Tackling Youth Unemployment: Evidence From a Labor Market Experiment in Uganda
By Livia Alfonsi, O. Bandiera, V. Bassi, Robin Burgess, Imran Rasul, M. Sulaiman, A. Vitali. Econometrica, 2020
188 citations recorded by the source corpus.
We design a labor market experiment to compare demand‐ and supply‐side policies to tackle youth unemployment, a key issue in low‐income countries. The experiment tracks 1700 workers and 1500 firms over four years to compare the effect of offering workers either vocational training (VT) or firm‐provided training (FT) for six months in a common setting where youth unemployment is above 60%. Relative to control workers, we find that, averaged over three post‐intervention years, FT and VT workers: (i) enjoy large and similar upticks in sector‐specific skills, (ii) significantly improve their employment rates, and (iii) experience marked improvements in an index of labor market outcomes. These averages, however, mask differences in dynamics: FT gains materialize quickly but fade over time, while VT gains emerge slowly but are long‐lasting, leading VT worker employment and earning profiles to rise above those of FT workers. Estimating a job ladder model of worker search reveals the key reason for this: VT workers receive significantly higher rates of job offers when unemployed, thus hastening their movement back into work. This likely stems from the fact that the skills of VT workers are certified and therefore can be demonstrated to potential employers. Tackling youth unemployment by skilling youth using vocational training pre‐labor market entry therefore appears to be more effective than incentivizing firms through wage subsidies to hire and train young labor market entrants.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/4eab38465a34aeaaa64a685afeb53d3abb0a4daf
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Economics and Econometrics
- Maitreesh Ghatak
- Clare Balboni
- Robin Burgess
- Anton Heil
- O. Bandiera
- Abhijit Banerjee
- Dean S. Karlan
- J. Rud
Citations in the corpus
- Why do people stay poor? (2020, background): “For example, Alfonsi et al. (2020) find that significant investments in vocational training and apprenticeships have large impacts on employment and earnings of disadvantaged youth in Uganda.”