How is labor participation affected by work training?

In 2014, approximately 7.8 million Latin American youth sought employment and did not find any, according to the International Labor Organization. This represents an urban unemployment rate of 13.3 percent in the region, more than three times the general unemployment rate for adults. 

Understanding the importance of this subject, CAF, Development Bank of Latin America, developed an experimental impact evaluation of a training program for work in Venezuela, carried out jointly with the private sector and the Simon Bolivar University. 

This training offered free courses in sales and bar-tendering to a group of individuals who were older than 18 years of age, unemployed or from the informal sector, to provide tools to expand their employment opportunities, increase their incomes, and strengthen their civic values. Training lasted three months. 

Of a total of 1,250 eligible participants, 888 were called for the work training (262 were a part of the control group). Of these, 116 candidates started the training program and 63 received their certificates. In a second process, 623 candidates were invited to participate, 31 registered, and 19 received their certification.  

The results of the study show that the participants of the first group reduced their participation in the labor market, while the participants of the second group increased it. 

These different results seem to be due to the different costs associated with the participation in the training courses and to how the interaction between participants allows to update the information regarding their own skills. In this respect, training not only allowed to acquire knowledge in specific areas, but also for people to learn about their skills with respect to other participants and, therefore, to adjust their job expectations accordingly. According to the results of the study, the participants of the second group, with higher opportunity costs, increased their perception regarding their potential in the labor market.

Adriana Mata, CAF's Executive for Impact Measurement, points out that from this study, future projects will be complemented with an internship program that enables insertion in the labor market to achieve greater impact on the participants. 

To learn more regarding the study, click here.