Cost-Effective ALMP Interventions
RCTReview
Traditional active labor market policies, such as vocational training programs or cash grants, carry high implementation costs per participant and frequently fail to generate persistent long-term earnings increases.
Picture this
Targeting specific informational bottlenecks through short skill-testing workshops resolves market failures without requiring multi-month training or expensive capital transfers. It acts like correcting a misprinted address on an envelope rather than building a new postal system, achieving high impact at low overhead.
What the evidence says
The job application workshop generated a USD 10 per month earnings increase per worker at a one-off marginal cost of USD 18.20 per person, producing an impact-to-cost ratio that substantially exceeds conventional vocational training and cash transfer programs.
- Who was studied
- N = 3,052 young job-seekers aged 18–29 in Addis Ababa, Ethiopia.
- How
- Randomized controlled trial comparing a two-day workshop intervention against control and transport subsidy groups over a 4-year timeframe.
What to do
Deploy short, two-day standardized testing and signaling workshops instead of high-cost vocational training programs to improve youth employment outcomes at scale.
From the source
"The job application workshop generates an average wage gain of USD 10 per month per worker, for a one-off cost of USD 18.20 per individual. This compares favourably to other available labour market interventions..."
Anonymity_or_Distance_Job_Search_and_Labour_Market_Exclusion_in.pdf