from EVIDENCE to POLICY Learning what works for better programs and policies February 2016 KENYA: Can the Private Sector Help Train 103114 Youth for Jobs? Young adults in low-income countries face few job pros- business needs to help unemployed youth prepare for jobs pects. Across the developing world, about 75 million young that are or will be available? people are unemployed and hundreds of millions are under- The World Bank is committed to working with gov- employed. Lack of jobs ernments to give everyone the ability to lead productive is one obvious reason. and healthy lives and getting youth ready for and in jobs is Another is that many part of this. In Kenya, the World Bank supported a pilot young adults lack the program to give unemployed youth access to job train- skills, education, and ing and private sector internships. An impact evaluation JOBS AND SKILLS work experience to fill found that those who went through the program were productive jobs that more likely to end up with paid employment, and that are available. Job train- young women in particular were also more likely to open ing programs can be a a bank account and save money. The Government of Ke- solution, but they can’t nya and the World Bank are using the results to help help if the training doesn’t meet the needs of potential em- expand the program to reach more young people and ployers. Is there a way to successfully pair programs with give them the opportunity to learn skills and find jobs. Context Unemployment among young adults aged 16 to 22 is very The program ran for six months, with three months high in sub-Saharan Africa, where young people make up of training, followed by a three-month internship. The 37 percent of the working-age population and 60 percent training program included two weeks of life-skills, such as of the total number of unemployed. The problem tends communication and dispute resolution skills, five weeks to be more acute in urban areas. In Kenya, for example, of general business training, and five weeks of training the unemployment rate among young women between the in a specific sector. The internship included on-the-job ages of 15 and 24 rises as high as 40 percent in urban areas. training and mentoring, provided by the employers. And many young people working are underemployed, for Most participants were offered internships in the formal example, in low-paying jobs that are below their skills level. sector and with master craftsmen in the informal sector. The Government of Kenya launched the Kenya Youth Participants received a monthly stipend of 6,000 Kenyan Empowerment Project in 2010 to offer skills training and pri- shillings (currently about $60) to compensate them for vate sector internships to young adults living in Nairobi and their transportation and food costs. Employers also received Mombasa. The pilot program, supported by the World Bank 3,000 shillings (about $30) each month to offset the time and implemented by the Kenya Private Sector Alliance, tar- spent overseeing the interns and reimburse them for any geted young men and women between the ages of 15 and 29. materials used. On average, the program cost about 97,000 They had to have finished at least eight years of school and to shillings (about $950) per person trained, which included the have been out of school for at least one year by the time they compensation paid to employers and trainees. About 14,000 applied for the program. They also needed to be unemployed. young people received training between 2011 and 2014. Evaluation An impact evaluation was built into the program, which interns, selection to the second treatment group wasn’t initially offered 1,300 slots for unemployed youth in Nai- completely random. Researchers sought to overcome the robi and Mombasa. Because the program was oversub- bias this introduced by using an instrumental variable ap- scribed, researchers were able to randomly select 2,100 proach to estimate the impact on those people who were applicants to take part in the evaluation. Researchers randomly picked to participate in the life skills training stratified applicants at baseline based on demographic and then picked by employers for an internship. and other characteristics and assigned them to one of The baseline survey was conducted in July and August two intervention groups or a control group. In the first of 2012, before the six-month program started. The end- treatment group, 300 applicants were offered a two-week line survey was done between November and December life skills training class only. The second treatment group 2013, about seven months after the internships ended. Be- consisted of 850 applicants who were offered both the life cause of problems with the endline data collection, anoth- skills training and the opportunity to be considered for job er endline survey was conducted by phone in July 2014, JOBS AND SKILLS training and internships with formal private sector firms about 14 months after the program had ended. About 77 or master craftsmen. The third group of 950 individuals percent of those surveyed at baseline were reached at end- served as the control group and weren’t offered the pro- line, which is similar to other studies of urban youth in gram. Because employers wanted to be able to pick their developing countries. Results Young adults—particularly men— who were ment was among those who had interned in finance, infor- placed in internships were more likely to have mation and communications technology, and tourism. paid work after the program ended than those Among young women, there was a 6.7 percentage point who weren’t in the program. increase in employment for those who were offered an intern- ship, and an 8.7 percentage point increase among those who About 14 months after the internships ended, young men completed the full program. However, the impact measured and women who had internships were more likely to be on young women’s employment isn’t very reliable. When re- employed. Almost 80 percent of young men offered intern- searchers went to survey young women 14 months after the ships through the training program reported that they were program ended, they were unable to find and interview many now in paid work, compared with 69 percent in the control of the women who had served in the control group. Because group, a 10.8 percentage point gain. The increase jumped attrition among women in the control group was higher than by 14.2 percentage points for those who had completed the attrition in the treatment group, it wasn’t possible to accu- full training program. Most of the gain came from wage em- rately measure the impact of the program on young women. ployment, which was the goal of the program, rather than Further research would be needed to confirm what appear an increase in self-employment. The best boost in employ- to be positive findings. This policy note summarizes Policy Research Working Paper #7404, “The Impact of Private Sector Internship and Training on Urban Youth in Kenya,” Maddalena Hon- orati, August 2015. For full paper visit: http://documents.worldbank.org/curated/en/2015/08/24958910/impact-private-sector-internship-training-urban-youth-kenya There was also a jump in monthly earnings for Young men and women in the program were encouraged older men who took part in the program, and an to open a bank account and receive their stipends that way, even bigger increase among those in Mombasa, and this clearly had an impact on the use of bank accounts. which is the country’s second biggest city after Among young women, being in the program also increased the capital Nairobi. the chance that they would save money in a bank account. This increase translated into about 5,000 shillings (about Most people who started the program completed $50) more a month. Among men older than 24, monthly it, but more might stick it out if adjustments wages went up by about 12,000 shillings (about $120). were made. The biggest wage increases were in Mombasa, a coastal city with a big tourism industry. Youth who had been placed Around three out of four people selected by employers to in an internship there later reported monthly earnings participate in the full program—two weeks of life skills that were about 9,000 shillings (about $90) higher than training, the five week core business training, the five week the control group. Among youth who had completed the internship, their reported monthly wages were 11,424 shillings (about $110) higher than youth in the control group, who reported an average monthly wage of 9,935 shillings (about $97). In other words, young people placed in an internship saw their wages jump by around 90 percent. Young women offered an internship also saw wage increases. At least in the working paper, the results on earnings for women are presented as reliable (not as those as employment). If this is the case, maybe worthwhile Women in the program highlighting that these results do seem to be more robust, Were average age of 24 despite the attrition issue. There was also an increase More than 20 percent had one or two children in monthly wages by 7,500 shillings (about $73).This 53 percent had some university translates into a 132 percent increase in earnings compared 29 percent had finished high school with young women who weren’t in the program. 18 percent had only a primary school education Young men who completed the program also ended sector specific training, and the three month internship— up working more hours each week, and were more completed it. A higher proportion of people completed it in likely to have a written employment contract. Mombasa than in Nairobi. Most people who dropped out did so before the Those who completed the full program worked on average internships started. The problem might have been the time 26 hours a week, which was three hours more than those lag between the end of the training program and the start who weren’t in the program. Young men who had been in of the internship. In interviews, some participants also the program were also more likely to be working with an said they were dissatisfied with their internship placement employment contract. because it didn’t match their preferences and educational backgrounds. Shortening the time period between the Those who completed the internships were more training and the start of the internships, as well as working likely to open bank accounts and save money in to connect participants with businesses in their chosen field, the accounts. helped improve retention in subsequent cycles of the pilot. The life skills training alone didn’t have any young people. However, life skills training on its own impact on employment or earnings. didn’t make any significant difference in people’s ability to be employed. It’s also possible that there was an initial im- Combining life skills training with technical training and pact, but that it faded over time, as participants were sur- work experience successfully improved employment for veyed 18 to 22 months after they completed the training. Conclusion Finding effective ways to help unemployed and underem- urban settings throughout Africa. In addition to increas- ployed youth make the transition from low-paid informal ing employment, the program encouraged youth to par- labor to higher paid wage labor is a major challenge for ticipate in more skills training and internships, and got policymakers across the globe. The results from this study more young people to open bank accounts and use them. contribute to a growing body of evidence on the role that The results mirror other similar findings from different JOBS AND SKILLS training programs can play in addressing this challenge. countries in Latin America, suggesting private sector The findings suggest that offering young people training training and internships, provided in collaboration with and work experience in the private sector is a promising governments, are a promising way to increase youth op- way to put youth in jobs and increase their earnings in portunity in a range of settings. The Strategic Impact Evaluation Fund, part of the World Bank Group, supports and disseminates research evaluating the impact of development projects to help alleviate poverty. The goal is to collect and build empirical evidence that can help governments and development organizations design and implement the most appropriate and effective policies for better educational, health and job opportunities for people in developing countries. For more information about who we are and what we do, go to: http://www.worldbank.org/sief. The Evidence to Policy note series is produced by SIEF with generous support from the British government’s Department for International Development. THE WORLD BANK, STRATEGIC IMPACT EVALUATION FUND 1818 H STREET, NW WASHINGTON, DC 20433 Produced by the Strategic Impact Evaluation Fund Series Editor: Aliza Marcus Writers: Maddalena Honorati and Laura Burke