Cover Image
close this bookThe Transition of Youth from School to Work: Issues and Policies (IIEP, 2000, 188 p.)
close this folderChapter II. Training unemployed youth in Latin America: same old sad story? by Claudio de Moura Castro and Aimée Verdisco
View the documentIntroduction
View the document1. On the elusive art of training
View the document2. Training to improve employability: experiences from Latin America
View the document3. Lessons
View the document4. Conclusion: are youth training programmes still a good idea?

2. Training to improve employability: experiences from Latin America

In an effort to tackle the magnitude of youth unemployment and underemployment, countries across the region have launched various programmes designed to integrate youth into the labour market (see ILO/Caribbean Office, 1996; ILO/CINTEFOR, 1998 for further discussion). These programmes provide a general mix of classroom instruction and practical work experience. Within this context, programmes undertaken in Chile, Argentina and Brazil draw special attention - if nothing else because they are big and expensive. Part and parcel of the paradigm shift described above, training is emphasized as a means through which, and with which, youth can be integrated into the labour market or brought back into the formal system of education. The Chilean and Argentinian programmes are demand-oriented in their approach to training and, operate within the framework of a simple rule of 'no demand, no trainin'. The Brazilian programme, also demand-oriented in its philosophy, differs from its 'Joven' counterparts in that it builds on, yet runs parallel to, a well-established and solid training system. All three programmes have produced at least some positive results.

2.1 Shifting the paradigm: Chile Joven

Of the three cases under study, Chile Joven is the oldest. Created in 1992 with support from the Inter-American Development Bank (IDB), the project - at the time - offered a novel and seemingly radical approach to youth training. Rather than modernizing, reforming or otherwise strengthening existing institutions, or supporting the establishment of new institutions, Chile Joven sought to recast the mechanisms through which training services were delivered. In short, the idea was to create a market for training services targeted to low-income sectors of society, many of which remained outside the network of services provided either through the Ministry of Education or the National Training and Employment Office (SENCE), a dependency of the Ministry of Labour and Social Welfare (BID/EVO, 1998:6-8).

At the time of its conception, approximately 200,000 - or 13.0 per cent of - youth (15-24) were unemployed, underemployed or outside the formal education system (Ministerio de Trabajo y Previsiocial, 1997:9); the majority of these youth came from low-income sectors of society. Throughout the programme, this rate varied between 11.0 per cent (first trimester of 1994) and 17.0 per cent (second trimester of 1996). That youth unemployment had reached such proportions was paradoxical in that it coincided with a time of growth both in the Chilean economy and in the demand for labour (see Table 1).

Table 1. Selected labour market and macroeconomic data

Argentina

1991

1995

Youth, 15-24

Activity rate

48.1

52.3

% Unemployed

-

24.6

Total population

Activity rate

-

41.50

% Unemployed

5.8

18.8

Macroeconomic indicators

GDP (in millions, 1990 prices)

76,156

92,428

GDP (% change over previous year)

10.5

-4.6

Consumer prices (1990 = 100)

272

404

Labour force growth

1986-1993

1980-1996

1.3

1.6

Brazil

1992

1995

Youth, 15-24

Activity rate

67.2

65.2

% Unemployed

10.2

11.4

Total population

Activity rate

47.9

48.7

% Unemployed

6.5

6.1

Macroeconomic indicators

GDP (in millions, 1990 prices)

11,500

13,284

GDP (% change over previous year)

-0.9

3.9

Consumer prices (1990 = 1)

56

41,044

Labour force growth

1986-1993

1980-1996

2.1

2.8

Chile

1994

1996

Youth, 15-24

Activity rate

41.6

37.5

% Unemployed

13.2

12.8

Total population

Activity rate

38.6

% Unemployed

5.9

5.4

Macroeconomic indicators

GDP (in billions, 1990 prices)

12,675.5

15,055.6

GDP (% change over previous year)

5.7

7.4

Consumer Prices (1990 = 100)

177

205

Sources: International Labour Organization, International Labour Statistics Yearbook, (Geneva: various years); International Monetary Fund, International Financial Statistics, 1998, (Washington, DC: International Monetary Fund, 1999).

Given this context, Chile Joven operated from the assumptions that the lack of marketable skills was the cause behind the masses of idle youth and, by extension, that skills could be improved through training. Marketable skills, provided through classroom study followed by practical, in-firm work experience3, in turn would improve opportunities for employment or further study. Through a social marketing campaign and incentives directed towards both youth and enterprises, Chile Joven initially targeted 100,00 low-income youth - a goal that, by the end of the programme, was exceeded by 28 per cent (there was a total of 128,106 participants)4.

3 The programme provided for approximately 200-250 hours of classroom instruction and three months of practical experience within a firm or enterprise. The programme covered all costs associated with these activities; participants were also given subsidies for travel and food, and accident insurance.

4 This figure refers to the programme as a whole. The programme consisted of four subprogrammes: training and on-the-job experience; apprenticeship with classroom instruction; training for self-employment; and training and personal development for young people. It should be noted that the text focuses on the first subprogramme, training and on-the-job experience. This subprogramme accounted for 70 per cent of all programme beneficiaries: 90,839 youth, 48.6 per cent of whom were women, participated in the sub-programme. The apprenticeship with classroom instruction subprogramme accounted for 2 per cent of beneficiaries; the training for self-employment, 8 per cent; and the training and personal development subprogramme, 20 per cent.

2.1.1 The 'nuts and bolts' of Chile Joven

From start to finish, Chile Joven was based on a demand-oriented approach to training. Consistent with the chequebook model outlined above, training services were contracted out through processes of public bidding. The state, using its technical competences and legal attributes, established the rules of operation, including selection criteria and financing formulae. All facets of service delivery - from the identification of the demand for labour, to the preparation of courses and materials, to the execution of courses - fell to the contractors (Organismos Ticos de EjecuciOTEs or training operators, authorized by SENCE); funding thus was split from execution.

This was a major departure and a great stride ahead. The new model gave responsibilities for programme evaluation to the funders. This avoided the chronic problems of civil service operation that plagued the old model where such responsibilities fell to the bureaucracy - programme executioner and evaluator. It also created a system of checks and balances between execution and funding decisions. Perhaps even more importantly, the new (chequebook) model decentralized decision-making to the training operators. In this way, the operators served as intermediaries between the demand for training and its supply. From the side of demand, they could deal directly with naturally segmented and variable labour markets and, given the decentralization of the system, could provide training for different occupations in different communities. From the supply side, these same operators were held responsible for finding employment opportunities for their trainees.

Eligible bidders for the contract included training organizations of all types, ranging from the private, non-governmental, and public. Those awarded training subsidies had to demonstrate the closest and most cost-effective match between the services offered and the demand for such services in the labour market. Actual payment, however, was based on student progress and programme completion; there were financial penalties for drop-outs.

Thus designed and implemented, Chile Joven was intended to respond to the productive sector's real demand for training in areas of specialization where demand actually arose. In doing so, it took a creative approach to matching training with the demand for labour, alluded to above. Rather than contracting on the basis of a demand study conducted prior to the implementation of the programme, all responsibilities for the identification of labour demand fell to the operators. This was consistent with the basic premises of the programme. Given that contracts were to be awarded on the basis of the closeness of the training-demand match, neither the level (e.g. micro- or macro-) at which demand existed, nor the industry (e.g. traditional or non-traditional) in which it was located, mattered. In fact, the programme encouraged - if not compelled - the OTEs to become surveyors of demand in areas beyond the traditional trades and below the large enterprises. Syllabi were driven by demand and, as a result, courses could be and often were tailor-made to needs of enterprises.

In awarding training subsidies, the substantiated demand for labour constituted the overriding selection criterion, although other criteria (e.g. course content, institutional capacity for execution, the quality of the training proposed, cost per student) were also taken into consideration. To substantiate this demand, the OTEs were required to arrange internships for trainees in private enterprises; as proof of this arrangement, a letter of commitment from these enterprises was also required. These requirements served as proxy indicators for closeness of the training-demand match: the willingness of an enterprise to offer an internship to programme participants signalled an unmet demand in the specific skill area. Since training was outsourced to any provider fulfilling these conditions, the search for internships was conducted by thousands of prospective sellers of courses to the programme who scanned the country in search of demand for internships. The willingness to take a trainee as an intern implicitly defined market niches where there was a good potential of demand. Indeed, upon programme completion, an estimated 55 per cent of participants were employed in occupations using the skills they acquired during training; of these, 32 per cent were hired in the same firm where they had done their internships (Paredes et al., 1996:27).

2.1.2 Programme successes: good targeting and good results

Chile Joven proved to be successful in many respects. It was well targeted. As noted above, in terms of coverage, the programme surpassed its original goal: more than 128,000 youth from across the country participated in the programme, 90,839 effectively took part in the training and on-the-job experience subprogramme. Of these, the overwhelming majority represented the target population: 95.6 per cent came from low-income sectors of society5, 82 per cent started the middle level of schooling (media), but only 54.4 per cent finished, and 79.3 per cent were below the age of 24 (Ministerio de Trabajo y Prevision Social 1997:60-61). This was a fair targeting to needy youth.

5 This figure is distributed in the following manner: 43.4 per cent from below average income groups; 49.2 per cent from low income groups; and 3.3 per cent from very low-income groups. Participants from high, above average and average social economic groups comprised 3.8 per cent of the total. It should be noted that figures for the other programmes are similar: 98.2 per cent of beneficiaries in the training and personal development subprogramme came from low-income sectors, as did 92.1 per cent in the apprenticeship with classroom instruction subprogramme and 99.8 per cent in the training for self-employment subprogramme.

Above and beyond producing good targeting mechanisms, the programme also produced good results. The programme was cost-effective, with an average expenditure of US$2.91 per hour-just under half the amount spent in Argentina (discussed ahead). It was also 'socially profitable' (Paredes, et al., 1996:3). The majority of participants were either employed (55.5 per cent) or in school (3.9 per cent) after the programme. These figures compared favourably to those of the control group6: 41.3 per cent was employed and 5.5 per cent had returned to school. Employment differences were even greater for women (45.5 per cent versus 27.0 per cent, respectively; Ministerio de Trabajo y Previsiocial, 1997:63). To some extent, then, efforts to target women proved successful (overall, the employment rate was almost 20 per cent higher for men than for women). Wages of the programme participants compared favourably to those of the control group as well. This performance compared well to similar programmes in industrialized countries (see Lindley, 1996; Silverberg et al., 1998; Hollenbeck, 1997,1996; OECD, 1996; O'Leary, 1995; Kopp et al., 1995; Stem et al., 1994)7.

6 The control group was made up of youth residing in the same neighborhood and possessing the same socio-economic characteristics as programme participants; see Ministerio de Trabajo y Previsiocial, 1997:62.

7 Although much has been written about youth training programmes in industrialized countries (e.g. see those sources listed in the text), there are few impact data. In what generally can be deduced from the literature, such efforts appear as partial and incomplete responses, particularly in terms of targeting youth from lower income sectors of society. Some programmes (e.g. the School-to-Work Opportunities Act in the USA) are successful in attracting students to particular occupations or occupational clusters, but are considerably less successful in reaching employers and thus in securing work for programme participants. Other programmes (e.g. school-to-work transition programmes in the United Kingdom), although successful in terms of post-training job placement, have not been able to target low-income youth. Still other programmes (e.g. active labour market policies in OECD countries and Eastern Europe) prove more successful in targeting adults than youth.

The programme also appeared to have a positive impact on participating firms. On the firm side, the OTEs were successful in surveying demand from all angles, thus creating a broad-based market for training. Micro-, small and medium enterprises represented the bulk of this demand.

The programme sought and received participation from enterprises of all sizes. Notably, however, the participation of large enterprises (200+ people) paled in comparison to that of the micro- (1-9 people), small (10-49 people) and medium (50-200 people) firms: 81.5 per cent of all enterprises participating in the programme were micro- (26.7 per cent), small (32.0 per cent) or medium (22.8 per cent; Paredes et al., 1996:8). On the whole, the overwhelming majority of these participants were satisfied with and benefited from the programme: when surveyed 90.9 per cent indicated that they would be prepared to receive programme participants in the future (Ibid., 13).

Institutional changes occurred as well. INACAP (Instituto Profesional y Centro de Formaciica, ex-Instituto Nacional de Capacitacirofesional) successfully made the transition from a supply- to a demand-oriented approach to training. The Institute, stripped of its budget within the first few years of the programme, sold its courses to enterprises that received government subsidies to buy training from any chosen provider. It (INACAP) has been operating without public subsidies for a number of years, operating within the framework of competition initiated by the programme (de Moura Castro, 1998:7). The nation's training system underwent a transition in much the same way as INACAP. Of the 312 training organizations associated with the programme, approximately 60 per cent (187) were created after the project (Ministerio de Trabajo y Previsiocial, Unidad Coordinadora del Programmea, n/d, 10).

These successes, in part, accounted for the government's decision to launch a second phase of the programme after the termination of the IDB loan, with its own resources. The approach used to deliver training services in the project has been replicated in subsequent projects (e.g., in Argentina, discussed below; but also in Peru and Venezuela). Yet doubts remain concerning the project's success on other fronts.

2.1.3 Good targeting but not-so-good training

Given the underlying rationale of Chile Joven and its location within the context of the structural transformation of the nation's economy, the programme placed comparatively little emphasis on generating the quality inputs required to effectively deliver training - e.g. books, materials, institutional knowledge and experience8. Such inputs, part and parcel of the training delivered in the established training institutes (e.g. the 'S & Is'), were found to be lacking in Chile Joven. In creating a competitive market for training services, project administration and implementation remained overwhelmingly concentrated in the creation of a market for training services. Although SENCE approved each course prior to implementation, the project neither focused on the quality of training per se, nor provided any incentives for the OTEs to do so. As a result, the quality of inputs - particularly materials - suffered.

8 The programme includes provision for the expansion and improvement of teaching equipment. Notably, however, rationales underpinning such provision have more to do with market creation than with the quality of training, per se. The programme "encourages leasing companies to finance the teaching equipment by means of an advance payment to facilitate the [participating] training agencies' eligibility for credit."

Other problems associated with the quality of training relate to the menu of courses actually offered. Chile Joven (like Proyecto Joven, discussed below) provided incentives for OTEs to survey the country in search of the demand for semi-skilled labour. In effect, hundreds of OTEs canvassed the country looking for thousands of internships in thousands of enterprises without limitations on either subject matter or content. In the end, however, the menu of courses offered remained quite standard and traditional: 37.1 per cent in industrial arts; 31.3 per cent in commerce; 27.3 per cent in technical areas; 8.5 per cent in agriculture and forestry; and 1.3 per cent in maritime (Paredes et al., 1996:6). In fact, there was little difference between occupations in which programme participants found jobs and those in which the control group were employed; and, in some of the traditional sectors (agriculture, forestry and hunting; industry and manufacturing; electricity, gas and water), a higher percentage of programme participants were employed.

2.2 Proyecto Joven in Argentina9

9 This section draws heavily from de Moura Castro, 1997.

Proyecto Joven is an Argentinian variant of Chile Joven. Initiated in 1994 with support from the IDB and continuing through the present, the project replicates its Chilean counterpart in using training as a means to increase the employability of youth, particularly those from lower-income strata. By training these youth, the programme attempts to increase their productivity and to instil in them appropriate values and attitudes - skills and values which, in turn, are thought to improve their chances of getting and maintaining a job.

2.2.1 The 'nuts and bolts' of Proyecto Joven

Proyecto Joven mirrors Chile Joven in most respects. Framed within the context of structural adjustment and gradual economic revitalization, the programme provides an intermediate-response structure to address the growing masses of unemployed youth, about 30 per cent - or as many as 600,000 people - of whom were neither in school nor working (de Moura Castro, 1997:1); see Table 110. Targeting 170,000 of these youth, this programme, conceived and implemented along the lines of the 'chequebook model' (described above), provides funds to the Ministry of Labour to contract training with any credible institution, public or private. As in the Chilean project, bidders must present plans for classroom instruction as well as ironclad promises from enterprises that, upon completion of classroom work, internships will be provided for trainees11. The substantiated demand for labour - measured through the proxies of commitments to provide internships - thus remains the sine qua non criterion in awarding training funds to the training providers (the OTE equivalent).

10 This figure is based on provisional data gathered by the IDB. It refers to people under 30 who had not completed high school, came from low-income households, and were either under- or unemployed.

11 Classroom instruction generally lasts from 150 to 250 hours; internships are of equal duration. As in Chile Joven, firms receive Proyecto Joven interns free of charge. During the period of classroom instruction, the programme provides a fellowship of US$4/day; during the internship, this fellowship is increased to US$8/day. Women receive a bonus if they have children.

It is worth reiterating the advantages of this system. It effectively vaccinates against the 'supply-driven disease'. Rather than automatically granting public institutions with fixed budgets and open mandates to train - as is the case with conventional training - the system rewards only those institutions that provide some type of guarantee (e.g. internships) of the market's real demand for training. The simple rule of 'no demand, no training' is strictly applied. Providers have a strong incentive to cultivate links with the productive sector and, thereby, prepare the ground for internships. A healthy system of checks and balances - and incentives - thus is generated.

It is these systems, not the public/private dichotomy, which lie at the heart of a good versus a bad response to the market. When prizes go to those able to find the market niches and the others remain out of the sources of funds, behaviour tends to be considerably different. As experiences in both Chile and Argentina illustrate, even public institutions, such as the technical schools and higher education institutions which otherwise have been lukewarm or deplorable in delivering regular, supply-side training programmes12, switch gears and respond to the market if the incentives are right.

12 The Estado de EjecuciI> indicates that the post-secondary programmes and the public universities are the technically weakest institutions.

Given the close resemblance between the two 'Jovens', successes seen in Chile have been largely replicated in Argentina. Proyecto Joven, like Chile Joven, is well targeted: 83 per cent of participants are unemployed and 6 per cent are out of the labour market. The overwhelming majority are poor (80 per cent belong to low-income families) and, whereas most have completed primary education (92 per cent), very few (7 per cent) have finished secondary education (Ibid. 3). The programme also has been socially profitable. Based on data compiled by the Argentinian Government from a sample of 1,600 graduates (men and women) from the second and third competitions, 51.5 per cent were employed 11 months post training; the proportion returning to schools increased from 7.9 per cent to 20.8 per cent during the same period (Ministerio de Trabajo y Securidad Social, 1997)13.

13 Notice that the control groups were sufficiently well constructed so as to be quite similar to the experimental groups. Other experiments with earlier groups of trainees yielded similar results, confirming the robust impact of the programme.

Within this context, however, the gender differences of Proyecto Joven have been more drastic than those of Chile Joven. Men participating in the programme (Proyecto Joven) increased their employment rates from 43.7 per cent to 61.3 per cent over the 11-month interval between the training and the survey; these figures compare favourably to rates of 51.0 per cent and 59.9 per cent, respectively, for the control group. Similar rates for women have been less than convincing: whereas employment in the experimental group goes up from 35.4 per cent to 38.6 per cent, the control group increases from 35.3 per cent to 41.5 per cent (Ibid.). Thus, not only is the increase in employment small in absolute terms for women participants, but this increase is smaller than for the control group - figures which clearly suggest the programme has been ineffective, or at best much less effective, in promoting employability for women.

The programme-employment relation implied by these data does not tell the whole story. Indeed, one could question the overall effectiveness - and cost-effectiveness - of the programme for all participants. Training costs more than general education. On the average, Proyecto Joven invests US$1,400 per student. This amounts to US$4.36-4.98 per student/hour14. If administrative costs in personnel and other expenditures are factored in, costs easily climb to US$2,000. The costs of the 200-odd hours plus the two or three months of internship for semi-skilled training thus are substantial, costing six times more than primary education or twice as much as one school year with over 600 hours of class at the Universidad Tecnola Nacional. Based on these figures, why train? If rates of employment for the control group are comparable to those of an experimental group, then leaving untouched the prevailing forces of supply and demand and allowing them to 'naturally' ingrate youth into the labour market may constitute a sounder policy response.

14 Regardless of how well justified, the high costs of Proyecto Joven can be questioned. The per-hour cost of the Programme is comparatively high, more than doubling the per-hour cost of PLANFOR (estimated at US$2.13/hour, discussed ahead) and almost doubling that of Chile Joven (estimated at US$2.91/hour, discussed above). De Moura Castro (1997) finds that, with the exception of the Greater Buenos Aires Metropolitan area, enrolments are far too small to benefit from economies of scale; courses average 20 students. He also suggests there may be lack of knowledge on the part of the project staff of the real costs of offering training under different circumstances. There seems to be a low variance in costs between occupations. The most expensive course (air conditioning) costs $1,719 compared to $1,126 for supermarket clerks. This homogeneity suggests that in addition to the lack of economies of scale, there are informal cost 'norms' that providers follow in presenting their proposals.

Yet, as has been argued above, training can be justified even in the absence of employment: training increases productivity, which increases growth, which increases employment. This remains true even if training does not immediately lead to employment. Training imparts and/or strengthens a set of basic, durable skills. It is these skills that, in the long run, contribute to the value added of training, even in instances where employment rates are less than spectacular.

2.2.2 Improvised trainers and aggressive brokers

Just as the successes of Chile Joven and Proyecto Joven are similar, so too are their weaknesses. Quality problems also plague Proyecto Joven. Issues of planning and development receive insufficient attention. Serious conventional training systems develop their courses progressively and, by trial and error, improve them. Most offerings in the classical trades have long histories of items added and subtracted from the curricula, and of teaching materials and techniques adapted and discarded as new and better ones are found. PLANFOR (mentioned ahead) is instructive in this manner. Yet Proyecto Joven (like Chile Joven, albeit to a lesser extent) deals with each course as if it had never been offered in the past. Each course starts from scratch, that is, from the identification of demand, to the description of the tasks required for the job and the writing of the syllabus. Conventional courses thus are prepared as niche courses: that is, as new or little developed occupations.

Only the niche courses justify being developed from scratch. Conventional courses are better recognized and treated as such: machinists are machinists anywhere in the world. Indeed, 'tailor-made' courses were supposed to be the raison d'e of Proyecto Joven, but 'tailoring' can and should be a simple process of adding or subtracting modules from a standard course. This would not dilute the demand-oriented approach of the programme, as the selling of INACAP courses under Chile Joven clearly illustrates. Needless to say, reinventing one century of training is not a good idea.

This situation breeds other disadvantages. Over the course of the programme, the market for training has been all but taken over by individual consultants. By the sixth round of bidding, these individuals accounted for 56 per cent of all contracts awarded; training firms reduced their presence from 26 per cent during the first round to a mere 8 per cent by the sixth (Jacinto, 1996:19-20). These individuals, most of whom worked under the auspices of a training firm in earlier bids, are competent brokers able to sell courses to enterprises, hire whomever they find to teach the courses and rent the space needed to carry out the training. Much wasted effort occurs in this massive effort of micro-identification of demand. It neither builds up anything permanent in terms of institutions nor represents a systematic - let alone comprehensive - approach to engage employers, as do the sectoral chambers of employers epitomized by the German experience. The nation's training system thus is left without institutional bearings. Training becomes an initiative of (an often inexperienced but aggressive) few; quality suffers. Field visits by one of the authors revealed considerable weaknesses in the dozen or so programmes observed (unprepared instructors displaying poor craftsmanship, a lack of written materials and limited efforts to integrate basic skills into curricula).

2.2.3 Reinventing training under a collapsing training system

As may be deducted from the above, Proyecto Joven is playing a role different than the one for which it was originally created. The programme was created during a period in which the old technical school system (CONET) was in a state of deterioration - not in all schools, but in the vast majority. Such deterioration, difficult to describe statistically but easily observable to those familiar with the system, left many schools without the necessary inputs for offering serious vocational preparation: equipment had become outdated or non-functioning; instructors lost their edge or quit; and teaching materials and experience suffered. A new model for technical education (the polimodales, under which many occupations traditionally offered in secondary-level technical schools are pushed up to the tertiary level) was under execution at the time Proyecto Joven was conceived. Yet this new model shied away from preparation in the classic trades, particularly in the industrial arts, offering instead a small number of tracks that give the 'flavor' of industrial arts. Although in recent years the Ministry of Education has tried to counteract this tendency, the cumulative impact of decades of neglect is easy to notice.

Proyecto Joven, when implemented, thus became, and remains, a de facto substitute for the nation's training system. This can be seen as a mutation or even a distortion of the original goals - which would be immaterial if the result was quality training. Yet, whereas Proyecto Joven is well suited to a light, ad hoc set of training courses, it cannot replace the fully-fledged training system that one would otherwise expect to find - and did at one time find - in Argentina.

For one, many occupations (e.g. the classical trades) have been forgotten in the new system of polimodales. Many such occupations require considerable dexterity, motor co-ordination and have relatively long training periods; many are too complex to be learned on the job. In addition, their conceptual and symbolic contents, while not trivial, do not require a post-secondary degree (e.g. welders, machinists, turners, cabinetmakers, and electricians). For these occupations, Argentina currently does not have much to offer. The country has not rebuilt a significant training system parallel to and independent from academic schools; the demise of the technical schools has yet to be followed by the creation of a system to prepare workers for the skilled manual occupations.

For another, the programme provides training through small and ephemeral organizations. No organizational learning can take place in such organizations. The ICAPs have neither the time horizon nor the capital to invest in the training of trainers, production of high-quality training materials or innovative instructional methods. Given the decadence of the technical schools, the country remains without a real clearing house for this collective learning - it has no curator for what was and continues to be learned on the art and science of training. The quality of training thus is substandard because good training materials either are perfected throughout the years or require heavy financial outlays to be prepared. Since there is neither the expectation of continuity nor the funds or incentives to develop new materials, most courses - and instructors - are improvised; the equipment, by extension, is often inadequate for the task. As a result, the wrong practices may be taught and experience does not accumulate.

2.3 PLANFOR in Brazil

In contrast to Argentina, Brazil's experience with 'S' institutions runs long and deep. SENAI has been in operation since the early 1940s, catering to the industrial trades and working closely with industry (see de Moura Castro, n/d). Some of its courses have been polished or redesigned again and again for more than a half a century. SENAC, from the early 1950s, has been doing likewise for the service sector. Newer institutions (SENAR, SEBRAE and SENAT) have catered to the rural, small enterprise and transportation sectors, with similar orientations.

While there is occasional criticism levied against the 'S' institutions, by and large, they have done a credible job and are strongly defended by the employers' associations which 'own' them. Overall, they have responded to the needs of those who pay the 1 per cent payroll levy: that is, to the firms in the formal and modern sector.

The real problem with these institutions is not in what they do wrong, but in how they target their services. The demand-driven orientation of the 'S' system emanates from their employer-managers who, in turn, target their services to their formal and modern-sector constituencies. This is understandable: he who pays the piper calls the tune. The system's financing structure provides few - if any - incentives for employer-managers to target workers outside their constituencies. The fact that the huge informal sector has been left out of the picture thus has not happened by chance, but rather emerges as a telling illustration of the strength of interests vested in the system which target the formal market and select the most suitable trainees.

Nor is this situation likely to change any time soon. Insofar as the 'S' institutions are run essentially as arms of private enterprises, there is little that the government can do to change clienteles. Although boards and other mechanisms exist to coordinate the action of the 'S' institutions with government policies, the 'Ss' politely nod to the government and go their own ways. Indeed, in going their own ways, the 'S' system has produced notable results: their demand-driven approach has endured and ensured, decade after decade, a very respectable performance.

In creating PLANFOR in 1996, the Brazilian Ministry of Labour saw an opportunity to use the installed capacity and experience of the 'S' system, as well as its own experience with PIPMO15, to implement a Brazilian variant of a training programme targeted towards youth, the unemployed and the dispossessed. PLANFOR seeks to improve the employability of this target population, estimated at 40 million in 1996 (IDB, 1997) - a figure that, although in relative terms pales in comparison to masses found in either Chile or Argentina (see Table 1), illustrates the magnitude of the programme. In contrast to the targeted approach to available jobs in the formal sector found in the two 'Jovens', PLANFOR targets, first and foremost, the social imperative of training marginalized youth. The programme is predicated on a demand-driven philosophy but, as will be discussed ahead, gives comparatively less attention to finding and ensuring post-training employment for this clientele16.

15 Under PIPMO, operated during the 1970s, the Ministry of Labour mainly contracted short courses for simple skills from SENAI.

16 Notice, however, that PLANFOR is a very large and broad programme, with several different subprogrammes working under different rules. For instance, some of these subprogrammes target new industries in need of a new generation of trained workers. Therefore, any generalization of the overall PLANFOR effort would be inappropriate and meaningless. This paper only examines the subprogrammes inside PLANFOR that operate on grounds similar to the two 'Jovens'.

2.3.1 The 'nuts and bolts' of PLANFOR

PLANFOR is financed through earnings from a US$20 billion unemployment fund (Fundo de Amparo ao Trabalhador, FAT). Of this amount, an estimated US$300-330 million annually is allocated to training around 1.3 million workers (IDB, 1997) across the country. As an example of the massiveness of this effort, during its first year of operation the programme trained close to 1.2 million workers in 2,614 municipalities. Consistent with the basic premises of the chequebook approach to training, these funds are used exclusively for the purchase of services; they are not used for direct investment. PLANFOR thus adopts the basic principle of outsourcing training activities also used in the two 'Jovens' to a system which contracts from institutions with a long-standing and solid tradition in training. The states, in bidding for resources, present a programme to the (federal) Ministry of Labour detailing the training they intend to offer. Upon receipt of funds, state-sponsored competitions are held to select training providers.

Most similarity between PLANFOR and the 'Jovens' stops here. PLANFOR chooses to train unemployed youth from low-income sectors of society; it is less concerned with the concrete existence of jobs or with the robust mechanism of the Chilean and Argentinian projects to identify jobs. The demand-driven rule ('no demand, no training') of the "Jovens" thus is diluted. Empirical data illustrate these differences. About half (52 per cent) of PLANFOR participants are not employed (unemployed or never have worked; see Ministerio do Trabalho, 1997). If the purpose of the programme was to offer a chance to the unemployed to get a job as a result of the training, the targeting would have been disappointing. Yet the stated goals of the programme are broader, focusing more generally on training and on marginalized youth.

One may disagree with this orientation of PLANFOR, but one cannot ignore what it is trying to do. The programme attempts to offer useful skills both for those with regular jobs in the modern sector and those who are working in the informal sector. The content of this training responds to these groups. In contrast to the Chilean and Argentinian programmes, basic skills and well-developed materials figure prominently in the Brazilian case, forming the core around which most training provided under PLANFOR is delivered (Rios-Neto and Camilo de Oliveira, 1998; Miranda-Ribeiro, 1997). As will be discussed ahead, it is through these and other differences that PLANFOR has been able to deliver training of a quality unmatched in either Chile Joven or Proyecto Joven. Yet, on the flip side, leakage under the PLANFOR system has been unavoidable; its targeting mechanisms are less sophisticated - and thus less reliable - than those of the 'Jovens.'

PLANFOR runs parallel to a US $2 billion set of training institutions (the 'Ss') which graduate around three million people each year. The programme is not an attempt to establish a new training infrastructure: the 'S' system, as detailed above, remains intact and continues to deliver quality training. Nor is it an attempt to steer the 'Ss' away from its traditional students and towards a new clientele or target population that lacks cohesion and voice. Rather, PLANFOR builds on this infrastructure and adds to that training already provided through the 'Ss'. In doing so, it is able to keep training costs low: the average per hour cost is estimated at US$2.13 - far less than the costs found in either of the 'Jovens'17. It is also able to target clienteles left out of traditional (e.g. 'S') structures. In this respect, the programme has been quite successful.

17 This is the countrywide average; costs vary within the country. In Minas Gerais, for example, the per-hour cost is estimated at US$ 1.68. See Rios-Neto and Camilo de Oliveira, 1998:2.

Initial data compiled by the Ministerio do Trabalho (1997) confirm the participation of previously marginalized social groups and sectors. Whereas 21 per cent of the Brazilian population lives in rural areas, 25 per cent of programme participants come from these areas. The empirical data presented below further suggest that the programme, as implemented in the states, clearly targets rural settlements (a sore issue in the country). This is quite an achievement, considering the urban bias of most social programmes as well as of the 'Ss.' PLANFOR has also been successful in attracting women: 49 per cent of programme participants are women - a figure that exceeds their overall participation in the labour force (40 per cent). In some regions (e.g. the Southeast and Centrewest), more than 50 per cent of programme participants are women. When race is considered, the PLANFOR is virtually colorblind. Blacks are over-represented and 'non-whites' (mixed white, black and indigenous) are slightly under-represented. This is a curious yet positive result: blacks usually fall towards the lowest end of the scale.

Of special note is the relationship between PLANFOR and the informal sector. As alluded to above, slightly less than half of the participants (48 per cent) are employed. Of these, about half come from the informal sector. Yet, given the fact that survey data focus exclusively on employment in the formal sector - not only thus failing to capture informal-sector employment but (mis)representing such workers as unemployed - it is extremely likely that remaining PLANFOR participants (officially considered to be unemployed) are indeed employed in the informal sector. In this respect, PLANFOR takes some strides forward in addressing the needs of a sector largely left out of the 'S' system. As the data suggest, however, the programme neither discriminates against nor privileges the informal sector.

2.3.2 Good training

While general evaluations of PLANFOR are not available, data collected from its implementation in the states of Minas Gerais and Pernambuco provide some indication of programme impact. These results should be interpreted cautiously. PLANFOR has a multiplicity of programmes covering a wide range of occupations. The decentralized nature of its execution makes it far more heterogeneous than, for example, Proyecto Joven, where the national Ministry of Labour directly contracts courses and, thereby, bypasses the local secretaries of labour. PLANFOR programmes are executed by institutions with different levels of technical and managerial competence and in states that are more or less equipped to deal with such programmes. Any generalization of results necessarily blurs - if not outright erases - these differences. Some programmes are known to be creative and well run, while others are helplessly flawed.

Consistent with the national programme, the PLANFOR programmes implemented by the states target low-income sectors of society with low levels of education, particularly youth and women. During its first year of implementation (1996), approximately 70,200 people were trained in Minas Gerais - a figure that, given changes in the implementation plan at the municipal level, fell far short of projections (140,646). In Pernambuco (1997) almost 100,000 participants in 123 municipalities - 3 per cent of the working population - were trained.

In both cases, the programme appears to be having some success, particularly in the Interior of the state. In an analysis of programme impact, Rios-Neto and Camilo de Oliveira (1998) find a statistically significant and positive impact of the programme on the employment rates and wages of men in the Interior of Minas Gerais. The programme also appears to produce a similar impact on the rates of economic activity (men and women) outside the Greater Metropolitan Area of Belo Horizonte. Rios-Neto and Camilo de Oliveira further find a statistically significant, albeit positive, impact of the programme in Minas Gerais on unemployment for women in the Interior. Results from survey data compiled in Pernambuco (Barros et al., n/d) are similar18. Most of those interviewed indicated that their occupational situation had improved. Yet, in general, the impact was stronger for men; mid-aged participants benefited more than their younger (i.e. those aged 10-13) and older (e.g. those with significant work experience) counterparts.

18 Of the 37 training providers in the state, participants were interviewed in 15. These 15 providers were chosen because they offer the most comprehensive programmes. Within each provider, the sample was based on a non-stratified random choice. These samples generated 820 interviews. They were added to 407 interviews from a control group paired by geographical proximity of the residence, with added criteria to match socio-demographic variables.

These results are notable for several reasons. First, the programme appears to be producing a positive impact on men outside the Greater Metropolitan Area of Belo Horizonte. This is consistent with the comparatively high rate of participation from rural areas observed in the more general programme data (discussed above). Such findings suggest that PLANFOR is obtaining some success in attracting and integrating a new clientele - i.e. one that has been left out of traditional structures. Indeed, as noted above, a general criticism launched against the 'Ss', as other semi-public and public training institutions, has been that they tend to benefit urban males from comparatively high socio-economic strata. Second, despite the fact the programme has been successful in attracting women, the results from Minas Gerais and Pernambuco provide additional evidence of the type of gender biasing found in the Chilean and Argentinian cases. In general, men derive more benefits from these types of programmes than do women.

Other factors emerging from Minas Gerais and Pernambuco call attention to the quality of training. Of these, the duration of training and the institution through which it is provided merit close attention. It is generally assumed that the longer a training course is in duration, the greater the impact of training will be. The courses offered through PLANFOR, depending on the skills taught, vary in duration. Some are as short as 50 hours - and appropriately so. Training in some aspects of, for example, packing and packaging, sales clerks, and maintenance do not require long periods of instruction; shorter courses can adequately and effectively teach what skills need to be taught. Such courses can, and do, have a positive impact on wages. In the case of Minas Gerais, Rios-Neto and Camilo de Oliveira find that courses with only 50 hours of instruction - about a quarter of that delivered in either 'Joven' project - increase wages by approximately R$64.

Data for Pernambuco paint a somewhat different, perhaps more realistic, picture. Data obtained from regression (probit and logit) analyses indicate that those who take the training courses do not increase their chances of getting a job (see Barros et al., n/d). In fact, their chances fall, although the difference is not statistically significant. Nor does training appear to bring any clear financial benefits to participants19. Financial gains, of course, are not the only benefits of training; nor are such gains a true proxy for long-run results20.

19 The survey tool included data on income (of those who were in the labour market). Although Barros et al. found some positive impact of the programme on earnings, such data were manipulated under assumptions that the authors of this present paper find particularly far-fetched.

20 Barros et al. also try to estimate the impact of the courses on municipal income. However, the authors are particularly sceptical of the methods used and do not think this is a worthwhile line of inquiry.

What the Pernambuco case does find is that, of those working after completing PLANFOR training, the vast majority indicate that they feel more secure of their skills after the course - a proportion that ranges between 98 per cent for SENAI graduates and 66 per cent for graduates from other providers. This finding is significant for two reasons. For one, it calls further attention to the long-term payoffs of training. In the absence of immediate employment prospects, training, particularly training of good quality (see ahead), increases the durability of core basic skills - that is, of skills with shelf lives that extend far beyond the specific tasks learned. Secondly, this finding evidences the limitations of survey data alluded to above. The fact that more people report benefits from training than report being employed suggests that unemployment has been improperly measured: those who report being unemployed and benefiting from training, more than likely, are working in the informal sector.

The results outlined above are consistent with our expectations. The absence of financial gains is a perfectly natural outcome of such training courses. Indeed, it would be surprising to find significant increases in income as a result of courses, some of which are as short as 50 hours, that enrol on the basis of first-come-first-served and are poorly targeted to the demand for labour (discussed ahead).

In much the same vein, the strengths of PLANFOR are consistent with expectations. The impact of the programme stems, in part, from the fact that training is offered by institutions operating in a training-rich country. These institutions, among which the 'Ss' figure prominently21, have long-established traditions and infrastructure for providing quality training. The quality of the training provided through PLANFOR thus appears to be of good quality. Focus group data from Minas Gerais (see Miranda-Ribeiro, 1997) indicate that, in general, instructors are well prepared and well versed in the art and science of their occupation. Instructors routinely bring their experience to bear on their teaching, using concrete and personal examples to illustrate specific issues related to training. Quality materials and equipment support classroom and practical exercises. When asked, programme participants often mention the importance of supporting materials and equipment in their learning process: books, workbooks and reference materials tend to be 'user friendly' and of 'great utility'; the equipment, in turn, is said to be 'sophisticated' and 'fundamental' to the training provided22. Basic skills (including reading, writing and arithmetic), as noted above, are fully integrated into training curricula, as are lectures on labour laws and worker responsibilities, workplace security, environmental considerations, salary scales and strategies for finding a job (see Miranda-Ribeiro, 1997:11-16). In the classroom, theory serves as a basis for practice, introduced and applied in reference to practical exercises. Given the short duration of the courses and (in some cases) space and resource limitations, however, more time is often dedicated to theory than to practice.

21 Data from Pernambuco indicate that SENAI had the highest proportion of graduates who benefited from the programme, compared to other providers (D. Bosco was also an outstanding performer, not surprising, considering its performance elsewhere in Latin America). Examples of 'S' institutions include: SENAI/Centro Automotivo in Belo Horizonte, SENAI/Cetel in Belo Horizonte, SENAR in SJoEvangelista (see Miranda-Ribeiro, 1997).

22 It should be noted that some courses (e.g. in IDET/Belo Horizonte; IET/Neves) lack didactic materials and proper equipment. Yet such shortages do not appear to be as widespread as in Argentina and Chile.

2.3.3 Good training but not-so-good targeting

PLANFOR, like the two 'Jovens', targets the less affluent members of the labour force. In fact, this is it main raison d'e. Yet data comparing its clientele to a national sample of the population indicate that it is only partly achieving this goal. Perhaps most noteworthy in this regard is the fact that two-thirds of programme participants have completed primary education - a level which only one-third of the Brazilian working population has achieved; 10 per cent have completed the secondary level or higher23.

23 This comparatively high level of education can be seen as a partial explanation for why participants in the PLANFOR programme in Pernambuco display a higher level of 'citizenship' than non-participants. Barros et al. (n/d) include an index of citizenship in their survey questionnaire. They apply this calculated index (based on participation in voluntary associations and unions, and political citizenship) to the experimental and control samples. The results thus obtained are clear cut and statistically significant. Those who participated in the training scored much higher than those who did not. Since citizenship constitutes an explicit goal of the programme, the index provides an eloquent demonstration of changes in attitudes resulting from training. (It is important to note, however, that this is an indicator of changes in attitudes, not of changes in behaviour.)

PLANFOR participants obviously are not average Brazilian workers, nor are they a clientele in special need of social programmes. Although the programme has had considerable success in integrating previously excluded groups (e.g. women, informal-sector workers, non-whites), such integration appears to have come at the cost of considerable leakage: its participants, as individuals, do not appear to be the most socially or economically deprived. For reasons of access, information, screening or whatever else may influence enrolment, PLANFOR is biased against the less educated. Indeed, based on the data presented above, PLANFOR is a more elitist programme than SENAI programmes targeted to low-income participants. The education profile of its (PLANFOR) clientele is about the same as that of the SPaulo SENAI, one of the states where SENAI recruits youth with the highest levels of schooling; the SENAI clientele is considered a 'blue collar elite'24.

24 By contrast, PLANFOR is a more elitist programme when compared to SENAI programmes targeted to low-income participants.

The upward bias of PLANFOR participants in terms of education provides a telling example of the classical trade-offs faced by such programmes. The Brazilian market discriminates against candidates with low levels of schooling. By targeting those with the levels of education demanded by the market, PLANFOR ensures a minimum level of employment of its graduates. However, in doing so, the programme discriminates against those most in need of training.

Targeting mechanisms applied in PLANFOR thus can be called into question. As alluded to above, training under PLANFOR operates in a decentralized manner. Responsibilities for service delivery fall to the State Secretaries of Labour (state-level institutions mirroring the Ministry of Labour). In principle, decentralization improves targeting: the states are "closer" to the target populations and thus are better positioned than the federal government to ensure that those courses receiving competitive resources respond to the local needs. Indeed, the administrative decentralization found in the two 'Joven' programmes has been justified on similar grounds and, as discussed above, the system of check-and-balances created through such decentralization has produced a tighter match between the demand for and supply of training.

This has not been the case in Brazil. Decentralization takes place only from the federal to the state level (Brazilian states are often several times larger than Chile - as illustrated by the sheer magnitude of PLANFOR's target population). It does not appear as a delegation of the process of identifying demand to the training providers as in the two 'Joven' programmes. As a result, no system of checks-and-balances emerges and PLANFOR's ability to fine-tune its training has been less than effective. Decentralizing training to the states still leaves the programmes in the hands of highly centralized bureaucracies, the majority of which tend to be poorly equipped and capacitated in technical terms and heavily contaminated by politics. Problems of identifying clienteles - the eternal curse of training systems - thus remain.

Data compiled from PLANFOR in Minas Gerais and Pernambuco provide evidence of poor targeting - the number one theme of this paper. In addition to the leakage in targeting its intended clientele, in some cases, training too appears to miss the mark. For example, courses in agricultural techniques are offered in Divinis (Minas Gerais), a non-agricultural area (Miranda-Ribeiro, 1997:4). In Pernambuco, although about half of all participants remained in the same job or activity after the programme, an estimated 33 per cent of interviewees said they could not use what they learned - a high and worrisome proportion. Twenty-five per cent indicated that they took courses in activities for which there was no demand in the labour market. In what targeting does exist, leakage is unavoidable. Insofar as SINE, the national employment service through its local representations, often maintains insufficient information about course offerings and content (Ibid., 24-25), any match between the training and demand is likely to be loose, at best.

These results confirm the hypothesis the authors had developed before such data became available. Brazil has a sound tradition of vocational training. Many institutions have accumulated decades of experience in an environment where training has thrived and continues to thrive. It thus is not surprising that students like the courses and find them useful. Nor is it surprising that PLANFOR improves the occupational performance of its participants and increases their self-confidence. The fact that the programme increases neither the income nor the employability of the participants is a disappointing result, but one that could - and should - have been expected due to the absence of a robust targeting mechanism.