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Skills Training and Employment Outcomes in Rural Bihar

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  • Chakravorty, Bhaskar

    (Erasmus University Rotterdam)

  • Bedi, Arjun S.

    () (ISS, Erasmus University Rotterdam)

Abstract

In a number of countries, youth unemployment is a pressing economic and political concern. In India, 54 percent of the country's population of 1.21 billion is below the age of 25 and faces a high rate of (disguised) unemployment. To augment youth employment, the Government of India has launched a number of skills training programs. This paper deals with participation in and the impact of one of these programs (DDUJKY) located in rural Bihar, one of India's poorest states. The analysis is based on data collected in mid-2016 and compares training participants with non-participants who applied for the scheme but eventually did not attend. We find that the training program squarely reaches the intended target group - rural poor youth. Initially, the program leads to a 29 percentage point increase in the employment rate of the trained graduates. However, two to six months after the training, the employment effect of the program drops to zero. A third of the placed graduates leave their jobs due to caste-based discrimination and another third leave due to a mismatch between the salaries offered and their living costs. The upshot is that while the training program enhances job market prospects, other labor market factors undo the positive effects.

Suggested Citation

  • Chakravorty, Bhaskar & Bedi, Arjun S., 2017. "Skills Training and Employment Outcomes in Rural Bihar," IZA Discussion Papers 10902, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10902
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    References listed on IDEAS

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    1. Pablo Ibarrarán & Laura Ripani & Bibiana Taboada & Juan Miguel Villa & Brígida García, 2012. "Life Skills, Employability and Training for Disadvantage Youth: Evidence from a Randomized Evaluation Design," IDB Publications (Working Papers) 4070, Inter-American Development Bank.
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    4. 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;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-24, December.
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    10. 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.
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    More about this item

    Keywords

    India; Bihar; skills training; youth unemployment;

    JEL classification:

    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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