Program evaluation

Program evaluation provides an overview of the effectiveness of a variety of labor market policies that have been tested in diverse settings across various countries. The articles analyze whether or not the individual and the economy fair better without the measures studied.

  • Youth labor market interventions

    Comprehensive programs that focus on skills can reduce unemployment and upgrade skills in OECD countries

    Jochen Kluve, December 2014
    Reducing youth unemployment and generating more and better youth employment opportunities are key policy challenges worldwide. Active labor market programs for disadvantaged youth may be an effective tool in such cases, but the results have often been disappointing in Organisation for Economic Co-operation and Development (OECD) countries. The key to a successful youth intervention program is comprehensiveness, comprising multiple targeted components, including job-search assistance, counseling, training, and placement services. Such programs can be expensive, however, which underscores the need to focus on education policy and earlier interventions in the education system.
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  • Why is youth unemployment so high and different across countries?

    Young people experience worse labor market outcomes than adults worldwide but the difference varies greatly internationally

    Francesco Pastore, January 2018
    In Germany, young people are no worse off than adults in the labor market, while in southern and eastern European countries, they fare three to four times worse. In Anglo-Saxon countries, both youth and adults fare better than elsewhere, but their unemployment rates fluctuate more over the business cycle. The arrangements developed in each country to help young people gain work experience explain the striking differences in their outcomes. A better understanding of what drives these differences in labor market performance of young workers is essential for policies to be effective.
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  • Who benefits from firm-sponsored training?

    Firm-sponsored training benefits both workers and firms through higher wages, increased productivity and innovation

    Benoit Dostie, April 2015
    Workers participating in firm-sponsored training receive higher wages as a result. But given that firms pay the majority of costs for training, shouldn’t they also benefit? Empirical evidence shows that this is in fact the case. Firm-sponsored training leads to higher productivity levels and increased innovation, both of which benefit the firm. Training can also be complementary to, and enhance, other types of firm investment, particularly in physical capital, such as information and communication technology (ICT), and in organizational capital, such as the implementation of high-performance workplace practices.
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  • What is the economic value of literacy and numeracy?

    Basic skills in literacy and numeracy are essential for success in the labor market

    Anna Vignoles, January 2016
    Even in OECD countries, where an increasing proportion of the workforce has a university degree, the value of basic skills in literacy and numeracy remains high. Indeed, in some countries the return for such skills, in the form of higher wages, is sufficiently large to suggest that they are in high demand and that there is a relative scarcity. Policymakers need robust evidence in order to devise interventions that genuinely improve basic skills, not just of new school leavers entering the market, but also of the existing workforce. This would lead to significant improvements in the population that achieves a minimum level of literacy and numeracy.
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  • What effect do vocational training vouchers have on the unemployed?

    Vouchers can create a market for training but may lengthen participants’ unemployment duration

    Anthony Strittmatter, November 2016
    The objective of providing vocational training for the unemployed is to increase their chances of re-employment and human capital accumulation. In comparison to mandatory course assignment by case workers, the awarding of vouchers increases recipients’ freedom to choose between different courses and makes non-redemption a possibility. In addition, vouchers may introduce market mechanisms between training providers. However, empirical evidence suggests that voucher allocation mechanisms prolong the unemployment duration of training participants. But, after an initial period of deterioration, better long-term employment opportunities are possible.
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  • The usefulness of experiments

    Are experiments the gold standard or just over-hyped?

    Jeffrey A. Smith, May 2018
    Non-experimental evaluations of programs compare individuals who choose to participate in a program to individuals who do not. Such comparisons run the risk of conflating non-random selection into the program with its causal effects. By randomly assigning individuals to participate in the program or not, experimental evaluations remove the potential for non-random selection to bias comparisons of participants and non-participants. In so doing, they provide compelling causal evidence of program effects. At the same time, experiments are not a panacea, and require careful design and interpretation.
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  • The role of preschool in reducing inequality

    Preschool improves child outcomes, especially for disadvantaged children

    Jane Waldfogel, December 2015
    Children from disadvantaged families have lower levels of school readiness when they enter school than do children from more advantaged families. Many countries have tried to reduce this inequality through publicly provided preschool. Evidence on the potential of these programs to reduce inequality in child development is now quite strong. Long-term studies of large publicly funded programs in Europe and Latin America, and newer studies on state and local prekindergarten programs implemented more recently in the US, find that the programs do improve outcomes for young children, particularly for those from disadvantaged families.
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  • The role of cognitive and socio-emotional skills in labor markets

    Cognitive skills are more relevant in explaining earnings, socio-emotional skills in determining labor supply and schooling

    Pablo AcostaNoël Muller, October 2018
    Common proxies, such as years of education, have been shown to be ineffective at capturing cross-country differences in skills acquisition, as well as the role they play in the labor market. A large body of research shows that direct measures of skills, in particular cognitive and socio-emotional ones, provide more adequate estimations of individuals’ differences in potential productive capacity than the quantity of education they receive. Evidence shows that cognitive skills in particular are quite relevant to explain wages, while socio-emotional skills are more associated with labor force and education participation decisions.
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  • The impacts of shortening secondary school duration

    Shortening secondary school duration may increase the skilled workforce in aging societies

    Stephan L. Thomsen, July 2015
    The main goal of secondary school education in developed countries is to prepare students for higher education and the labor market. That demands high investments in study duration and specialized fields to meet rising skill requirements. However, these demands for more education are in opposition to calls for early entry to the labor market, to lengthen working lives to meet the rising costs associated with an aging population and to enable the intergenerational transfer of skills. One way to lengthen working lives is to shorten the duration of secondary school, an option recently implemented in Canada and Germany. The empirical evidence shows mixed effects.
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  • The impact of monitoring and sanctioning on unemployment exit and job-finding rates

    Job search monitoring and benefit sanctions generally reduce unemployment duration and boost entry to employment in the short term

    Duncan McVicar, July 2014
    Unemployment benefits often reduce incentives to search for a job. Policymakers have responded to this behaviour by setting minimum job search requirements, by monitoring to check that unemployment benefit recipients are engaged in the appropriate level of job search activity, and by imposing sanctions for infractions. Empirical studies consistently show that job search monitoring and benefit sanctions reduce unemployment duration and increase job entry in the short term. There is some evidence that longer-term effects of benefit sanctions may be negative.
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