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Training Disadvantaged Youth in Latin America: Evidence from a Randomized Trial

Author

Listed:
  • Orazio Attanasio
  • Adriana Kugler
  • Costas Meghir

Abstract

Youth unemployment in Latin America is exceptionally high, as much as 50% among the poor. Vocational training may be the best chance to help unemployed young people at the bottom of the income distribution. This paper evaluates the impact of a randomized training program for disadvantaged youth introduced in Colombia in 2005 on the employment and earnings of trainees. This is one of a couple of randomized training trials conducted in developing countries and, thus, offers a unique opportunity to examine the causal impact of training in a developing country context. We use originally collected data on individuals randomly offered and not offered training. We find that the program raises earnings and employment for both men and women, with larger effects on women. Women offered training earn about 18% more than those not offered training, while men offered training earn about 8% more than men not offered training. Much of the earnings increases for both men and women are related to increased employment in formal sector jobs following training. The benefits of training are greater when individuals spend more time doing on-the-job training, while hours of training in the classroom have no impact on the returns to training. Cost-benefit analysis of these results suggests that the program generates a large net gain, especially for women.

Suggested Citation

  • 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.
  • Handle: RePEc:nbr:nberwo:13931
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    References listed on IDEAS

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    1. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-620, September.
    2. Richard Blundell & Amanda Gosling & Hidehiko Ichimura & Costas Meghir, 2007. "Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds," Econometrica, Econometric Society, vol. 75(2), pages 323-363, March.
    3. Angel Calderón Madrid, 2006. "Revisiting the Employability Effects of Training Programs for the Unemployed in Developing Countries," IDB Publications (Working Papers) 43258, Inter-American Development Bank.
    4. Indermit Gill & Claudio E. Montenegro & Dorte Domeland, 2002. "Crafting Labor Policy : Techniques and Lessons from Latin America," World Bank Publications, The World Bank, number 15245, September.
    5. Víctor Elías & Fernanda Ruiz Núñez & Ricardo Cossa & David Bravo, 2004. "An Econometric Cost-Benefit Analysis of Argentina's Youth Training Program," Research Department Publications 3174, Inter-American Development Bank, Research Department.
    6. Petra E. Todd & Jeffrey A. Smith, 2001. "Reconciling Conflicting Evidence on the Performance of Propensity-Score Matching Methods," American Economic Review, American Economic Association, vol. 91(2), pages 112-118, May.
    7. Alberto E. Chong & José Galdo, 2006. "Training Quality and Earnings: The Effects of Competition on the Provision of Public-Sponsored Training Programs," IDB Publications (Working Papers) 43678, Inter-American Development Bank.
    8. 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.
    9. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2001. "Evaluating the employment impact of a mandatory job search assistance program," IFS Working Papers W01/20, Institute for Fiscal Studies.
    10. Angel Calderon Madrid, 2006. "Revisiting the Employability Effects of Training Programs for the Unemployed in Developing Countries," Research Department Publications 3224, Inter-American Development Bank, Research Department.
    11. Kugler, Adriana D., 2005. "Wage-shifting effects of severance payments savings accounts in Colombia," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 487-500, February.
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    13. Card, David & Sullivan, Daniel G, 1988. "Measuring the Effect of Subsidized Training Programs on Movements in and out of Employment," Econometrica, Econometric Society, vol. 56(3), pages 497-530, May.
    14. Angel Calderón Madrid, 2006. "Revisiting the Employability Effects of Training Programs for the Unemployed in Developing Countries," IDB Publications (Working Papers) 3254, Inter-American Development Bank.
    15. Alberto E. Chong & José Galdo, 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.
    16. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
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    Cited by:

    1. Monazza Aslam & Shenila Rawal, 2013. "Preparing Women of Substance? Education, Training, and Labor Market Outcomes for Women in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 18(Special E), pages 93-128, September.
    2. Blattman, Christopher & Fiala, Nathan & Martinez, Sebastian, 2011. "Employment generation in rural Africa : mid-term results from an experimental evaluation of the Youth Opportunities Program in Northern Uganda," Social Protection and Labor Policy and Technical Notes 66523, The World Bank.
    3. repec:mpr:mprres:6606 is not listed on IDEAS
    4. World Bank, 2012. "Resilience, Equity, and Opportunity
      [Capacidad de recuperación, equidad y oportunidades]
      ," World Bank Other Operational Studies 12648, The World Bank.
    5. Crombrugghe Denis de & Espinoza Henry & Heijke Hans, 2010. "Job-training programmes with low completion rates: The case of Projoven-Peru," ROA Research Memorandum 004, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    6. Lahcen Achy & Khalid Sekkat, 2011. "Training, New Equipment and Job Creation: A Firm-level Analysis using Moroccan Data," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 23(4), pages 615-629, September.
    7. Adoho, Franck & Chakravarty, Shubha & Korkoyah, Jr, Dala T. & Lundberg, Mattias & Tasneem, Afia, 2014. "The impact of an adolescent girls employment program : the EPAG project in Liberia," Policy Research Working Paper Series 6832, The World Bank.
    8. Maria Laura Sánchez Puerta & Alexandria Valerio & Marcela Gutiérrez Bernal, 2016. "Taking Stock of Programs to Develop Socioemotional Skills," World Bank Publications, The World Bank, number 24737, September.
    9. Lorenzo Moreno & Larissa Campuzano & Dan Levy & Randall Blair, 2009. "Hacia el Cierre de la Brecha en la Evaluacin Lecciones sobre Tres Recientes Evaluaciones de Impacto de Programas Sociales en Amrica Latina y el Caribe," Mathematica Policy Research Reports 67f7ac69c2364f088fd322a34, Mathematica Policy Research.
    10. Shubha Chakravarty & Mattias Lundberg & Plamen Nikolov & Juliane Zenker, 2017. "Vocational Training Programs and Youth Labor Market Outcomes: Evidence from Nepal," Working Papers 2017-056, Human Capital and Economic Opportunity Working Group.
    11. 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.
    12. Mauricio Santa María S. & Carlos Felipe Prada L. & Ana Virginia Mujica P., 2009. "Oportunidades, desafíos y barreras de la movilidad laboral en Colombia: reflexiones para la población en pobreza extrema y moderada," WORKING PAPERS SERIES. DOCUMENTOS DE TRABAJO 009187, FEDESARROLLO.
    13. Peter J. Glick & Crystal Huang & Nelly Mejia, 2015. "The Private Sector and Youth Skills and Employment Programs in Low and Middle-Income Countries," World Bank Other Operational Studies 23260, The World Bank.

    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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