Youth Labor Training Program PROJoven Teodoro Sanz (Planning Unit) Juanpedro Espino (Evaluation of Impacts Area) October 4, 2004

Description of Project Target group  Young men and women between the ages of 16 and 24 who have little or no labor experience, unemployed or underemployed, and who may or may not have completed their secondary education. Rationale for intervention  Young people face higher unemployment and underemployment rates (12.9% and 54% National Household Survey- Urban Areas), especially the poorest ones  Lack of links between training institutions and productive sector (structural problem in the country; educational system has been called in crisis) Project goals  To increase the possibilities for young poor people to access to the formal labor market through the acquisition of job skills and/or work attitudes.  To enhance the competition and market efficiency of training institutions.

Description of Project Project design principles  Demand driven approach  Targeting process  Evaluation of impacts  Articulation between training institutions and productive sector  Government as a promoting agent. Project duration  Projoven was created in 1996 (1st phase- UNDP, KFW, National Funds, so on).  Since 2004, IADB funds the program for the next 4 years.

Description of Project Project inputs  Information coming from household surveys  Researches related to training institutions and companies carried out by the program. YES framework for action  Equity, Environment, Entrepreneurship, Employment, Empowerment and

Project Cycle Conceptualization The program was adapted to Peruvian reality from previous similar experiences in Chile and Argentina. Some incentives for stakeholders:  The Ministry of Labor seeks to reduce overall unemployment and underemployment rates.  Training institutions increase their profits and also improve the adequacy of their courses.  Companies receive qualified workers especially trained for their needs. Implementation The program was initially implemented in Lima (1997) but it gradually expands its coverage (10 cities- goal is 14 cities).

What are the Results? Numbers of persons reached by the activities  After 7 years of implementation, the number of beneficiaries is around 37, % of them are women.  4,500 companies have participated in the program and 160 training institutions have given courses. Impact evaluation results (8th round)  After 12 months of training, 67% of program participants found a job (55% are working as salaried workers) and their monthly incomes increased by100%. Response from the community  Active participation from the parents and friends of beneficiaries.  A great number of companies have constant participation.

Plans for the Future The program is beginning its second part: IADB Loan-Beneficiaries: young poor people and 15 cities are involved in the project. To establish this type of intervention as a National Policy.

Challenges and Lessons Problems faced  Lack of institutional learning process in terms of the recognition of individual training institutions performance and the relevance of courses offerings.  Need for a legal model of contracting young people in the country.  High proportion of informal market activities. What new knowledge has been generated based on experiences?  Effective targeting is a crucial element in expanding program services and/or number of beneficiaries.  Continuous process of evaluation of impacts is necessary to carry out the program.  Interaction between entrepreneur qualifications requirements and training institutions.  The training yields returns only for those youths who complete the entire program (both phases of training).  Political Commitment is crucial for successful results.