Latin America and Caribbean

  • 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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  • Assisting the Transition from Workfare to Work: A Randomized Experiment in Argentina

    Galasso, Ravaillion and Salvia (2001)

    Original Abstract:

    Randomly sampled workfare participants in a welfare-dependent region of Argentina were given a voucher that entitled an employer to a sizable wage subsidy. A second sample also received the option of skill training while a third sample formed the control group. Double-difference and instrumental- variables methods were used to deal with potential experimental biases, including selective compliance with the randomized assignment. Compared to the control group, voucher recipients had a significantly higher probability of employment, though their current incomes were no higher. The impact was largely confined to women and younger workers. Labor supply effects appear to have been important. Training had no significant impact. The experiment was cost effective, given that take-up of the subsidy by employers was low.

    Intervention settings: Urban.

    Intervention description: Skill training and/or vouchers for workfare participants to give to prospective employers (18 month wage subsidy).

    Methodology: RCT.

    Sample: Adult beneficiaries of temporary employment programs.

    Findings: Voucher reduced probability of unemployment (despite fact that few firms made use of the voucher). Private sector employment was 15% for voucher recipients compared to 9% for controls. Women and younger workers had largest impacts.

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  • Estimating the Benefit Incidence of an Anti-Poverty Program using Propensity Score Matching

    Jalan and Ravaililon (2003)

    Original Abstract:

    We apply recent advances in propensity-score matching (PSM) to the problem of estimating the distribution of net income gains from an Argentinean workfare program. PSM has a number of attractive features in this context, including the need to allow for heterogeneous impacts while optimally weighting observed characteristics when forming a comparison group. The average direct gain to the participant is found to be about half the gross wage. Over half of the beneficiaries are in the poorest decile nationally, and 80% are in the poorest quintile. Our PSM estimator is reasonably robust to a number of changes in methodology.

    Intervention settings: Urban.

    Intervention description: Local governments and nongovernmental organizations submitted proposals for "socially useful projects," which were then ranked according to some criteria. Projects last at most six months.

    Methodology: Nearest neighbor propensity score matching.

    Sample: Lower average income, higher average family size, more likely to have borrowed to meet their basic needs, receives less from informal sources and more likely to participate in some form of political organization.

    Findings: Average gain in household income for participants was $103 dollars, with greater gains for younger people.

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  • Gender and Racial Discrimination in Hiring: A Pseudo Audit Study for Three Selected Occupations in Metropolitan Lima

    Nopo, Robels, and Saavedra (2007)

    Original Abstract:

    In this paper, we adapt the audit studies methodology to analyze gender and racial differences in hiring for a particular segment of the market of three selected occupations in Metropolitan Lima: salespersons, secretaries and (accounting and administrative) assistants. The adapted pseudo-audit study methodology allows us to reduce the room for existence of statistical discrimination. The results suggest the existence of no significant differences in hiring rates for different gender-race groups but some systematic (and significant) differences in the aimed wages of the individuals in their job search processes.

    Intervention settings: Urban

    Intervention description: Provides classroom training and internships lasting three months. Trainees receive stipend during training period, with mothers of young children receiving double stipend. Focus on training females for traditionally male occupations.

    Methodology: Two-stage matching procedure that first selects for each treated a matched control on the basis of similarity in preprogram hourly wages

    Sample: Technicians and professionals from middle and lower classes in Lima; 80% have an above high-school education.

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

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  • The Impact of Mexico's Retraining Program on Employment and Wages

    Revenga, Riboud, and Tan (1994)

    Original Abstract:

    This paper analyzes the impact and effectiveness of the Mexican Labor Retraining Program for Unemployed and Displaced Workers (PROBECAT). The strategy followed is to compare the post- training labor market experiences of trainees with those of a comparison group--a matched sample of unemployed individuals who were eligible for, but did not participate in, the PROBECAT program. The results of this exercise suggest that participation in PROBECAT reduced the mean duration of unemployment for both male and female trainees, and increased the monthly earnings of males, but not offemales. Theresultsalsoindicatethatthepost-training earnings effect varied systematically by level of schooling attainment, with the largest earnings increases (of about 28 to 37 percent) found for males with 6 to 12 years of education.

    Intervention settings: Urban

    Intervention description: Short-term vocational education training.

    Methodology: Cox proportional hazards model estimated on participants and matched nonparticipants (based on propensity score).

    Sample: Youth and adults. Offered to 250,000 registered unemployed people age 20-55, selected on basis of eligibility index.

    Findings: Program trainees found jobs more quickly. Impacts mainly for trainees older than 25 with work experience. Cost effective for women over 25, but not for younger women.

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  • The Guatemala Community Day Care Program

    Ruel and Quisumbing (2006)

    Intervention settings:

    Intervention description: Parents select one mother to be day care provider for up to 10 children, enabling other mothers to work.

    Methodology: Matching.

    Sample: Guatemala City, with poverty-based eligibility criteria. Mothers had to work to qualify for the program.

    Findings: Increased mothers' incomes (30%) and improved children's diets. Largest impacts among women with lower education.

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