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

  • Orazio Attanasio
  • Adriana Kugler
  • Costas Meghir

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.

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File URL: http://www.nber.org/papers/w13931.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13931.

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Date of creation: Apr 2008
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Handle: RePEc:nbr:nberwo:13931
Note: EFG LS PE
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  1. Blundell, Richard & Gosling, Amanda & Ichimura, Hidehiko & Meghir, Costas, 2004. "Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds," IZA Discussion Papers 1350, Institute for the Study of Labor (IZA).
  2. 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.
  3. 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.
  4. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-20, September.
  5. 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.
  6. repec:mpr:mprres:2950 is not listed on IDEAS
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," NBER Working Papers 6699, National Bureau of Economic Research, Inc.
  12. 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.
  13. 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.
  14. 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.
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