Indiana University SPEA Edward J. Bloustein School of Planning and Public Policy University of Pennsylvania AIR American University

Panel Paper: Long-Term and External Effects of Job Training: Experimental Evidence from Colombia

Thursday, November 12, 2015 : 3:30 PM
Orchid A (Hyatt Regency Miami)

*Names in bold indicate Presenter

Adriana D Kugler, Georgetown University, Maurice Kugler, IMPAQ International, Juan E Saavedra, RAND Corporation and Luis O Herrera, Inter-American Development Bank
Job training programs typically aim at improving the employment prospects of individuals who would otherwise have difficulty integrating into the economic mainstream.  In this paper, we examine the persistence of employment and earnings gains from a randomized vocational training program using administrative data 10 years after the introduction of this program in Colombia. In addition, we go beyond looking at labor market outcomes for participants in the program and we examine the impacts on educational outcomes of both participants and their family members as well as effects in terms of labor market participation and other outcomes on other household members. We use data collected from a randomized controlled trial matched with administrative education records and social security records in Colombia to examine the medium and long-term effects of the training program close to 10 years after the initial assignment to training. We find prolonged impacts of the program on formal employment and earnings even 10 years after participation in the program. We also find that lottery winners are 1.5 percentage points more likely to take the University admissions exam and 3 percentage points more likely to enroll in formal tertiary education, particularly in private universities. These results suggest that job training complements formal education, thus, providing an avenue for social mobility. The results also show positive impacts on family members of lottery winners in terms of improvements in household amenities and investments as well as health status of the lottery winner and other household members. Moreover, these results suggest that welfare calculations based on short-term employment and earnings impacts alone may considerably underestimate the social desirability of these kinds of programs, as there are several other channels through which training affects the welfare of the trainee and her family.