Learning and Earning: Evidence from a Randomized Evaluation in India

This paper examines the economic returns from participating in a subsidized vocational education program in stitching and tailoring offered to women residing in certain disadvantaged areas of New Delhi, India. The availability of pre and post-training data in an experimental framework allows us to measure the impact of participating in this program on a broad range of outcomes. In less than a year, the program has generated substantial improvement in labor market outcomes for these women. In particular, we find that women who were randomly offered the training program are almost five percentage points more likely to be employed, six percentage points more likely to look for a job, on an average work two additional hours, and earn almost twice as much in the post-training period compared to women who were not offered the training. There is a also a large increase in the ownership of sewing machine in the post-training period. The program impacts are much larger for women who completed the training program. Women assigned to the training program have also gained in the form of increased relative confidence. Further, the impact estimates vary with participants' intrinsic preferences for risk, competition, and confidence. Finally, a simple cost-benefit analysis suggests that the program is highly cost effective and that there are considerable gains from both continuing the program in the current location and replicating it in different locations.