Facilitating the School to Work Transition of Young Women WORLD BANK Gender Innovation Lab for Latin America and the Caribbean (LACGIL)1 POLICY BRIEF: November 2022 Key Messages • In Latin America and the Caribbean, the school-to-work transition is more challenging for girls than boys due to societal norms. • Young women who drop out of school are more likely to be employed in less stable, lower-paid jobs in the informal sector. • Work-study programs can help to address the gender gaps in the school-to-work transition. • In Uruguay, a national work-study program o ered by a lottery system significantly improved the school-to-work transition for young girls and boys. • Key features of the program included providing high-quality jobs with a focus on human capital accumulation that is compatible with schooling. Context 2020). Early work experience can also help youth demonstrate to employers that they are motivated or productive (Farber & Transitioning from school to work is a crucial period in the lives Gibbons, 1996; Pallais, 2014). Furthermore, the income from of boys and girls. Youth who drop out of school typically lack the skills required for formal sector employment. Many young people end up working in less stable, lower-paid jobs in the informal sector or remain unemployed, impacting their lifetime earnings path (De Hoyos et al., 2016). Gender Innovation Lab for Latin America There is evidence that the school-to-work transition is harder for and the Caribbean (LACGIL) girls than boys. The share of youth who are not in education, employment, or training (NEETs) is significantly larger among The LACGIL supports impact evaluations and inferential women than among men in Latin America (World Bank, 2021) and studies to find out what works to close gender gaps in human other regions (OECD, 2017). Several factors are associated with capital, economic participation, social norms, and agency. this gap, including the greater burden of unpaid care work for girls, early marriage and teenage pregnancy, and the disconnect Additionally, the Lab disseminates findings to improve between the labor market and the educational system (World operations and policy making in the design of cost-e ective Bank, 2021). Furthermore, working girls often hold lower-quality interventions that tackle gender inequalities and drive jobs o ering lower pay, less job security, and more informality change. (OECD, 2017; Bonnet et al., 2019). To accomplish this, the LACGIL works in partnership with Work-study programs might smooth the school-to-work transi- World Bank units, aid agencies and donors, governments, tion. Economic theory suggests that if youth work while they are nongovernmental organizations, private sector firms, and still in school, they may acquire new skills in the workplace that researchers. The LACGIL has provided direct support to over cannot be obtained at school (Heckman et al., 2006; Alfonsi et al., 22 operations in the region, impacting the design of several operations. 1 his note was prepared by Diego Ubfal. It received useful comments from Carlos Rodriguez Castelan, Jacobus de Hoop and Kavell Gianina Joseph. 1 this work experience could support youth in furthering their program using yearly lotteries organized in most main cities. When studies (Keane & Wolpin, 2001). However, working can take time selected, youth are o ered a part-time (20-30 hours a week) away from studying and negatively a ect school learning, human clerical position, focused on support tasks, that lasts between 9 capital accumulation, and career path (Eckstein & Wolpin, 1999). and 12 months and cannot be renewed. Participants must be enrolled in secondary education or university at the time of The evidence on the e ect of work-study programs on formal application and throughout the program. earnings and education outcomes is limited and inconclusive. There is scarce evidence on the di erential e ects of work-study Le Barbanchon et al. (2021) studied the e ects of this program programs on boys and girls and whether these programs can close using social security data matched to over 90,000 applicants the gender gap in formal earnings. from three editions of the program. Le Barbanchon et al. (2021) combine administrative data on formal earnings and education with a survey of a representative sample of 1,616 students who applied to the fifth edition of the program. The survey was in the field just before the end of most program jobs. It includes a detailed module asking youth about their main activities in the 24 Study Description hours preceding the interview. Exploiting the lottery allocation of the program, the study identifies significant increases in earnings and secondary school enrollment over the four post-program years for the average participant. In a recent paper, Le Barbanchon et al. (2021) studied the e ects of a national work-study program in Uruguay called Yo Estudio y This policy brief exploits administrative and survey data from the Trabajo. The program is a national youth employment initiative Le Barbanchon et al. (2021) to provide novel evidence on the targeting Uruguayan students aged 16 to 20. It o ers them a e ects of the work-study program by gender. It first looks at how first-time, well-paid, formal work experience in the main students of both genders change their time use to be able to both state-owned companies of the country (e.g., the work and study. Then, it presents the e ects of the program on government-owned telecommunications and electricity formal earnings separately for girls and boys. companies and the national bank). Youth are selected into the 2 What is the evidence? Program e ects on time use The program led to a strong increase in time spent working for program job. The upper-right panel reveals that the program both boys and girls, with limited impacts on time spent studying. generated some reductions in study time, both inside and outside Figure 1 shows the time used by hour of the day for girls and boys school, which were a little larger (but not significantly so) for boys. selected by the lottery (O ered a job by the program) and those Interestingly, youth o ered the program job compensated by not selected by the lottery (Control group). Since job o ers are studying more at night.2 Finally, the bottom panels show that the randomly allocated, the distance between the two curves program leads to reductions in time spent on household chores represents the intention-to-treat e ect of the program at each and leisure. The share of girls dedicating time to household chores hour of the day. The upper-left panel shows the e ects of the is twice that of boys; thus, the e ects are much more prominent in program on the time youth spend working, which is similar for absolute value for girls. The reductions in leisure time generated by boys and girls. These e ects are driven by a large increase in the the program are similar across gender. probability of working during the program year for youth o ered a FIGURE 1: PROGRAM EFFECT ON TIME USE Working Working Studying Studying 3 3 3 3 Proportion Proportion Proportion Proportion 2 2 2 2 1 1 1 1 0 0 0 0 1 5 9 13 17 21 1 5 9 13 17 21 1 5 9 13 17 21 1 5 9 13 17 21 Time of the Day Time of the Day Time of the Day Time of the Day HH Chores HH Chores Leisure Leisure 3 3 5 5 4 4 Proportion Proportion Proportion Proportion 2 2 3 3 2 2 1 1 1 1 0 0 0 0 1 5 9 13 17 21 1 5 9 13 17 21 1 5 9 13 17 21 1 5 9 13 17 21 Time of the Day Time of the Day Time of the Day Time of the Day O ered: Boys O ered: Girls Control: Boys Control: Girls Note: This figure plots the time used for boys and girls by the time of the day. In the left panel of each of the four quadrants, the solid blue line is for boys who won the lottery and were o ered a program job, while the red dashed line is for boys not o ered a program job (control group). In the right panel of each of the four quadrants, the solid green line is for girls who won the lottery and were o ered a program job, while the red dashed line is for girls not o ered a program job (control group). 2 It is important to note that Le Barbanchon et al. (2021 find positive extensive margin e ects of the program on high school enrollment for both boys and girls. The extensive and intensive margin e ects on study time almost cancel each other, and the net e ect is not large enough to a ect educational performance, as there are no significant e ects for any gender on reported grades. 3 Program e ects on future formal earnings Figure 2 uses social security data to graph trends in formal Overall, both boys and girls significantly benefited from the earnings for more than 46,000 boys and girls who applied to the work-study program. They saw positive e ects on earnings program’s first edition. The dashed lines show the average without seeing their schooling outcomes a ected. During the quarterly earnings of the treatment group, defined as those youth program year, average earnings are almost identical for girls and who worked at least one month on a program job, while the boys in the treatment group. This is not surprising since program dashed lines plot the average quarterly earnings of the appropriate rules require that participating firms pay equal salaries regardless comparison group (compliers in the control group).3 Before of gender. At the end of the program year, when youth need to get applying to the program, average earnings for both groups are new jobs, treated earnings decrease sharply and converge back to close to zero. This is in line with the eligibility condition of the the control earnings level. After this convergence, treated earnings program of no formal earnings in the 90 days before application. follow an upward trend but at a steeper rate than control earnings. After application, the control group mean steadily increases as Two years after the program ends, treatment e ects (as indicated more youth enter the labor market. It reaches around $1,500 per by the distance between the dashed and solid lines) are quarter for boys and just over $1,000 for girls four years after the statistically significant for both boys and girls. Overall, the program. The gender gap in earnings (girls earn around 3/4th of treatment e ects averaged over the four post-program years are what boys earn, as indicated by the distance between the solid slightly larger for boys than for girls, but the di erence is not lines in Figure 2) is observed over the four post-program years for statistically significant. youth in the control group and is consistent with the national gender gap in earnings. FIGURE 2: EVOLUTION OF THE YOUTH IN THE PROGRAM COMPARED TO THE CONTROL GROUP 2000 1500 Quarterly Earnings (USD) 1000 500 0 App - 4q Application First Jobs (FJ) FJ + 4q + 8q + 12q + 16q + 20q Complier Control Mean: Boys Complier Treatment Mean: Boys Complier Control Mean: Girls Complier Treatment Mean: Girls The program would e ectively close gender gaps in youth formal earnings if o ered only to girls. Girls participating in the program broke the gender earnings gap and achieved boys’ earnings levels in the control group four years after the program. However, the gender gap persists when comparing girls to boys who participated in the program, which suggests that social norms or other factors, in addition to di erences in early work experience, also contribute to the gender gap in earnings. Le Barbanchon et al. (2021) also highlight significant reductions in the share of NEETs among the youth who participated in the program, pointing to work-study programs as a promising solution to the problem that widely a ects countries in Latin America and the Caribbean. 3 Since only youth who won the lottery can take up a program job, there are no “always takers,” and the e ects estimated using instrumental variables can be interpreted as the treatment e ect on the treated. The point estimate is equivalent to the di erence between the complier control mean, and the complier treatment mean portrayed in the graph. See Le Barbanchon et al. (2021) for more details. 4 Policy Recommendations Work-study programs can be a powerful tool to smooth the compensation, and 3) compatibility with schooling. Programs school-to-work transition for youth. The evidence from Uruguay o ering low-quality summer jobs did not improve future earnings indicates that they can improve the labor market outcomes of both for students in the U.S. (Gelber et al., 2016; Davis & Heller, 2017) or girls and boys without compromising their educational the Philippines (Beam & Quimbo, 2021). Jobs that o er achievement. The program significantly increased youth formal opportunities for human capital accumulation, as in the Uruguayan earnings, which can also help recover its costs through taxes. case, can make a di erence. Moreover, competitive wages and equal pay to boys and girls can encourage youth participation. Scaling-up the program requires engaging private sector firms. In Finally, flexible part-time schedules are necessary to allow youth to the Uruguayan program, jobs were o ered in the main continue their studies while accumulating relevant work state-owned companies in Uruguay. The program allowed these experience. These features are present in programs such as the companies to o er parttime one-year contracts that are more Federal Student Work Experience Program in Canada and the flexible than the standard contracts available in the public sector. Federal Work-Study Program in the U.S. and could be replicated in Interestingly, the program e ects were observed on private sector developing countries. post-program earnings, highlighting the transferability of general skills acquired during early work experience. The previous literature has focused on programs for out-of-school marginalized students. Work-study programs can target youth before they drop out and give them incentives to continue their studies while acquiring relevant skills to face the transition from school to the labor market. 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