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Training Quality and Earnings: The Effects of Competition on the Provision of Public-Sponsored Training Programs

Author

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  • Chong, Alberto E.
  • Galdo, José

Abstract

This paper evaluates the effectiveness of market-based approaches in the provision of public-sponsored training programs. In particular, we study the link between training quality and labor earnings using a Peruvian program that targets disadvantaged youths. Multiple proxies for training quality are identified from bidding processes in which public and private training institutions that operate for profit compete for limited public funding. Using difference-in-differences kernel matching and standard regression-based approaches, we find that beneficiaries attending high-quality training courses have higher average and marginal treatment impacts. These earnings differentials are larger for females rather than males, and are larger in the medium term rather than in the short run. External validity was assessed by using five different cohorts of individuals over an eight-year period.

Suggested Citation

  • Chong, Alberto E. & Galdo, José, 2006. "Training Quality and Earnings: The Effects of Competition on the Provision of Public-Sponsored Training Programs," IDB Publications (Working Papers) 3297, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:3297
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    Cited by:

    1. Verónica Escudero & Jochen Kluve & Elva López Mourelo & Clemente Pignatti, 2019. "Active Labour Market Programmes in Latin America and the Caribbean: Evidence from a Meta-Analysis," Journal of Development Studies, Taylor & Francis Journals, vol. 55(12), pages 2644-2661, December.
    2. Orazio Attanasio & Adriana Kugler & Costas Meghir, 2008. "Training Disadvantaged Youth in Latin America: Evidence from a Randomized Trial," NBER Working Papers 13931, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    training quality; earnings; bidding; matching methods;
    All these keywords.

    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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