<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Policymakers typically try to address youth unemployment in developing countries through either active labor market programs (ALMPs) or labor-intensive public works programs (LIPWs). We examine whether there is any additional benefit for unemployed youth from participating in a comprehensive ALMP compared to a LIPW. We exploit an unanticipated intervention in the largest employment program in Papua New Guinea, which resulted in one intake of the program completing a LIPW and missing out on a comprehensive ALMP. We conduct a difference-in-difference analysis between participants in the intake that missed out on the ALMP component of the program and participants in the intakes immediately before and after. In contrast to most impact evaluations of ALMPs, we show youth that completed the comprehensive ALMP were around twice as likely to be employed in the formal sector 9–12 months after the program compared to similar youth in the intake that only completed a LIWP. This effect was entirely driven by 20% of youth who participated in the ALMP staying with the employer they were placed with following the end of the program. Surveys of these employers illustrate that they use the ALMP as a low-cost, low-risk, and relatively low-effort way of hiring new employees.</p></abstract>

Policymakers typically try to address youth unemployment in developing countries through either active labor market programs (ALMPs) or labor-intensive public works programs (LIPWs). We examine whether there is any additional benefit for unemployed youth from participating in a comprehensive ALMP compared to a LIPW. We exploit an unanticipated intervention in the largest employment program in Papua New Guinea, which resulted in one intake of the program completing a LIPW and missing out on a comprehensive ALMP. We conduct a difference-in-difference analysis between participants in the intake that missed out on the ALMP component of the program and participants in the intakes immediately before and after. In contrast to most impact evaluations of ALMPs, we show youth that completed the comprehensive ALMP were around twice as likely to be employed in the formal sector 9–12 months after the program compared to similar youth in the intake that only completed a LIWP. This effect was entirely driven by 20% of youth who participated in the ALMP staying with the employer they were placed with following the end of the program. Surveys of these employers illustrate that they use the ALMP as a low-cost, low-risk, and relatively low-effort way of hiring new employees.

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

IZA Journal of Development and Migration

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

Policymakers typically try to address youth unemployment in developing countries through either active labor market programs (ALMPs) or labor-intensive public...

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

Publicado en línea: 05 oct 2019

Páginas: -

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

Palabras clave
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.

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

Publicado en línea: 05 oct 2019

Páginas: -

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

Palabras claveactive 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.

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