Subsidizing Vocational Training for Disadvantaged Youth in Colombia: Evidence from a Randomized Trial
Vocational training programs increase young women’s actual wages and opportunities for paid employment in the formal sector.
Developing marketable skills is one of the key long-term ways to fight unemployment, poverty, and crime. Yet, interventions improving educational quality and access arrive too late for individuals already outside the formal education system. Vocational training programs have emerged as a potential solution. Although the benefits of training programs are straightforward, there is little to no evidence on their actual impact on economic outcomes, especially in middle- and low-income countries. This paper examines the labor market effects of the Jóvenes en Acción vocational training program, which targeted poor urban young adults in Colombia.
Youths, and particularly women, offered the vocational training program saw improved labor market outcomes, including higher wages and more hours of paid employment.
- Upon completing the training program, women who participated earned 20% more and were 7% more likely to have paid employment, specifically working 3 hours more per week, than women who were not offered training.
- The vocational program increased formal employment for all youths participating. Both men and women were more likely to have a formal contract and hold formal employment. In the formal sector, where employment is associated with a written contract and benefits from payroll taxes, wages for women increased by 33%.
- There was no change in employment and earnings for men who participated in the program.
In short, the Jóvenes en Acción vocational training program, which combined training with an internship, was effective at improving female earnings and employment.
The Jóvenes en Acción (Youth in Action) Program, implemented between 2001 and 2005 in Colombia, offered 3 months of in-class training and 3 months of on-the-job training to young people aged 18-25 in the two lowest income distribution deciles. A total of 114 training institutions in the 7 largest cities of the country participated. They chose the courses to be taught in classroom settings, and selected more individuals to participate than they had the capacity for. The available programs slots were randomly assigned among the group of selected candidates. The remaining youth served as a control group. The on-the-job training was provided through unpaid internships at 1,009 companies. Young trainees received a cash transfer of $2.20 per day during the 6 months of the program.
The baseline (January 2005) and follow-up (August and October 2006) surveys follow a random subset of program participants. The final sample consisted of 4,353 individuals.