Vocational training for unemployed youth in Latvia

Abstract

We analyze the effectiveness of a vocational training (VT) programme targeting unemployed youth in Latvia, contributing to the scant literature on active labour market policies in transition countries. The programme we analyse is part of the Youth Guarantee scheme (2014–2020), the largest action launched by the European Union to combat youth unemployment after the 2008 financial crisis. Although the programme was targeted to youths aged between 15 and 29, priority was given to those younger than 25 years of age. We exploit this eligibility rule in a fuzzy regression discontinuity design framework to estimate the impact of VT participation on the probability of being employed and gross monthly labour income at given dates after the training. Using rich administrative data, we find that the age priority rule increased programme participation for the youngest group by about 10 percentage points. However, participation in the programme did not lead to statistically significant positive effects in labour market outcomes. We argue that this result could be due to some specific characteristics of the programme, namely the voucher system (potentially inducing lock-in effects) and the type of training (classroom instead of on-the-job training). Moreover, the programme was targeted at ex-ante low-employable individuals (e.g. without vocational qualifications), a fact that is confirmed by our analysis of the characteristics of the population of compliers with the age priority rule.

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“…As a result, this practice-oriented method (whether in classrooms or workshops) might have empowered the trainees to gain the skills and abilities required in the labour market (Gustavsson and Thunqvist, 2019). The present findings differ from those reported in the previous studies on VET (Bratti et.al . 2022; Da Costa, 2016; Lolwana, 2016) that the skills training programmes were not effective because the learning approaches were theory-based.…”

“…Studies point to the lack of practice of the skills in the form of schoolbased and workplace-based learning to help students gain experience (Abdullah et al, 2019;Lolwana, 2016). Some studies linked the lack of practical activities to the low-quality instructional materials in classrooms, lack of equipment in the workshops for carrying out practical work and involvement of external companies in workplace learning (Bratti et al, 2022;Da Costa, 2016;Lolwana, 2016). As an element of ELT, practice means that students should try to improve skills by observing what they are doing wrong and creating strategies to do better, hence gaining skills.…”

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“…Meskipun dianggap berhasil, namun perlu dilakukan pengukuran dampak jangka Panjang terhadap penerima program ini, apakah produktivitas yang dihasilkan pekerja dapat bertahan dalam jangka panjang atau hanya bersifat sementara. Sejalan dengan temuan tersebut, studi Bratti et al (2022) menambahkan bahwa karakteristik khusus dari program ALMP dan metode pelatihan yang diberikan turut mempengaruhi keberhasilan program tersebut dalam meningkatkan peluang bekerja bagi pemuda.…”

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“…While targeting may be generally less efficient in ALMP implemented in the CEE, there are exceptions Bratti et al (2022). for example report of a vocational training programme in Latvia, where participants were the least employable in terms of observable characteristics.5 There are also a few studies from Hungary that report positive employment effects of similar programmes, such as the payroll tax allowance(Bír o et al, 2022;Svraka, 2018) Czombos et al (2018).…”

“…4 4 While targeting may be generally less efficient in ALMP implemented in the CEE, there are exceptions. Bratti et al (2022) for example report of a vocational training programme in Latvia, where participants were the least employable in terms of observable characteristics. …”