In Simple Words
Think of a restaurant owner who receives government funds to hire two subsidized dishwashers and responds by firing one existing un-subsidized dishwasher. The net increase in positions is only one, because the subsidy partially crowded out a non-subsidized job.
Firms offering apprenticeship places in Cote d Ivoire
- No formal apprentice placement assigned
- Group used for comparison
- Formal apprentice placement assigned
- 0.318 fewer traditional apprentice entrants
Entrants during the experiment. Firm-level estimate was marginally significant; it is not the number displaced per one formal placement.
See source →Research question
Subsidizing trainees within private firms risks inducing host employers to displace existing un-subsidized workers or apprentices with subsidized ones, blunting overall net employment expansion.
Participants
N = 674 informal enterprises evaluated at follow-up across 7 urban localities in Côte d'Ivoire.
Study Design
Enterprise-level instrumental variable estimation on firm apprentice inflows using randomized treatment assignment.
Results
For every 1.398 formal apprentices placed per firm, host firms displaced 0.318 traditional apprentices, yielding an estimated firm substitution parameter $\psi = 0.227$ (p = 0.128) and bounding net position creation between 74.1% and 77.3% of formal placements.
Takeaway
Measure host-firm displacement parameters ($\psi$) in subsidized employment schemes to ensure net position creation remains significantly above zero.
Source and citation
See source →Read alongside the research
Plain-English glossary
Original explanations, informed by the references below. Examples are illustrations, not data from the studies above. The research text stays unchanged.
- Follow-up
Collecting more information about participants later in a study to see what has happened to them. The term can also mean the length of time researchers keep track of them.
ExampleResearchers interview the same workers three months after a programme ends. That later interview is a follow-up.
GET-IT glossary · Follow-up ↗Read more about follow-up →