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Vocational training programs and youth labor market outcomes: Evidence from Nepal

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  • Shubha Chakravarty
  • Mattias Lundberg
  • Plamen Nikolov
  • Juliane Zenker

Abstract

Lack of skills is arguably one of the most important determinants of high levels of unemployment and poverty. In response, policymakers often initiate vocational training programs in effort to enhance skill formation among the youth. Using a regression-discontinuity design, we examine a large youth training intervention in Nepal. We find, twelve months after the start of the training program, that the intervention generated an increase in non-farm employment of 10 percentage points (ITT estimates) and up to 31 percentage points for program compliers (LATE estimates). We also detect sizable gains in monthly earnings. Women who start self-employment activities inside their homes largely drive these impacts. We argue that low baseline educational levels and non-farm employment levels and Nepal's social and cultural norms towards women drive our large program impacts. Our results suggest that the program enables otherwise underemployed women to earn an income while staying at home - close to household errands and in line with the socio-cultural norms that prevent them from taking up employment outside the house.

Suggested Citation

  • Shubha Chakravarty & Mattias Lundberg & Plamen Nikolov & Juliane Zenker, 2019. "Vocational training programs and youth labor market outcomes: Evidence from Nepal," Framed Field Experiments 00678, The Field Experiments Website.
  • Handle: RePEc:feb:framed:00678
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    2. David McKenzie, 2017. "How Effective Are Active Labor Market Policies in Developing Countries? A Critical Review of Recent Evidence," The World Bank Research Observer, World Bank, vol. 32(2), pages 127-154.
    3. Chakravarty,Shubha & Lundberg,Mattias K. A. & Nikolov, Plamen V. & Zenker,Juliane & Chakravarty,Shubha & Lundberg,Mattias K. A. & Zenker,Juliane & Nikolov, Plamen V., 2016. "The role of training programs for youth employment in Nepal : impact evaluation report on the employment fund," Policy Research Working Paper Series 7656, The World Bank.
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    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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