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Effectiveness of Interventions Aimed at Improving Women’s Employability and Quality of Work: A Critical Review of Impact Evaluation Studies By Petra E.

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Presentation on theme: "Effectiveness of Interventions Aimed at Improving Women’s Employability and Quality of Work: A Critical Review of Impact Evaluation Studies By Petra E."— Presentation transcript:

1 Effectiveness of Interventions Aimed at Improving Women’s Employability and Quality of Work: A Critical Review of Impact Evaluation Studies By Petra E Todd University of Pennsylvania

2 Introduction  Policy interventions in developing countries often aim to improve earnings and employment prospects of individuals subject to labor market shocks or credit constraints  Some programs targeted a women (e.g. micro- lending, CCT)  Programs that not targeted at women may nonetheless affect men and women in different ways.

3 Rationale for female-targeting  Increase share of power in household decision- making  Lower barriers to labor market entry, which may be more severe for women depending on the context  Promote effective use of resources - Women may use additional resources in different ways, for example, on investments in children.

4 Goals of paper  Examine evidence on the effectiveness of a variety of interventions tried in developing and transition economies with goal of improving women’s employability and quality of work  Synthesize findings across studies

5 Types of programs examined  Active labor market (ALMP) programs  Microfinance programs  Entrepreneurship and leadership programs  Programs that facilitate work  Child care subsidies, parental leave, land titling  CCT Programs

6  Programs differ in scope, content, targeting, eligibility criteria and objectives  Evaluation studies based on alternative methodologies  Randomization  Nonexperimental Methods  Regression-adjustment  Matching  Control function  Regression-discontinuity  Structural modeling

7 Employment and Job Creation Strategies

8 ALMP Programs in Latin America  Usually either wage subsidy programs, training/retraining programs, or public works programs  Aim to affect worker skill set and/or to affect the job search process  May induce worker-firm matches that would otherwise not occur (e.g. by subsidizing worker wage)  Might expect workers and firms to “split” the rent of a subsidy program.

9 Proempleo program in Argentina  Provided vouchers for workfare participants to give to employers – entitled firms to a wage subsidy of $100/month for workers age 45+ and $100/month for younger workers  Program impacts studied in Galasso, Ravaillon and Salvia (2001) using randomized experimental design  one treatment group got voucher only, one got voucher plus training option and control group received neither  Program impacts  Significant effects on employment (14% increase in treated groups)  no effect on earnings income at 18 months after the program  Largest impacts for women and younger workers  Low take-up by employers (who possibly did not want to formalize employment arrangements by taking up voucher)

10 Trabajar II program in Argentina  Provided short-term work opportunities at low wages, targeting unemployed from poor families, to alleviate effects of macroeconomic shocks of the mid 90’s  Governmental and nongovernmental organizations submitted proposals for socially useful projects  Evaluated by Jalan and Ravaillon (2003) using a propensity score matching approach  Program impacts:  Average wage gain of $103, with largest impacts observed for younger age group (age 15-24)  Similar impacts for men and women

11 Jefes program in Argentina  Provided income support for eligible household heads after Argentina’s 2002 economic crisis  Required to do 20 hour work, training, or schooling for a wage subsidy  Substantial program leakage – many people who enrolled in program were not household heads (many were wives) or did not satisfy other eligibility criteria  Nevertheless, targeted mainly at poor (80% below poverty line)  Program analyzed in Galasso and Ravaillon (2003) using propensity score methodology with comparison group of applicants who had not yet joined program  Program impacts:  Reduced Argentina’s aggregate unemployment rate by 2.5% and supplemented income of poor families.

12 PROBECAT program in Mexico  Short-term vocational training offered to more than 250,000 people age registered with the unemployment office  Revenga, Riboud, and Tan (1992) evaluate program impacts using a Box-Cox proportional hazard model framework  Program impacts  Trainees found jobs more quickly – program reduced unemployment spell for women by 1.9 months and increased number of hours worked, but did not increase monthly earnings.  Program found cost-effective (benefits cover costs) for women age 25 and over but not for younger women

13 Programa Joven – in Argentina  Targeted at youth with low educ. Levels, low work experience who were unemployed or inactive. More than 100,000 youth enrolled.  Provided 200 hours of training and a monetary subsidy for females with children. Also, medical checkups, work clothing, transportation expenses  Two phases – technical knowledge phase and internship phase  Aedo and Nunez (2004) evaluate program using cross-sectional prop. score matching  Program impacts: increase of about $25/month on earnings  Cost-effective only if long-lasting (9 years or more)

14 ProJoven in Peru  Labor training program for 20,000 poor urban youth that provided classroom training, stipends, and internships lasting about 3 months  One aim of program was to train female youth for employment in traditionally male occupations  Program evaluated in Nobo, Robles, and Saveedra (2007) using a matching approach  Program impacts:  Large, positive impacts on employment and hours worked of women  modest positive impacts on earnings

15 Summary of ALMP Evaluations in Latin America  Many programs effective in increasing employment, but mixed evidence on earnings  ALMP programs facilitate firm-worker matches, sometimes at the expense of lower wages than the worker might have obtained through a longer job search  Need more research on whether programs are cost-effective  Need a better understanding of how workers who do not participate in the programs might be affected by them, particularly for large scale ALMP programs.  Large scale public ALMP programs may also crowd out private training offered by firms.  Would be useful to study programs within context of a job search model.

16 ALMP in Transition Economies  Programs aim to ameliorate effects of large shifts in labor demand during shift from centralized to market-based economy  High unemployment rates  Large stocks of long-term unemployed

17 Russia and Romania  Provide various types of training  Eligibility criteria differ somewhat across countries  Russian sample is better educated and has more labor force experience but more negatively selected (not everyone unemployed gets registered in Russia.)  Benus, Brinza, Cuica, Denisova, and Kartseva (2005) evaluate programs using propensity score matching  Program impacts:  No significant impacts on employment, salary or length of unemployment spell in Russia  Significant impacts of the program on likelihood of employment and on level of wages but not on duration of unemployment spell in Romania  For women, retraining increases prob of employment but decreases wage.  Program impacts largest for middle age and lower education level individuals.

18 Slovakia  Retraining, counseling and wage subsidy program targeted at older, long term unemployed or disabled workers  Program provided retraining, counseling and wage subsidies through “socially purposeful” and “publicly useful” (public works) jobs.  Evaluation approach taken in Lubyova and Ours (1999)jointly estimates a model of unemployment duration and of length of stay in ALMP program, using admin records of about 100,000 individuals  Program impacts:  On average, workers in ALMP program have 150% higher exit rate into employment, with larger program effects for men than women (although SPJ had neg effects for women)

19 Poland  ALMP programs provides training/retraining, wage subsidies or finances public works projects  Evaluation study of Kluve, Lehmann and Schmidt (1999) based on difference-in-difference matching approach  Program impacts  Training/retraining program increases the average employment rate over the short-term (9 months) for women and that the increase persisted over the medium term (18 months) by 17 percent.  No statistical effect on the unemployment rate, due to program’s effect on decreasing the proportion out of labor force.

20 China  Reemployment Project  Retraining program to promote employment of people laid off from government owned enterprises.  47% of participants women  Included range of policies such as job search assistance, counseling, wage subsidies, firm tax subsidies  Evaluation study of Bidani, Goh and O’Leary (2002) carried out in two cities (Shenyang and Wuhan) using matching and regression adjustment approaches  Find negative effects of training on employment and no effect on earnings in Shenyang  Find positive impact on employment in Wuhan, where the program also appears to have been better implemented.

21 Sectoral policies: Commodity Commercialization in Nepal  Vegetable and Fruit Cash Crop Program (VFC) – provided training to grow and process fruits and vegetables (e.g. to make jam).  Program impacts on time-use estimated in Raolisso, Hallman, Haddad and Regmi (2001)  VFC participation results in more time devoted to cash crops. In households with one preschooler, the program is associated with less time devoted to caring for the preschooler.

22 Programs to Increase Access to Credit, Entrepreneurship Microcredit Programs in Asia and Latin America

23 Bangladesh  Group-based lending program in rural Bangladesh  Evaluated in Pitt and Khandker (1998) using a conditional input demand approach  Few women work in regular labor market  Find that credit provided to poor households has a larger effect when women are the participants than when men are the participants, for example, in increasing household expenditure and consumption.

24 Sri-Lanka  Gender-targeted credit program  Program evaluated in de Mel, Suresh and Woodruf (2007) using randomized experimental design  Randomly gave cash or equipment grants of varying amounts to microenterprises owned by men or women  Program impacts:  Higher rate of return to grants provided to men (0% on average for women, 9% for men)  Female entrepreneurs tend to be less poor and are more likely to come from dual earner families

25 Pakistan  Hussein and Hussein (2003) summarize results from a variety of impact of evaluations of microcredit programs  Programs mainly have male borrowers, unless explicitly targeted at women  Average loan size received by women is less than half the average loan size received by men  Loans used for both business and consumption purposes  Rates of return estimated to be high, between 8-30%, but difficult to measure due to variety of income sources (including remittances)  Evidence of nonmonetary program benefits, such as increase in women’s confidence and empowerment and improvements in household’s diet.

26 Thailand  Million Baht Program studied in Kaboski and Townsend (2007)  Program provided about $25,000 to each of almost 80,000 villages  Estimate a dynamic model of credit constrained households deciding on consumption, investment and savings  Program impacts:  Consumption increased in excess of the amount of the credit, because program funds spend on productive activities  Compare costs of microfinance program to conditional cash transfer program in increasing utility and find cost of microfinance program tobe 33% lower cost.

27 Peru  Business training add-on to a FINCA group lending program in program, targeted at women  Program evaluated by Karlan and Valdivia (2006) using a randomized design  Both treatments and controls receive loans, but treatments receive minutes of additional business training at regular intervals over 1-2 year period  Program impacts:  Clients improved their knowledge of business processes and increased sales, revenues and profits.  Microfinance institutions also benefited from increased client retention and better repayment of loans.

28 Programs that facilitate work by lowering costs of work or improving working conditions Child care subsidies, parental leave, land titling

29 Child care programs: Increasing support of preschools in Argentina  Preprimary school building program, targeted initially at areas with greatest need  Evaluated in Berlinski and Galiani (2007) using a difference-in-difference approach, exploiting differences across regions in facilities built and in exposure of cohorts due to program timing  Program impacts:  Full take-up of new facilities  Increase in the probability of maternal employment by 7-14 perc. points  Impact on weekly hours imprecisely estimated.

30 Child care programs: Romania  Transition to market-based economy reduced the availability of government sponsored daycare (nurseries, preschool, kindergarten and after school programs) and increased cost.  Fong and Lokshin (2000) analyze how mother’s demand for paid care, labor force participation and working decisions respond to changes in cost of care and to changing wage offers (in part due to legislation providing mothers with 65% of their previous salary if they cared for their child during the first year. )  Develop and estimate an economic model for household decisions about consumption of child care quality, market good and leisure.  Find that a 10% increase in mother’s wage offers increased the rate of LFP by 10.9% and increases use of formal care arrangements by 4.3%.  Changes in the price of child care have a small effect on the level of maternal employment and on the use of formal care, but a policy that fully subsidizes the price of formal care would increase LFP by percent.

31 Child care programs: Guatemala and Ghana  Quisumbing, Hallman and Ruel (2003) study work, childcare and earnings of mothers in the urban slums of Guatemala City and in Accra, Ghana to explore how much subsidizing childcare would increase LFP and earnings.  In Guatemala, women often work in formal sector jobs that are difficult to combine with childcare, whereas in Guana women often work in informal sector jobs.  Conclude that subsidies for formal care or increasing availability of daycare would have a greater impact on Guatemala, where women are less able to combine work with childcare.  Also find that household demographics, such as whether there are older girls or adult females in the household, are important to the decision to use formal care arrangements.  Would be useful to examine effects on school-going of older girls.

32 Land titling programs: Peru  Facilitate women’s work by eliminating the need to staying home to protect property  Field (2003a,2003b) studies effect of a land titling program in Peru targeted at urban squatter households.  Uses diff-diff approach comparing eligible women in treated neighborhoods to eligible women in yet untreated neighborhoods, with an adjustment for differences in noneligible households.  Finds that the land titling program increased labor hours, shifted work towards outside market work and leads to a substitution of adult labor for child labor. Also, decreases fertility.

33 Land titling programs: Argentina  Galiani and Schargrodsky (2009) examines effects of land titling program in Argentina  A law was passed in 1984 that expropriated the former owner’s land (with compensation) entitling current occupations. Some owners challenged the law while others did not.  Find that it increased mother’s working, decreased fertility, increased children’s education, decreased child labor and increased investment in housing.

34 Family-friendly policies: Western Europe  Del Boca, Pasqua, Pronzato and Wetzels (2007) study effects of child care and family leave policies in 15 EU countries on women’s employment and fertility.  Estimate relationship between labor force participation and fertility and measures of countries’ relative generosity in providing child care services and in parental leave policies.  Generosity indicators are highly predictive of fertility and employment outcomes – in some cases more predictive than are household characteristics.  Conclude that family friendly policies are major determinantof work and fertility decisions and account for relatively high rates of female LFP in Sweden.

35 Conditional cash transfer programs

36 Mexican Proresa/Oportunidades Program  Mexico adopted one of the earliest CCT programs. Fiszbein et. al. (2009) provide an overview of of CCT programs around the world.  Angelucci (2008) finds that the program on average led to a 13-fold increase in wife income, because wives hardly had any income.  Parker and Skoufias (2000) study whether the Oportunidades program reduces the incentive for women (using experimental data) to work and find that the program did not influence women’s work, in part because eligibility does not depend on income and is for three years.  Some evidence that program reduces domestic violence and alcohol abuse in families receiving small amounts of transfers, but increased violence in families in which woman received large transfers and husband had low education levels.  Gulametova-Swan (2009) finds that the program in urban areas led to delayed marriage and fertility among adolescent and young adult women.

37 Nicaraguan RPS Program  Maluccio (2005) finds that the RPS CCT Program led to lower rates of labor force participation during an economic downturn among treated household members than among control group members, which increased working during the downturn.  RPS program played an important role in helping poor, rural Nicaraguans cope with the economic crisis created by the falling coffee prices.

38 Synthesis  ALMP programs in Latin American context  have been effective in reducing labor market frictions and facilitating firm- worker matches, but are not very effective in increasing worker productivity over the shot-term.  Few studies of their cost-effectiveness  ALMP programs in transition economics  Typically positive impacts in increasing women’s employment with less support for impacts on wage levels and possibly initially negative effects on wage levels.  Results in Romania and Russia suggest that highly educated and specialized workers are not benefitting much.  Would be useful to analyze program impacts in the context of a job search model – how costs of search, arrival rates and distribution of wage offers are affected. Also analyze impacts on population not participating in program.

39  Mixed evidence on impacts of gender-targeted micro-lending programs.  Pitt and Khandker (1998) found benefits of targeting programs at women (in Bangladesh) in terms of higher impacts on consumption, labor supply, children’s school-going  De Mel, Duresh, and Woodruf (2007) find that female owned enterprises have much lower rates of return and that female borrowers tend to come from less poor, dual income families (in Sri Lanka)  Hussein and Hussein (2003) found for Pakistan that loans that are not targeted at women or to the poor tend not to go to women or to the poorest families and found nonpecuniary benefits of targeting at women.  Karlan and Valdiva (2006) found significant benefits from combining a business training component with the microlending program.

40  Child Care Policies (that influence price or availability)  Effectiveness in affecting labor supply depends on the context – whether women work in more flexible informal sector or formal sector jobs (Quisumbing, Hallman and Ruel (2003))  Berlinski and Galiani (2007) find that expansion in availability of child care substantially increased maternal employment  Lockshin (1999) and Fong and Lockshin (2000) – for Russia and Romania that mother’s LFP relatively inelastic with respect to price of child care and wage increases, but full subsidy of formal care would increase LFP by 12-15%.

41  CCT Programs  At least as implemented in Mexico, do not have a disincentive for women to work.  In designing such programs, need to account for possible disincentives created by eligibility criteria.  Do appear to affect bargaining power of women and men within the household  Households participating in such programs show less labor supply response to macroeconomic shocks

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