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Subsidizing Vocational Training for Disadvantaged Youth in Developing Countries: Evidence from a Randomized TrialAttanasio et al (2011)
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).
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.
Ruel and Quisumbing (2006)
Intervention description: Parents select one mother to be day care provider for up to 10 children, enabling other mothers to work.
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.
Attanasio, Kugler and Meghir (2008)
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.
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.
Low labor force participation among mothers in North Africa and the Middle East is often attributed to cultural factors independent of economic considerations. There is little evidence, however, to support or refute this view. In September 1999, the Israeli government introduced free public preschool for children aged 3 and 4. I use this policy change to estimate the effects of a reduction in child care costs on preschool enrollment, and Arab mothers' labor supply and fertility. I find that as a result of the intervention, preschool enrollment and mothers' labor supply both increased sharply. The increase in labor supply occurred mainly among more educated mothers. In spite of increasing labor force participation, the fertility of these mothers appears to have been unchanged in the short-run. There is no evidence of an effect on mothers in affected towns who did not have children of preschool age.
Intervention settings: Peri-urban.
Intervention description: Compulsory and Free Preschool Law (analyzing effect of law).
Methodology: Difference-in-differences comparing 11 treated towns and 13 untreated towns.
Sample: Program for all children, but preschools were first made available in poor areas. Sample consists mainly of Arab mothers.
Findings: Increase in preschool enrollment, especially among children of educated mothers, and mother's labor supply.
Study of Self-employed Women's Association (SEWA) program in IndiaBaldawi
Intervention settings: Rural
Intervention description: Program provided health care, child care, banking and insurance services.
Methodology: Cross-sectional comparisons of participants and non-participants, and participants' reports on how program changed their lives.
Sample: Mothers and children who attended centers in two districts 10 years ago.
Findings: 42%-53% of mothers report increased productivity, employment days and family savings.