The Impact of Skills Training on Financial Behaviour ...Baseline: Sep-Oct 2012 1815 youth registered & interviewed Randomization & Training: Dec-Aug 2012/13 Follow-Up survey: Aug-Oct

The Impact of Skills Training on Financial Behaviour, Employability, and Educational

Choice of Youth:j

Findings from a Randomized Controlled Trial in Morocco

Drew Gardiner, Jonas Bausch: ILO

Jochen Kluve: Institute for the Study of Labor

Paul Dyer: Silatech

Elena Mizrokhi: MEDA

ILO Geneva | Tuesday, 12 July 2016

Youth Economic Exclusion in MENA and Morocco:

• Labour market access in Morocco:19% unemployed; NEET youth: 40% among young men and 90% among young women (ILO 2014; World Bank 2012)

• Lack of financial inclusion: over 80% of MENA youth unbanked & low awareness of financial services among youth in Morocco (World Bank 2014)

• Focus on skills development in MENA not matched by evidence on „what works“

12.07.2016 Evidence from RCTs in Youth Employment | ILO Geneva 2

MEDA Maroc: 100 Hours to Success

• Component of larger YouthInvest project, 2008-2014, to foster economic and financial inclusion of youth

• Mix of training providing 100 hours of instruction, with modules in three areas:• Financial literacy & management• Life skills• Business and entrepreneurial skills

• Delivered over 1-3 month period at existing youth centres (typically in the evenings)

• Experiential teaching methods: live examples, case studies & high interaction among participants.


MEDA Maroc: 100 Hours to Success

• Target group: 20’000 Moroccan youth between 15-25 years of age

• Assumptions:• Additional training

teaches skills not covered by formal educational system

• Key constraints on supply side of the labour market


Evaluation Questions & Indicators

• Educational status

• Aspirations

• Labour Market Status

• Confidence

• Team work

• Problem solving

• Financial knowledge

• Bank account

• Saving / borrowing behaviour

Financial Inclusion

& Literacy

Life Skills

Educational

ChoiceEmploy-ability

12.07.2016 5

Do impacts differ across groups based on gender, age, and socio-demographic

background?

Evidence from RCTs in Youth Employment | ILO Geneva

Evaluation DesignIdentification Strategy

• Randomization: two groups sharing on average the same characteristics –confirmed by baseline survey

• Only members from the treatment group are offered place at 100 Hours to Success

• Impacts: We compare (changes in) outcomes between both groups using data from the baseline and follow-up survey


Evaluation Design & Timeline


Treatment group:

462 out of 915 youth receive training

Control group:

900 youth

Baseline: Sep-Oct 2012

1815 youth registered & interviewed

Randomization & Training: Dec-Aug 2012/13

Follow-Up survey: Aug-Oct 2015

871 youth surveyed & proxy information for 200 individuals

Follow-Up:

429 youth surveyed

Follow-Up:

442 youth surveyed

Evaluation: Caveats

• Take-Up: Only 462 out of 900 youth that were offered the training enrolled in the programme• Presenting Local Average Treatment Effects (LATE)

• Drop-Outs / Non-Attendance: Not all youth that enrolled completed the training

• Attrition in follow-up: 52% of youth could not be interviewed in endline survey• Baseline values (observables) still balanced

• Results robust to variety of sensitivity checks

• But: Little room for disaggregation!


Financial Literacy & Inclusion


***

0%

10%

20%

30%

40%

50%

60%

70%

Financial

Literacy

Index

Has saving

account

Does save Participates

in savings

group

Maintains

budget

Borrowed

since Oct

2012

Control Treatment

Life Skills


0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Satisfied with

role in

community

Community

Problem Solving

Scale

Risk-Scale GRIT-Scale

Control Treatment

Labour Market Outcomes & Educational Choice


*

*

0%

10%

20%

30%

40%

50%

60%

70%

80%

Enrolled in

education

NEET Employed Unemployed Inactive Any work

exp.

Control Treatment

Labour Market Status & Education: Men, Follow-Up


0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

In-Education Not-in-Education

Employment Unemployment Inactivity

Labour Market Status & Education: Impacts for Men


-0.086

-0.188-0.188

-0.022

0.391

0.093

-60%

-40%

-20%

0%

20%

40%

60%

Education: Yes Education: No


Labour Market Status & Education: Women, Follow-Up


0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

In-Education Not-in-Education


Labour Market Status & Education: Impacts for Women


-0.007

-0.106

0.0510.088

-0.041

0.016

-60%

-40%

-20%

0%

20%

40%

60%

Education: Yes Education: No


Findings: Summary

• Maintaining bank accounts: Yes!Changing financial behaviour: (rather) No!

• Life Skills: No evidence of long-term impact

• Increased investment education: both in terms of length and heightened attention… but only for male youth


Conclusion: Lessons learned

• Encourage education: Skills trainings can trigger greater investment in human capital

• Important if lack of skills is a key constraint for young people in the labour market (are there high skill premia?)

• But: (formal) education ≠ job guarantee (cf. SWTS Egypt)

• Targeting: youth (15-25 years) might still be too diverse when aiming at school-to-work transition and/or financial training:

• Striking and increasing gender differences wrt labour market participation: 44% men vs, 12% women employed at time of follow up (avg. age: 23)

• Saving requires income and borrowing collateral


Avenues for future research in youth employment

• How to increase take-up and reduce drop-out? (i.e. low relevance/quality vs. low self-control vs. lack of information)

• How to impact (financial) behaviour with classroom based trainings?

• Global evidence favours multi-pronged interventions but how to combine components best?Financial literacy, life skills, business management, internships, apprenticeships...


Thank you for your attention!

Documents

The Impact of Skills Training on Financial Behaviour ...Baseline: Sep-Oct 2012 1815 youth registered & interviewed Randomization & Training: Dec-Aug 2012/13 Follow-Up survey: Aug-Oct