The long-term effects of job training on labor market and skills outcomes in Chile

Abstract

Job training programs can be an effective policy for improving productivity and labor market outcomes in low- and middle-income countries. We report medium- and long-term impacts of a job training program for vulnerable workers in Chile on labor market and skill outcomes using experimental and administrative data. We estimate intention-to-treat effects, accounting for potential non-compliance by training providers in the assignment process, as well as local average treatment effects due to noncompliance with the assigned treatment status. Overall, the program shows limited effectiveness. While we find some positive impacts on labor income, the program fails to improve most labor outcomes. A detailed investigation of heterogenous effects by course-type, training provider and course quality, and gender reveals that the positive income effects are more likely to be realized for males and participants in courses that were offered by high-quality providers. Evidence on mechanisms indicates that the program's limited impact on labor outcomes could, at least partly, be due to its limited effect on workers’ skills.