Training the disadvantaged youth and labor market outcomes: Evidence from Bangladesh

Abstract

This paper estimates the effects of a youth training program in Bangladesh on labor market outcomes. The program, organized as a randomized controlled trial, provides on-the-job and classroom training to disadvantaged unemployed youth. ITT results show that six months after the intervention, on-the-job training increases labor market participation by 16 percentage points and earnings by 23%. The effect on employment declines in the long-run, after 22 months, but the effect on earnings is sustained as the program induces a shift from casual work to wage employment. Adding classroom training over on-the-job training has no short term effect on aggregate employment and earnings but it has more sustained effect. © 2020 Elsevier B.V.

Keywords

Author Keywords

Training youth Bangladesh Earnings

Index Keywords

training wage labor market working conditions Bangladesh young population unemployment benefit

Author Affiliations

BRAC Institute of Governance and Development, BRAC University, Dhaka, Bangladesh

Funding & Acknowledgements

University of California Berkeley, UCB

This paper is the revised version of the first chapter of my PhD dissertation titled “Essays on Labor and Credit Markets in Bangladesh”. I am grateful to my three advisors, Prof. Alain de Janvry, Prof. Elisabeth Sadoulet, and Prof. Paul Gertler, UC Berkeley. The data used in this paper were generated by BRAC's Research and Evaluation Division (BRAC-RED) which has been integrated with the BRAC Institute of Governance and Development (BIGD), BRAC University since January 2019. I am grateful to BIGD for providing me with the data. I would like to thank Prof Abdul Bayes, Ms Rehnuma Rahman, Ms Sitwat Shahed, Ms Anindita Bhattacharjee, Dr. Sakib Mahmood and Dr. Imran Matin of BIGD/BRAC-RED. Thanks also to Ms Farzana Kashfi, former Program Head, Skills Development Program, BRAC, Ms Tasmiah Tabassum Rahman, Program Head, Skills Development Program, BRAC, Mr Joydeep Sinha Roy, Program Head, Skills Development Program, BRAC and Mr Rezaul Mazid, Senior Manager, Skills Development Program, BRAC.

References 10 References

1 Living Up to Expectations how Job Training Made Women Better Off and Men Worse Off, (2017)

2 Informal Sector and Informal Employment in Bangladesh, (2012)

3 Alfonsi, Livia, Tackling Youth Unemployment: Evidence From a Labor Market Experiment in Uganda, Econometrica, 88, 6, pp. 2369-2414, (2020)

4 Altonji, Joseph G., Employer learning and statistical discrimination, Quarterly Journal of Economics, 116, 1, pp. 313-350, (2001)

5 Alzúa, María Laura, LONG-RUN EFFECTS OF YOUTH TRAINING PROGRAMS: EXPERIMENTAL EVIDENCE FROM ARGENTINA, Economic Inquiry, 54, 4, pp. 1839-1859, (2016)

6 Attanasio, Orazio Pedro, Subsidizing vocational training for disadvantaged youth in Colombia: Evidence from a randomized trial, American Economic Journal: Applied Economics, 3, 3, pp. 188-220, (2011)

7 Attanasio, Orazio Pedro, Vocational training for disadvantaged youth in Colombia: A long-term follow-up, American Economic Journal: Applied Economics, 9, 2, pp. 131-143, (2017)

8 undefined, (2016)

9 World Development Report 2012 Gender Equality and Development, (2011)

10 Poverty Assessment Assessing A Decade of Progress in Reducing Poverty 2000 2010, (2013)

Training the disadvantaged youth and labor market outcomes: Evidence from Bangladesh

How to Cite