Results – Systematic review of youth-oriented active labour market programmes
For many years, the Dutch Ministry of Foreign Affairs has been supporting several programmes that address youth unemployment in developing countries. It is not always easy to determine what interventions work best and are most effective. A systematic review that was published in 2017 provided more insight into the results achieved by youth-oriented, active labour market programmes. Since then, a lot of new research has become available in this area. For this reason, the earlier review has been updated.
Aim of the systematic review and meta-analysis
The update of the earlier review was conducted by a group of researchers from the International Labour Organization (ILO) and the World Bank. They looked into the effectiveness of youth-targeted, active labour market programmes (ALMPs): do they succeed in improving labour market outcomes of young people? The research synthesizes the empirical evidence of the past three decades from impact evaluations of such programmes.
Main characteristics of the review process
The review has benefitted from a surge in impact evaluations of youth employment programmes in recent years which resulted in a significantly expanded database. From this database, 228 reports were selected for the review. This report concerns studies that provide reliable insight into the effectiveness of over 170 programmes that have been carried out to improve youth labour market outcomes. To be included in this sample, the studies had to have been conducted in the period 1990-2020 and meet the following criteria:
- Investigate an ALMP that was primarily targeted at young people (broadly applying the age range of 15 to 35 years) and was designed to address their labour market constraints;
- Assess an ALMP that included at least one of the following interventions:
- Skills training (outside the formal education system). with employability skills ranging from job-specific technical skills to non-technical soft (or core) skills, such as self-management, teamwork and communication, as well as digital skills.
- Entrepreneurship promotion with the review clustering interventions across the following services: business advisory and/or mentoring; business skills; access to markets and value chains; direct credit or facilitating access to credit; monetary or in-kind (start-up or growth) grants; and micro-franchising initiatives or mechanisms.
- Employment services, with the review distinguishing between services focused on counselling, placement and on financial support for the job search.
- Wage subsidies, with the review distinguishing between programmes that reduce employers’ social security contributions or reduce their labour or wage cost and those that provide direct payments (subsidies) to young people.
- Public works programmes and labour-intensive public employment programmes that offer direct, short- term employment to young people in infrastructure, social development or community projects often in times of crises.
- Measure change in at least one primary outcome of interest, i.e.:
Outcome of interest Outcome measures investigated Employment Employment probability; unemployment probability; participation rate; hours worked; unemployment duration and quality of employment (contract, fixed term, benefits) Earnings Earnings or income; household income; consumption; salary or wage Business performance Profits; sales; number of employees or jobs created; capital and investment; business creation; business survival
- Estimate the causal effect of the intervention using an experimental or quasi-experimental evaluation design to identify counterfactual outcomes in the absence of the intervention.
In this research, effect size is given in terms of SMD – standardized mean differences. This study interprets effects ranging between 0 and 0,05 SMD as small. The effect is interpreted as medium between 0,05 and 0,20 SMD and when the SMD is between 0,20 and 1 SMD, the effect is large.
Key overall findings of the review
The most important findings on the effectiveness of ALMPs are summarized below. In the explanation of these findings, specific attention is paid to the results in low and middle-income countries and those in high-income countries.
Additionally, the review found an encouraging trend in the inclusion of cost information and cost–benefit analyses in impact evaluations since the mid-2010s. Nearly three quarters of available cost– benefit analyses reported that programme benefits surpassed programme costs. These analyses were overrepresented among skills training interventions. More attention is needed to assess the cost-effectiveness of other types of intervention. At the same time, this systematic review found limited evidence on the relative effectiveness across intervention components or from the combination of different intervention types.