The Marginal Benefit of an Active Labor Market Program Relative to a Public Works Program: Evidence from Papua New Guinea

Christopher Hoy; Darian Naidoo

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The Marginal Benefit of an Active Labor Market Program Relative to a Public Works Program: Evidence from Papua New Guinea

Christopher Hoy

und

Darian Naidoo

| 05. Okt. 2019

IZA Journal of Development and Migration

Band 10 (2019): Heft 1 (June 2019)

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Online veröffentlicht: 05. Okt. 2019

Seitenbereich: -

DOI: https://doi.org/10.2478/izajodm-2019-0003

Schlüsselwörter
active labor market policy, jobs, wage subsidies, vocational training, job search

© 2019 Christopher Hoy and Darian Naidoo, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 Public License.

Process of selecting treatment and “placebo” control groups

Impact of the program on formal employment by type of employerNote: Two respondents in the control group claimed to be employed with their ALMP employer even though they did not complete the ALMP. This is why in the figure above the control group does not have 0% employment by ALMP employers.

Results of the placebo test of the equal trends assumption

	(1) Intake 13 Placebo group		(2) Intakes 12–14 Placebo group		Difference
Variable	N	Mean/SE	N	Mean/SE	(2) ^- (1)
Formal sector employment in last 6 months
Baseline	134	0.000	224	0.000	0
		[0.000]		[0.000]
Endline	134	0.254	224	0.183	–0.071
		[0.038]		[0.026]
Difference	134	0.254	224	0.183	–0.071
		[0.038]		[0.026]

Average weekly wage (Kina)#
Baseline	134	0.000	224	0.000	0
		[0.000]		[0.000]
Endline	134	70.090	224	60.045	–10.045
		[8.114]		[6.185]
Difference	134	70.090	224	60.045	–10.045
		[8.114]		[6.185]

Average number of hours worked in a week#
Baseline	134	0.000	224	0.000	0
		[0.000]		[0.000]
Endline	134	18.754	224	15.348	–3.406
		[2.196]		[1.528]
Difference	134	18.754	224	15.348	–3.406
		[2.196]		[1.528]

Earned cash in last 4 weeks
Baseline	134	0.321	224	0.339	0.018
		[0.040]		[0.032]
Endline	134	0.604	224	0.571	–0.033
		[0.042]		[0.033]
Difference	134	0.284	224	0.232	–0.051
		[0.053]		[0.044]

Sought job in last 3 months
Baseline	134	0.052	224	0.094	0.042
		[0.019]		[0.020]
Endline	134	0.179	224	0.192	0.013
		[0.033]		[0.026]
Difference	134	0.127	224	0.098	–0.029
		[0.036]		[0.032]

Statistical balance between placebo groups in intake 13 and intakes 12 and 14

	(1) Intake 13 Placebo group		(2) Intakes 12–14 Placebo group		Difference
Variable	N	Mean/SE	N	Mean/SE	(2) ^- (1)
Age	134	23.522	224	23.415	–0.107
		[0.449]		[0.323]
Share that are male	134	0.552	224	0.567	0.015
		[0.043]		[0.033]
Share that are married	134	0.425	224	0.366	–0.059
		[0.043]		[0.032]
Years of education	120#	7.442	198#	6.949	–0.492
		[0.256]		[0.202]
Household members	134	9.119	224	8.763	–0.356
		[0.441]		[0.321]
Female household members	134	4.269	224	3.911	–0.358
		[0.240]		[0.176]
Male working household members	134	1.239	224	1.196	–0.042
		[0.129]		[0.088]
Share with concrete floor	134	0.060	224	0.062	0.003
		[0.021]		[0.016]
Share with wood floor	134	0.910	224	0.862	–0.049
		[0.025]		[0.023]

Differences in outcomes between youth in the control group and youth who were ineligible in intakes 12 and 14

	(1) Ineligible youth in intakes 12 and 14		(2) Control group		t-test (2) ^- (1)
Variable	N	Mean/SE	N	Mean/SE	Difference
Formal sector employment in last 6 months
Baseline	224	0.000	113	0.000	0
		[0.000]		[0.000]
Endline	224	0.183	113	0.230	0.047
		[0.026]		[0.040]
Difference	224	0.183	113	0.230	0.047
		[0.026]		[0.040]

Average weekly wage (Kina)#
Baseline	224	0.000	113	0.000	0
		[0.000]		[0.000]
Endline	224	60.045	113	87.673	27.628**
		[6.185]		[9.603]
Difference	224	60.045	113	87.673	27.628**
		[6.185]		[9.603]

Average number of hours worked in a week#
Baseline	224	0.000	113	0.000	0
		[0.000]		[0.000]
Endline	224	15.348	113	23.805	8.457***
		[1.528]		[2.446]
Difference	224	15.348	113	23.805	8.457***
		[1.528]		[2.446]

Earned cash in last 4 weeks
Baseline	224	0.339	113	0.381	0.041
		[0.032]		[0.046]
Endline	224	0.571	113	0.540	–0.032
		[0.033]		[0.047]
Difference	224	0.232	113	0.159	–0.073
		[0.044]		[0.062]

Sought job in last 3 months
Baseline	224	0.094	113	0.150	0.057
		[0.020]		[0.034]
Endline	224	0.192	113	0.230	0.038
		[0.026]		[0.040]
Difference	224	0.098	113	0.080	–0.019
		[0.032]		[0.051]

Differences in outcomes between youth in the treatment group and youth who were ineligible in intakes 12 and 14

	(1) Ineligible youth in intakes 12 and 14		(2) Treatment group		t-test (2) ^- (1)
Variable	N	Mean/SE	N	Mean/SE	Difference
Formal sector employment in last 6 months
Baseline	224	0.000	102	0.000	0
		[0.000]		[0.000]
Endline	224	0.183	102	0.412	0.229***
		[0.026]		[0.049]
Difference	224	0.183	102	0.412	0.229***
		[0.026]		[0.049]

Average weekly wage (Kina)#
Baseline	224	0.000	102	0.000	0
		[0.000]		[0.000]
Endline	224	60.045	102	123.255	63.210***
		[6.185]		[7.994]
Difference	224	60.045	102	123.255	63.210***
		[6.185]		[7.994]

Average number of hours worked in a week#
Baseline	224	0.000	102	0.000	0
		[0.000]		[0.000]
Endline	224	15.348	102	36.843	21.495***
		[1.528]		[2.545]
Difference	224	15.348	102	36.843	21.495***
		[1.528]		[2.545]

Earned cash in last 4 weeks
Baseline	224	0.339	102	0.343	0.004
		[0.032]		[0.047]
Endline	224	0.571	102	0.490	–0.081
		[0.033]		[0.050]
Difference	224	0.232	102	0.147	–0.085
		[0.044]		[0.064]

Sought job in last 3 months
Baseline	224	0.094	102	0.147	0.053
		[0.020]		[0.035]
Endline	224	0.192	102	0.324	0.132***
		[0.026]		[0.047]
Difference	224	0.098	102	0.176	0.078
		[0.032]		[0.060]

Statistical balance across employment and job-seeking histories

	(1) Control		(2) Treatment		t-test (2) ^- (1)
Variable	N	Mean/SE	N	Mean/SE	Difference
Share that have never worked in formal	113	0.743	102	0.794	0.051
sector		[0.041]
Number of formal sector jobs in lifetime	113	0.389	102	0.343	–0.046
		[0.058]		[0.065]
Earn any money over last 6 months	113	0.496	102	0.510	0.014
		[0.047]		[0.050]
Sought a formal sector job in last	113	0.150	102	0.147	–0.003
3 months		[0.034]
Sought any job last week	113	0.080	102	0.069	–0.011
		[0.026]		[0.025]

Effect of the program on employment and job-seeking behavior

	(1) Control		(2) Treatment		t-test (2) ^- (1)
Variable	N	Mean/SE	N	Mean/SE	Difference
Formal sector employment in last 6 months
Baseline	113	0.000	102	0	0
		[0.000]		[0.000]
Endline	113	0.230	102	0.412	0.182***
		[0.040]		[0.049]
Difference	113	0.230	102	0.412	0.182***
		[0.040]		[0.049]

Average weekly wage (Kina)#
Baseline	113	0.000	102	0	0
		[0.000]		[0.000]
Endline	113	87.673	102	123.255	35.582***
		[9.603]		[7.994]
Difference	113	87.673	102	123.255	35.582***
		[9.603]		[7.994]

Average number of hours worked in a week#
Baseline	113	0.000	102	0	0
		[0.000]		[0.000]
Endline	113	23.805	102	36.843	13.038***
		[2.446]		[2.545]
Difference	113	23.805	102	36.843	13.038***
		[2.446]		[2.545]

Earned cash in last 4 weeks
Baseline	113	0.381	102	0.343	–0.037
		[0.046]		[0.047]
Endline	113	0.540	102	0.49	–0.05
		[0.047]		[0.050]
Difference	113	0.159	102	0.147	–0.012
		[0.062]		[0.064]

Sought job in last 3 months
Baseline	113	0.150	102	0.147	–0.003
		[0.034]		[0.035]
Endline	113	0.230	102	0.324	0.093
		[0.040]		[0.047]
Difference	113	0.080	102	0.176	0.097
		[0.051]		[0.060]

Effect of the program using different econometric specifications

	OLS	OLS with controls	LOGIT
Formal sector employment in last 6 months	0.182***	0.164**	0.851***
	–0.06	–0.06	–0.3
Average weekly wage (Kina)#	35.582***	29.625**	N/A
	–12.64	–12.87	N/A
Average number of hours worked in a week#	13.038***	12.359***	N/A
	–3.53	–3.64	N/A
Earned cash in last 4 weeks	–0.012	–0.014	–0.077
	–0.09	–0.09	–0.27
Sought job in last 3 months	0.097	0.129	0.447
	–0.08	–0.08	–0.29

Differences in outcomes between youth in the control group and youth who were ineligible in intake 13

	(1) Ineligible youth in intake 13		(2) Control group		t-test (2) ^- (1)
Variable	N	Mean/SE	N	Mean/SE	Difference
Formal sector employment in last 6 months
Baseline	134	0.000	113	0.000	0
		[0.000]		[0.000]
Endline	134	0.254	113	0.230	–0.024
		[0.038]		[0.040]
Difference	134	0.254	113	0.230	–0.024
		[0.038]		[0.040]

Average weekly wage from (Kina)#
Baseline	134	0.000	113	0.000	0
		[0.000]		[0.000]
Endline	134	70.090	113	87.673	17.583
		[8.114]		[9.603]
Difference	134	70.090	113	87.673	17.583
		[8.114]		[9.603]

Average number of hours worked in a week#
Baseline	134	0.000	113	0.000	0
		[0.000]		[0.000]
Endline	134	18.754	113	23.805	5.052
		[2.196]		[2.446]
Difference	134	18.754	113	23.805	5.052
		[2.196]		[2.446]

Earned cash in last 4 weeks
Baseline	134	0.321	113	0.381	0.060
		[0.040]		[0.046]
Endline	134	0.604	113	0.540	–0.065
		[0.042]		[0.047]
Difference	134	0.284	113	0.159	–0.124
		[0.053]		[0.062]

Sought job in last 3 months
Baseline	134	0.052	113	0.150	0.098***
		[0.019]		[0.034]
Endline	134	0.179	113	0.230	0.051
		[0.033]		[0.040]
Difference	134	0.127	113	0.080	-0.047
		[0.036]		[0.051]

Statistical balance across background characteristics

	(1) Control		(2) Treatment		t-test (2) ^- (1)
Variable	N	Mean/SE	N	Mean/SE	Difference
Age	113	24.575	102	25.706	1.131*
		[0.479]		[0.444]
Share that are male	113	0.558	102	0.647	0.09
		[0.047]		[0.048]
Share that are married	113	0.398	102	0.412	0.014
		[0.046]		[0.049]
Total number of household members	113	8.770	102	8.392	–0.378
		[0.417]		[0.448]
Female household members	113	3.929	102	3.892	–0.037
		[0.206]		[0.265]
Male working household members	113	1.044	102	1.029	–0.015
		[0.102]		[0.115]
Share with concrete floor	113	0.053	102	0.078	0.025
		[0.021]		[0.027]
Share with wood floor	113	0.894	102	0.882	–0.011
		[0.029]		[0.032]
Years of education	112#	9.098	102	9.461	0.363
		[0.196]		[0.198]

Difference in background characteristics of respondents between who were re-interviewed and those that were not in the control group

	(1) Only in baseline survey		(2) In both baseline and follow-up survey		t-test Difference
Variable	N	Mean/SE	N	Mean/SE	(2) ^- (1)
Age	78	24.051	113	24.575	–0.524
		[0.467]		[0.479]
Share that are male	78	0.641	113	0.558	0.084
		[0.055]		[0.047]
Share that are married	78	0.321	113	0.398	–0.078
		[0.053]		[0.046]
Years of education	77	9.584	112	9.098	0.486
		[0.243]		[0.196]
Household members	78	8.372	113	8.770	–0.398
		[0.491]		[0.417]
Female household members	78	3.897	113	3.929	–0.032
		[0.269]		[0.206]
Male working household members	78	1.231	113	1.044	0.187
		[0.138]		[0.102]
Share with concrete floor	78	0.128	113	0.053	0.075*
		[0.038]		[0.021]
Share with wood floor	78	0.808	113	0.894	–0.086*
		[0.045]		[0.029]

Questions that were asked to measure the main outcomes of interest

Main outcome	Exact question
Formal sector employ- ment in last 6 months	Are you currently in or did you have a part-time or full-time wage job in the past 6 months in the formal sector? (i.e., regular or ongoing employment, not self-employment, or temporary work)
Average weekly wage from formal sector employment (Kina)	How much money do you earn/did you earn from this work each week?
Average number of hours worked in a week in for- mal sector employment	How many hours per week on average, do you work or did you work?
Earned cash in last 4 weeks	We know that you may earn cash from a range of different activities such as informal selling and temporary work. Now I want to consider everything that you have done in the last 4 weeks to earn cash, if you have earned cash. Did you earn any cash from any activities at all in the last 4 weeks?
Sought job in last 3 months	Have you sought any kind of paid job in the last 3 months?

Difference in background characteristics between respondents who were re-interviewed and those that were not in the treatment group

	(1) Only in baseline survey		(2) In both baseline and Follow-up survey		t-test Difference
Variable	N	Mean/SE	N	Mean/SE	(2) ^- (1)
Age	62	25.726	102	25.706	0.020
		[0.569]		[0.444]
Share that are male	62	0.661	102	0.647	0.014
		[0.061]		[0.048]
Share that are married	62	0.339	102	0.412	–0.073
		[0.061]		[0.049]
Years of education	62	10.500	102	9.461	1.039***
		[0.172]		[0.198]
Household members	62	7.742	102	8.392	–0.650
		[0.490]		[0.448]
Female household members	62	3.500	102	3.892	–0.392
		[0.267]		[0.265]
Male working household members	62	0.871	102	1.029	–0.158
		[0.125]		[0.115]
Share with concrete floor	62	0.065	102	0.078	–0.014
		[0.031]		[0.027]
Share with wood floor	62	0.855	102	0.882	–0.028
		[0.045]		[0.032]

Differences in outcomes between youth in the treatment group and youth who were ineligible in intake 13

	(1) Ineligible youth in intake 13		(2) Treatment group		t-test (2) ^- (1)
Variable	N	Mean/SE	N	Mean/SE	Difference
Formal sector employment in last 6 months
Baseline	134	0.000	102	0.000	0
		[0.000]		[0.000]
Endline	134	0.254	102	0.412	0.158***
		[0.038]		[0.049]
Difference	134	0.254	102	0.412	0.158***
		[0.038]		[0.049]

Average weekly wage (Kina)#
Baseline	134	0.000	102	0.000	0
		[0.000]		[0.000]
Endline	134	70.090	102	123.255	53.165***
		[8.114]		[7.994]
Difference	134	70.090	102	123.255	53.165***
		[8.114]		[7.994]

Average number of hours worked in a week#
Baseline	134	0.000	102	0.000	0
		[0.000]		[0.000]
Endline	134	18.754	102	36.843	18.089***
		[2.196]		[2.545]
Difference	134	18.754	102	36.843	18.089***
		[2.196]		[2.545]

Earned cash in last 4 weeks
Baseline	134	0.321	102	0.343	0.022
		[0.040]		[0.047]
Endline	134	0.604	102	0.490	–0.114*
		[0.042]		[0.050]
Difference	134	0.284	102	0.147	–0.137*
		[0.053]		[0.064]

Sought job in last 3 months
Baseline	134	0.052	102	0.147	0.095**
		[0.019]		[0.035]
Endline	134	0.179	102	0.324	0.144**
		[0.033]		[0.047]
Difference	134	0.127	102	0.176	0.050
		[0.036]		[0.060]

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The Marginal Benefit of an Active Labor Market Program Relative to a Public Works Program: Evidence from Papua New Guinea

Online veröffentlicht: 05. Okt. 2019

Seitenbereich: -

DOI: https://doi.org/10.2478/izajodm-2019-0003

Schlüsselwörter
active labor market policy, jobs, wage subsidies, vocational training, job search

© 2019 Christopher Hoy and Darian Naidoo, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 Public License.

Figure 1

Figure 2

Results of the placebo test of the equal trends assumption

Statistical balance between placebo groups in intake 13 and intakes 12 and 14

Differences in outcomes between youth in the control group and youth who were ineligible in intakes 12 and 14

Differences in outcomes between youth in the treatment group and youth who were ineligible in intakes 12 and 14

Statistical balance across employment and job-seeking histories

Effect of the program on employment and job-seeking behavior

Effect of the program using different econometric specifications

Differences in outcomes between youth in the control group and youth who were ineligible in intake 13

Statistical balance across background characteristics

Difference in background characteristics of respondents between who were re-interviewed and those that were not in the control group

Questions that were asked to measure the main outcomes of interest

Difference in background characteristics between respondents who were re-interviewed and those that were not in the treatment group

Differences in outcomes between youth in the treatment group and youth who were ineligible in intake 13

The Marginal Benefit of an Active Labor Market Program Relative to a Public Works Program: Evidence from Papua New Guinea

Online veröffentlicht: 05. Okt. 2019

Seitenbereich: -

DOI: https://doi.org/10.2478/izajodm-2019-0003

Schlüsselwörteractive labor market policy, jobs, wage subsidies, vocational training, job search

© 2019 Christopher Hoy and Darian Naidoo, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 Public License.

Figure 1

Figure 2

Results of the placebo test of the equal trends assumption

Statistical balance between placebo groups in intake 13 and intakes 12 and 14

Differences in outcomes between youth in the control group and youth who were ineligible in intakes 12 and 14

Differences in outcomes between youth in the treatment group and youth who were ineligible in intakes 12 and 14

Statistical balance across employment and job-seeking histories

Effect of the program on employment and job-seeking behavior

Effect of the program using different econometric specifications

Differences in outcomes between youth in the control group and youth who were ineligible in intake 13

Statistical balance across background characteristics

Difference in background characteristics of respondents between who were re-interviewed and those that were not in the control group

Questions that were asked to measure the main outcomes of interest

Difference in background characteristics between respondents who were re-interviewed and those that were not in the treatment group

Differences in outcomes between youth in the treatment group and youth who were ineligible in intake 13

Schlüsselwörter
active labor market policy, jobs, wage subsidies, vocational training, job search