Labor Seminars Amsterdam

Jochen Kluve (Humboldt University Berlin, Germany)
Tuesday, 13 February 2018

Identifying the right human capital investments for disadvantaged young adults is a key policy concern worldwide. While many studies on the (very) short-term impacts of youth skills training programs exist, there is almost no rigorous evidence on the long-run effects of these policies outside the US. This paper presents the results of a large-scale randomized controlled trial of a youth training program, estimating treatment effects six years after random assignment, including long-term labor market trajectories of  young people. We are able to track a representative sample of more than 3,200 youths at the six-year follow-up. The intervention is prototypical of many skills training programs worldwide, and has been implemented at scale in the Dominican Republic for more than a decade. Our empirical findings indicate mixed results: on the one hand, we document statistically significant and positive impacts on the formality of employment, particularly for men, and impacts for both men and women in Santo Domingo, the capital. The long-term analysis shows that these impacts are sustained and growing over time. The estimated earnings impacts are positive in sign, though again statistically significant only in Santo Domingo. On the other hand, there are no significant impacts on average employment; which appears consistent with the low unemployment in countries with high informality and no unemployment
insurance. Our analysis suggests that skills training programs work better in more dynamic local labor market contexts, where there is actual demand for the skills provided. Joint with Pablo Ibarrarán, Laura Ripani and David Rosas Shady.

Keywords: Long-term, impact evaluation, Randomized Controlled Trial, Dominican Republic, youth training, labor market outcomes.

JEL Classification: J24, J64, O15, O17.