Learning and Earning: Evidence from a Randomized Evaluation in India

Abstract

This paper estimates the short-and-medium-run effects of participating in a subsidized vocational training program aimed at improving labor market outcomes of women residing in low-income households in a developing country. We combine pre-intervention data with two rounds of post-intervention data from a field experiment to quantify the short-and-medium-run effects of the program. In the short-run, we find that program participants are significantly more likely to be employed, work additional hours, and earn more. These short-run impact estimates are all sustained in the medium-run. We also identify credit constraints, local access, and lack of proper child care support as important barriers to program participation and completion. We are able to rule out two alternative mechanisms -- signalling and change in behavior that can drive these findings. Finally, a simple cost-benefit analysis suggests that the program is highly cost effective.

Keywords: Vocational training, Panel data, India, Economic returns, Field Experiment

JEL Classification: I21, J19, J24, 015