Latin America and Caribbean

  • How Can Job Opportunities for Young People in Latin America be Improved?

    Gonzalez-Velosa et al (2012)

    Original Abstract:

    Job training programs for vulnerable youth are the main response of Latin American governments to address the problem of inadequate employment opportunities for young people. Despite its importance, knowledge about these programs is scarce. This study contributes to filling this gap in the literature by presenting new evidence on the effectiveness of six of these programs operating or that were implemented in Colombia, Honduras, Mexico, Panama, Peru and Dominican Republic. This analysis uses the results of impact evaluations of these programs and the results of qualitative surveys of young participants and employers, and in-depth interviews to training centers, employers and policy makers. The main results confirm the limited evidence available, namely, that these programs have little impact on the probability of getting a job (although there is a high heterogeneity in these impacts), but a significant impact on job quality. From this analysis, we propose a research agenda to improve knowledge on the functioning and impact of these programs, and provide a series of recommendations to improve the design and increase the effectiveness of youth training programs.

    Intervention settings: Mixed

    Intervention description: Vocational classroom and on-the-job training and job placement.

    Methodology: RCT

    Sample: Youth and adults. Offered to men and women 16-29 years old from lower socioeconomic strata, and those meeting educational and skill requirements of participating firms.

    Findings: 7%-12% increase in employment for women only. Three to seven hours per week increase in weekly hours worked for women only. Especially successful in countries with established private vocational training industry, significant wage employment and high female mobility.

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  • Life Skills, Employability and Training for Disadvantaged Youth: Evidence from a Randomized Evaluation Design

    Ibarraran et al (2012)

    Original Abstract:

    This paper presents an impact evaluation of a revamped version of the Dominican youth training program Juventud y Empleo. The paper analyzes the impact of the program on traditional labor market outcomes and on outcomes related to youth behavior and life style, expectations about the future and socio-emotional skills. In terms of labor market outcomes, the program has a positive impact on job formality for men of about 17 percent and there is also a seven percent increase in monthly earnings among those employed. However, there are no overall impacts on employment rates. Regarding non-labor market outcomes, the program reduces teenage pregnancy by five percentage points in the treatment group (about 45 percent), which is consistent with an overall increase in youth expectations about the future. The program also has a positive impact on non-cognitive skills as measured by three different scales. Scores improve between 0.08 and 0.16 standard deviations with the program. Although recent progress noted in the literature suggests that socio-emotional skills increase employability and quality of employment, the practical significance of the impacts is unclear, as there is only weak evidence that the life skills measures used are associated to better labor market performance. This is an area of growing interest and relevance that requires further research.

    Intervention settings: Mixed

    Intervention description: Vocational classroom and on-the-job training and job placement.

    Methodology: RCT

    Sample: Youth and adults. Offered to men and women 16-29 years old from lower socioeconomic strata, and those meeting educational and skill requirements of participating firms.

    Findings: 7%-12% increase in employment for women only. Three to seven hours per week increase in weekly hours worked for women only. Especially successful in countries with established private vocational training industry, significant wage employment and high female mobility.

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  • The Impact of Training Policies in Latin America and the Caribbean: The Case of Programa Joven

    Aedo and Nunez (2004)

    Original Abstract:

    This research evaluates the "Programa Joven", a training program conducted by the Ministerio del Trabajo of Argentina. We adapt and apply a non-experimental evaluation methodology to answer the following questions: Does "Programa Joven" increase the labor income of the trainees? Does "Programa Joven" increase the probability of being employed? And (3) what is the rate of return to dollars spent on the "Programa Joven"? We used Propensity Scores Matching Estimators as our basic methodology to obtain a measure of the impact of the training program. Our choice of this methodological approach was based upon both the theoretical developments in the area of Program Evaluation and the availability of relevant information. We used three different set of data to estimate the Propensity Scores which allowed us to analyze the question on how sensitive Program impact estimates are to different propensity score specifications? This question has not been addressed by the previous literature. Our results indicate first, that Program impact on earnings were statistically significant for young males and adult females. This result was not sensitive to the number of nearest neighbors. Second, the estimated Program impact on employment was statistically significant for adult females only. Again the result was not sensitive to the number of nearest neighbors. Third, impact estimates on earnings and employment for the groups with statistically significant results were not sensitive to the different sources of information used to estimate the propensity scores. This was a surprising result as we expected to observe greater variability in the impact results across different propensity score specifications. Fourth, the cost-benefit exercise conducted suggest that we required at least 9 years of duration of the earnings impact for the Program to have a positive net present value for the groups with statistically significant results.

    Intervention settings: Rural and urban (across 11 regions)

    Intervention description: Provides an average of 200 hours of training over 14-20 weeks (classroom followed by internship), a monetary subsidy for females with children, transportation expenses, medical checkups, books, materials and work clothing.

    Methodology: Cross-sectional propensity score matching using program beneficiaries and eligible non-participants.

    Sample: Young people from poor households with low education levels and little work experience, who were unemployed or inactive.

    Findings: Positive employment impacts for women of 6% at 12 months, and 15% at 18 months. Beneficiary women generate 93% more labor income than their control counterparts. Decrease in measures of occupational segregation. Negative employment impacts for men.

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  • Medium and Long Run Effects of Nutrition and Child Care: Evaluation of a Community Nursery Programme in Rural Colombia

    Attanasio and Vera-Hernandez (2004)

    Original Abstract:

    In this paper we evaluate the effect of a large nutrition programme in rural Colombia on children nutritional status, school achievement and female labour supply. We find that the programme has very large and positive impacts. Dealing with the endogeneity of treatment is crucial, as the poorest children tend to select into the programme. Methods like Propensity Score Matching would even yield negative estimates of the impact of the program. Our results are robust to the use of instruments that do not depend on individual household choices. We also validate our evaluation strategy by considering the effect of the program on pre-intervention variables. Further, we explore the heterogeneity of the impact of the programme. Children from the poorest backgrounds are the ones that benefit the most.

    Intervention settings: Rural.

    Intervention description: Community nurseries where poor children receive food (purchased by government) and chid care from one of the mothers in the community.

    Methodology: Instrumental variables using distance to nearest center as an instrument.

    Sample: Poor households, based on an eligibility score.

    Findings: Increase in probability of women's employment (0.12 to 0.37) and hours worked (by 75/month.) Positive impact on children's height and grades.

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  • Subsidizing Vocational Training for Disadvantaged Youth in Developing Countries: Evidence from a Randomized Trial

    Attanasio et al (2011)

    Original Abstract:

    This paper evaluates the impact of a randomized training program for disadvantaged youth introduced in Colombia in 2005. This randomized trial offers a unique opportunity to examine the impact of training in developing countries. We use originally collected data on individuals randomly offered and not offered training. The program raises earnings and employment, especially for women. Women offered training earn 18% more and have a 0.05 higher probability of employment than those not offered training, mainly in formal sector jobs. Cost- benefit analysis of these results suggests that the program generates much larger net gains than those found in developed countries.

    Intervention settings: Urban

    Intervention description: Three months in-classroom training and three months of on-the-job training. Courses provided vocational skills in a diverse number of occupations (including taxi and bus drivers, office assistants, call center operators, medical assistants, textile operators, carpentry assistants, etc.) On-the-job training was provided by legally registered (formal sector) companies, via unpaid internships. Trainees received a daily stipend of $2.20 ($3 for women with children under 7).

    Methodology: RCT

    Sample: Unemployed young people placed in lowest two deciles of income distribution.

    Findings: 11% increase in likelihood to be in paid employment. Wage and salary earnings increase by 18%. Controlling for training institution fixed effects and pre-treatment characteristics: Female trainees' probability of paid employment 19-21 months after program increased by 5% relative to the control group. Women worked an average of 1.1 more days/month and 2.5 more hours/week than women in the control group and earned 18% more than women who didn't receive the training. Impact on total labor income not reported.

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  • Training Disadvantaged Youth in Latin America: Evidence From a Randomized Trial

    Attanasio, Kugler and Meghir (2008)

    Original 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.

    Intervention settings: Urban

    Intervention description: Three months of classroom training followed by three months of OJT in the form of unpaid internship, with 1009 companies participating.

    Methodology: RCT

    Sample: Unemployed youth from families in the two lowest deciles of the income distribution, from 2001-2005.

    Findings: Increased earnings for men and women, with the largest effects for women. Earnings for women increased on average 18%. Men and women who were offered training (intent-to-treat estimates) were more likely to be employed and to have jobs that offered benefits and to have a formal wage contract. Benefits of OJT found to be higher than that of classroom training.

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  • The Impact of Access to Free Childcare on Women's Labor Market Outcomes: Evidence from a Randomized Trial in Low-Income Neighborhoods of Rio de Janeiro

    Barros et al (2011)

    Intervention settings: Urban.

    Intervention description: Publicly provided child care.

    Methodology: Program assignment originally based on a lottery, with lottery winners getting program and losers being put on waiting list.

    Sample: Poor mothers.

    Findings: Increase in use of care (51% to 94%), mothers' employment (36%-46%) - especially among mothers not working six months before lottery (97%).

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  • Evaluating Preschool Programs When Length of Exposure to the Program Varies: A Nonparametric Approach

    Behrman, Cheng, and Todd (2004)

    Original Abstract:

    Nonexperimental data are used to evaluate impacts of a Bolivian preschool program on cognitive, psychosocial, and anthropometric outcomes. Impacts are shown to be highly dependent on age and exposure duration. To minimize the effect of distributional assumptions, program impacts are estimated as nonparametric functions of age and duration. A generalized matching estimator is developed and used to control for nonrandom selectivity into the program and into exposure durations. Comparisons with three groups-children in the feeder area not in the program, children in the program for less than or equal to 1 month, and children living in similar areas without the program-indicate that estimates are robust for significant positive effects of the program on cognitive and psychosocial outcomes with greater than or equal to 7 months' exposure, although the age patterns of effects differ slightly by comparison group. Copyright 2004 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

    Intervention settings: Urban.

    Intervention description: Training and unemployment benefits, including a public service component, where local government and other eligible organizations propose public projects and hire ALMP participants to work on them.

    Methodology: Estimation as nonparametric functions of age and duration.

    Sample: Adults. Registered unemployed, having income less than 50% of minimum wage, employed 6 months of last 12 or recent graduate. 45% of sample had university degree.

    Findings: Statistically significant effects on the likelihood of employment, the likelihood of being employed at least once and on wage levels. Middle aged had biggest impacts. Retraining increases the probability of employment and decreases the wage for females. Program not beneficial for highly educated.

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  • The Effect of a Large Expansion of Pre-Primary School Facilities on Preschool Attendance and Maternal Employment

    Berlinski and Galiani (2007)

    Original Abstract:

    We provide evidence on the impact of a large construction of pre-primary school facilities in Argentina. We estimate the causal impact of the program on pre-primary school attendance and maternal labor supply. Identification relies on a differences-in-differences strategy where we combine differences across regions in the number of facilities built with differences in exposure across cohorts induced by the timing of the program. We find a sizeable impact of the program on pre-primary school participation among children aged between 3 and 5. In fact, we cannot reject the null hypothesis of a full take-up of newly constructed places. In addition, we find that the childcare subsidy induced by the program increases maternal employment and that this effect is in line with the one previously found for the U.S.

    Intervention settings: Urban.

    Intervention description: Between 1994-2000, created 175,000 new preschools.

    Methodology: Difference-in-differences, exploiting differences across regions and cohorts in program exposure.

    Sample: Middle-income households living in urban areas.

    Findings: Full take-up of new facilities. Increase in employment probability (7-14%).

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  • Social Protection in a Crisis: Argentina's Plan Jefes y Jefas

    Galasso and Ravaillion (2004)

    Original Abstract:

    The authors assess the impact of Argentina's main social policy response to the severe economic crisis of 2002. The program aimed to provide direct income support for families with dependents, for whom the head had become unemployed due to the crisis. Counterfactual comparisons are based on a matched subset of applicants not yet receiving the program. Panel data spanning the crisis are also used. The authors find that the program reduced aggregate unemployment, though it attracted as many people into the workforce from inactivity, as it did people who would have been otherwise unemployed. While there was substantial leakage to formally ineligible families, and incomplete coverage of those eligible, the program did partially compensate many losers from the crisis, and reduced extreme poverty.

    Intervention settings: Urban.

    Intervention description: Participants worked 20 hours per week in community work, training, school attendance or employment at a private company and in exchange received direct income support.

    Methodology: Cross-sectional and difference-in-difference propensity score matching.

    Sample: Heads of households with dependents who became unemployed as a result of Argentina's economic crisis in 2003.

    Findings: 26% of participants would have been unemployed and 23% would have been inactive without program. Study found substantial leakage to ineligibles, but the program was still well targeted at the poor.

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