In Simple Words
Imagine learning how to operate a custom cash register software used by only one single store in town. Once you leave that store, no other store values that specific software knowledge because it cannot be applied anywhere else. Therefore, if your salary increases at a new job, it must be due to something other than the cash register skills you learned.
Young male job applicants in Malawi
- Without short work experience
- Reference wage outcome
- With short work experience
- About USD 3.83 more per day
Imprecise eight-month IV estimate from randomized fallback-job chances. Five days of work; this does not isolate training-skill transfer or rule out signaling.
See source →Research question
Evaluators often attribute post-intervention wage increases from job placement programs to general human capital or transferable skill acquisition. Testing whether project training was highly firm-specific clarifies whether skill accumulation or alternative mechanisms drive post-program market payoffs.
Participants
N = 268 male youth job seekers (aged 18+, secondary school educated) in Lilongwe, Malawi.
Study Design
Mechanism analysis evaluating the specific health survey questionnaire training content, grade non-disclosure, and reference letter specifications against outside market wage gains.
Results
Training was strictly firm- and project-specific (questionnaire terminology for a single health survey), and scores were never disclosed to outside employers. Yet participants achieved an 80% daily wage increase ($3.83/day), ruling out general human capital or skill signaling as the primary driver.
Takeaway
Disentangle firm-specific training content from general skills when evaluating whether active labor market program returns reflect human capital or alternative mechanisms like social networking.