; Labor Policies; Primary Education; Access to Finance;

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References

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  1. Pablo Ibarraran & Laura Ripani & Bibiana Taboada & Juan Villa & Brigida Garcia, 2014. "Life skills, employability and training for disadvantaged youth: Evidence from a randomized evaluation design," IZA Journal of Labor & Development, Springer, Springer, vol. 3(1), pages 1-24, December.
  2. Gary Burtless, 1985. "Are targeted wage subsidies harmful? Evidence from a wage voucher experiment," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 39(1), pages 105-114, October.
  3. Bruno Crépon & Esther Duflo & Marc Gurgand & Roland Rathelot & Philippe Zamora, 2012. "Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment," Working Papers, Centre de Recherche en Economie et Statistique 2012-28, Centre de Recherche en Economie et Statistique.
  4. repec:idb:brikps:publication-detail,7101.html?id=58726 is not listed on IDEAS
  5. Suresh de Mel & David McKenzie & Christopher Woodruff, 2010. "Wage Subsidies for Microenterprises," American Economic Review, American Economic Association, American Economic Association, vol. 100(2), pages 614-18, May.
  6. Jishnu Das & Quy-Toan Do & Jed Friedman & David McKenzie, 2008. "Mental Health Patterns and Consequences: Results from Survey Data in Five Developing Countries," World Bank Economic Review, World Bank Group, World Bank Group, vol. 23(1), pages 31-55, August.
  7. James J. Heckman & Tim D. Kautz, 2012. "Hard Evidence on Soft Skills," NBER Working Papers 18121, National Bureau of Economic Research, Inc.
  8. Emanuela Galasso & Martin Ravallion & Agustin Salvia, 2004. "Assisting the transition from workfare to work: A randomized experiment," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 58(1), pages 128-142, October.
  9. Dubin, Jeffrey A. & Rivers, Douglas, 1993. "Experimental estimates of the impact of wage subsidies," Journal of Econometrics, Elsevier, Elsevier, vol. 56(1-2), pages 219-242, March.
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Cited by:
  1. Ashraf, Nava & Jack, B. Kelsey & Kamenica, Emir, 2013. "Information and subsidies: Complements or substitutes?," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 88(C), pages 133-139.

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