Tackling Youth Unemployment: Evidence from a Labor Market Experiment in Uganda

Journal Article
Published on 1 November 2020

The open access version of this article is available here at Econometrica.


Alfonsi, Bandiera, Bassi, Burgess, Rasul, Sulaiman and Vitali (2020) design a labor market experiment to compare demand- and supply-side policies to tackle youth unemployment, a key issue in low-income countries. The experiment tracks 1700 workers and 1500 firms over four years to compare the effect of offering workers either vocational training (VT) or firm-provided training (FT) for six months in a common setting where youth unemployment is above 60%. Relative to control workers, the authors find that, averaged over three post-intervention years, FT and VT workers: (i) enjoy large and similar upticks in sector-specific skills, (ii) significantly improve their employment rates, and (iii) experience marked improvements in an index of labor market outcomes. These averages, however, mask differences in dynamics: FT gains materialize quickly but fade over time, while VT gains emerge slowly but are longlasting, leading VT worker employment and earning profiles to rise above those of FT workers. Estimating a job ladder model of worker search reveals the key reason for this: VT workers receive significantly higher rates of job offers when unemployed, thus hastening their movement back into work. This likely stems from the fact that the skills of VT workers are certified and therefore can be demonstrated to potential employers. Tackling youth unemployment by skilling youth using vocational training pre-labor market entry therefore appears to be more effective than incentivizing firms through wage subsidies to hire and train young labor market entrants.


Livia Alfonsi

University of California, Berkeley

Oriana Bandiera

London School of Economics

Vittorio Bassi

University of Southern California

Robin Burgess

London School of Economics

Imran Rasul

University College London

Munshi Sulaiman

Save the Children

Anna Vitali

University College London