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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?

Introduction

This paper explores training programmes targeted to disadvantaged youth in Latin America. Examples are drawn from Chile Joven, Proyecto Joven (Argentina) and PLANFOR, the National Plan of Professional Education in Brazil. The idea of these programmes is politically appealing and some have been successful. Relatively reliable data show that youth find jobs in those occupations sufficiently close to those for which they have been trained. Such success is particularly noteworthy in that the record for similar experiences implemented around the globe has been mediocre.

This paper compares the projects in terms of the quality of training provided and the targeting mechanisms used; a larger theoretical context within which these projects can be located is also presented. Thus compared and understood, some interesting results emerge: the two 'Joven' projects are strong on targeting but turn out to be weak on the quality of the training courses they provide. PLANFOR courses, by contrast, tend to be of good quality but poorly targeted. Thus, risking an exaggeration to illustrate the point, whereas Chile and Argentina offer well-targeted training of relatively poor quality, Brazil offers good training with weak targeting mechanisms. Each system could learn from the other.

1. On the elusive art of training

Training has long occupied a central position on the agendas of governments everywhere. Like most other public policies, it has undergone considerable shifts, responding to different economic conditions and serving different political constituencies. Traditionally, governments promoted and financed training as a means to increase productivity and to create a workforce capable of absorbing more complex and sophisticated technologies. This was the main justification for training during the post-Second World War economic boom, although economists often put forth the argument of economic returns to training in the form of higher incomes for those receiving training - which, although not the same thing, was compatible.

By the 1970s, circumstances had changed. As economic recession set in around the globe, training was asked to do something else - to create employment. The policy justification was eloquent and simple. The more training people had, the higher their employment level would be. Rather than responding to the supply of jobs, training was seen as a means for stimulating labour demand, particularly for marginal populations.

Regardless of approach or ethical considerations taken, training has proven to be a good investment only if those trained find a job utilizing their newly obtained skills or are already in a position where these skills can be used. Indeed, this is the bottom line of and for training. Training otherwise is a bad investment: it is more expensive than regular education and, if the skills learned are not utilized, there is no point in spending the money. It is better to provide more education. Therefore, obtaining a good match between the demand for and the supply of training thus becomes and remains the sine qua non justification for its provision.

1.1 From training for jobs to training without jobs

From the perspective of public policy, training essentially arrived on the coat-tails of the post-Second World War economic expansion. The explosive growth in training during this period coincided with fast economic growth and severe bottlenecks in skills; overcoming these shortages provided the obvious justification for national training policies. As the rapid expansion of industrial and manufacturing sectors outpaced the capacity of on-the-job training efforts - dominant at the time - to prepare skilled labour in a timely manner, nations around the globe responded by creating publicly operated and financed training institutes. Latin America was no exception. Indeed, the region's national training institutes - referred to here as the 'S & Is' (they are called, for example, SENAI, SENA, SENAC, SENAT, SENA, SENATI, and INA, INCE, INFOTEC, INACAP) - can trace their origins these past periods of economic expansion. All shared a common approach and vision. It was the supply of training that mattered; and the more, the better (see de Moura Castro, 1995).

Training followed a straightforward sequence: train instructors, translate; adapt and prepare training materials; build centres and purchase equipment at the fastest possible pace. In most cases, this model proved viable and self-sustaining. Structures for financing, delivery and political autonomy were built into the system. A payroll levy provided financial stability, comfortable budgets and a long-run perspective. The so-called 'methodical series' supplied a practical, fail-proof and effective means of delivery. The independence from academic schools and from the Ministry of Education (in most cases) liberated vocational training from the academic schools' middle-class ethos and prejudice against manual occupations. Furthermore, these institutions were often quite close to the enterprises, thus ensuring the general direction of training provided was in line with the needs of industry.

For several decades these systems enjoyed a good reputation and adequately trained several generations of highly skilled workers. They were, overall, significantly better than the regular schools in their countries. Some were outstanding institutions. They trained workers who allowed the modern sectors to develop and fostered the process of import substitution. Despite the criticisms launched against them, most were respected islands of serious learning, in contrast to the overall mediocrity of the academic schools.

Yet, as economies across the region began to stagnate, the 'S & Is' - as most supply-siders - lost their dynamism. The oil crises, the economic disturbances that followed and the labour-saving nature of industrialization slowed growth in employment in the modern sector and led to the rise of the informal sector and self-employment. The 'S & Is' thus lost their edge, and began graduating students who did not find a clear and active labour market in the industrial sectors. Many experimented with training for the informal sector - experiments that were often broader-based than elsewhere in the world (Ducci, 1990) - but few (e.g., INA and its Talleres Populares) were actually able to make this transition. On the whole, most of these experiments remained as such, small initiatives that were never replicated on a larger scale.

As the market for modern industrial occupations lost its impetus, the 'S & Is' failed to adapt accordingly. Rather than catering to new markets with a more active demand, they remained stuck in their original supply-side priorities as if nothing had happened. As a result, both their prestige and reputation eroded and they became far more vulnerable to pressures from the outside. Budgets were poached, if not raided outright, and activities were redirected away from training per se and towards more socially productive or politically expedient activities. No institution was immune. Neither SENA (Colombia) nor INA (Costa Rica) - the most prestigious institutions in Spanish-speaking Latin America - escaped; SENA budgets were subjected to central controls and similar constraints were imposed on INA. The Peruvian SENATI, in much the same vein, lost half of its budget, which fell from 1.5 to 0.75 per cent of payroll.

1.2 If training institutions do not change, buy training on the market

The 'S & Is' provide an interesting case of solid training institutions failing to adapt to changing circumstances - in this case, to an environment in which jobs are few. Pressed by economists worried about rates of return and little interested in what goes on inside the black box where training takes place, trainers and governments alike have been forced to redefine the very notion of training. The result has been an about-face. In contrast to times past, to some decision-makers of the present, it is the demand for training that matters. This demand needs to be closely monitored and only that training which responds to a clearly identified demand should be offered. The general rule is simple: no demand, no training.

In Latin America, this about-face has been manifested in what can be termed a 'chequebook approach' to training (see de Moura Castro, 1998). The approach is an attempt to re-engineer the entire system of training, instead of reforming the training institutes (if this occurs, it is seen as a positive spillover effect). The chequebook approach is part and parcel of larger processes to 're-invent government' and to use economic incentives in areas that have traditionally been the domain of conventional hierarchical structures. It signals a clear shift in paradigm. Rather than being an operator of training or trying to govern the training systems by means of hierarchical or administrative controls, the state becomes a buyer of training services. In this capacity, the government becomes a financial agent who establishes clear rules for purchasing training, selects the best bids and controls the quality of the service offered. The state gives up the attempt to manage institutions, as it had done with the 'S & Is'. It adopts a different strategy.

In short, the chequebook approach epitomizes a tendency that is becoming widespread in Latin America and elsewhere: that is, to create surrogate markets for services which are normally produced by the public sector. In this process, a multiplicity of suppliers - both public and private - compete for contracts. Vouchers may be used to give users full freedom to choose the services they want. Yet in all cases, funding is split from execution. The people who pay are not necessarily those who deliver the services and greater choice is given to users. 'Voting with the feet' becomes a way of controlling activities that were previously delivered under traditional public service.

1.3 The logic of training without jobs

The chequebook approach to training, although simple in conception, begs the question of how to justify training in the absence of demand. Most chequebook programmes - including those examined in this paper and those implemented in OECD countries - are created as responses to high youth unemployment (OECD, 1996; Johanson, 1994; Soffer and Zymelman, 1993). In these periods of economic downturn, too many are left without jobs, even those who have had vocational training. Yet there is an implicit assumption or hope that such programmes will alleviate the problem and create jobs.

In the assumption that training creates employment, the burden of the proof is with those who defend it. Evidence compiled to date suggests that training (except in cases of training for the self-employed or to micro-entrepreneurs) does not create employment. From much that is known, employment appears to be created when the macroeconomic variables are right and the economic climate is favourable, rather than when skilled labour is available (Lee, 1995). "The link between employment and economic growth has not become weaker... For every percentage point increase in the growth rate of a country in the last ten years there has been an increase in the level of employment" (Boltho and Glyn, 1995).

Critics of training-for-employment-creation programmes base their assertions on a series of reasonable arguments. The first is the so-called substitution effect. Under this line of thought, training may very well increase the odds of any particular person to obtain a job, yet the number of jobs at any moment is a given, determined by other variables - mostly at the macro level. Training, thus understood, substitutes one job candidate for another - and often does so at high costs to the state. Even if the employment levels of trainees increase, as compared to well-designed control groups, the substitution effect remains. Youth training programmes in the United Kingdom are a case in point. "By the mid-1980s the evidence of 'deadweight' or 'substitution' etc. told against any further use of direct youth employment or recruitment subsidies to lower the effective cost of youth labour and the government concentrated on developing the education and the training system" (Lindley, 1996:170).

The evidence required to demonstrate that training programmes create jobs is not easy to come by. Convincing evidence would have to be produced to show that either: (1) Graduates of training programmes get more jobs than they would in the absence of the programme. (2) Or, the jobs created add to the total number of jobs available, rather than merely changing the distribution of jobs in favour of those who have received training. These, of course, are two independent issues. The first concerns increasing the employability of the graduates and the second deals with the aggregate impact on employment levels of such programmes.

Both issues raise empirical questions. If (2) is satisfied but not (1), we return to the 'golden age' of the 'S & Is', that is, to a supply-driven approach to training reminiscent of the past that is neither viable nor defensible at the current juncture. If, on the other hand, (1) is satisfied but not (2), we face a substitution argument that not only is hard to dismiss but, for its advocates, is equally difficult to demonstrate in empirical terms. The empirical tools to measure the strength of substitution effects remain underdeveloped and underutilized.

1.4 Why train if there are not enough jobs?

Despite the empirical difficulties of substantiating their impact, the arguments for youth training still make sense. Key arguments are reviewed below. These arguments justify youth training on several grounds. Yet, as has been made clear from preceding discussions and those to follow, empirically demonstrating the grounds upon which each justification applies is no trivial matter.

1.4.1 Vacancies remain unfilled due to the lack of skilled workers

When firms have openings or potential openings that remain unfilled due to lack of skills on the part of candidates, training can make a significant difference. In this case, there is no substitution but a net increase in employment. This is the usual justification for youth training programmes. Government officials claim their employment agencies report many positions that remain open for lack of job-seekers with the requisite skills. By preparing youth to become skilled in the areas where lingering vacancies exist, these programmes could increase aggregate employment.

This argument makes much logical sense. However, the quantification of these job openings is always elusive and the empirical grounds upon which to expect significant employment creation are shaky at best.

The rationale is clear enough and there is casual evidence of job openings that remain unfilled due to the lack of suitable candidates, even within contexts of high unemployment. But does the evidence stand behind these assertions of surplus jobs? Not quite. Most surveys done by labour services in Latin America and elsewhere ask employers about unfilled vacancies. As any introductory text in economics suggests, demand is a function of price. There may be vacancies that remain unfilled, but at what wage levels? If sufficiently higher wages are offered, someone will appear with the requisite qualifications. Do the surveyed employers prefer to engage in wishful thinking rather than pay the prices that clear the market? Hence, most estimates of job offers, while not necessarily untrue, are not necessarily that meaningful either. The United Kingdom case provides a telling example: during "the mid-1980s especially it would seem wrong to attribute high youth unemployment or underemployment primarily to poor school preparation for the transition to work" (Lindley, 1996:159).

1.4.2 It is better to give chances to poorer kids

It is very difficult to rule out substitution effects in real-life training programmes for the unemployed. However, substitution is not necessarily a fatal argument against them. In fact, even if there is a substitution effect, training can still be justified if those who benefit from the substitution are the most vulnerable and dispossessed. The end result would be an increase in the equity of the system. Since such programmes are clearly targeted to the less educated and less affluent youth, they favour the employment exactly of those who are less well equipped to withstand the consequences of unemployment. The trainees may take away jobs from others but, at least, those who do get jobs are the most deprived candidates.

1.4.3 Training is cheaper than incarceration

Some observers advocate training on the basis of social integration and the provision of 'soft skills'. In some instances - including those examined below - training may be linked to "the need to address dysfunctions or 'pathologies' in society" (Favennec-H, 1996:667). Such objectives are becoming increasingly important, as the literature widely suggests. Under-and unemployed youth are likely to have low self-esteem and a remote notion of what work actually entails (see Soffer and Zymelman, 1993; Jacinto, 1996); they also face a greater likelihood of becoming petty or serious criminal offenders. The impact of non-cognitive benefits of training - such as discipline, learning to deal with authority and punctuality - thus cannot be easily dismissed. The bottom line is simple: training is cheaper, both in economic and social terms, than incarceration.

1.4.4 Training increases productivity, which increases growth, which increases employment

The most robust argument in favour of youth training programmes - or any training for that matter - is their strong impact on productivity and the consequent benefits of increased productivity on growth and employment creation. While this mechanism is more roundabout and takes much longer to show results, it is the most predictable.

There is ample evidence to indicate that better-prepared workers produce more. In other words, an overall environment favouring productivity growth is pitifully incomplete without the requisite skills of the labour force. Thus, even if training does not increase employment immediately and if the insertion rates of graduates are less than spectacular, training remains more than justified in the long run. This argument has strong implications for the content of training. If the benefits take some time to materialize, improvisation and stopgap policies are not justified. What matters is what lasts and not all training is equally durable or effective in the long run.

Indeed, the long-run impact may provide the strongest justification for training in a less than optimal economic context. It is in this regard that the content of training becomes critical. Durability of skills matters. If trainees are unable to find employment immediately upon completion of their programmes (as happens with some graduates of the three programmes examined here), then the real value of training may be in its provision of a more durable core of basic skills.

The exact definition of 'basic skills' remains elusive. For the sake of the present discussion, however, it suffices to say that 'basic skills' are those skills which are used in a multiplicity of situations, such as reading, writing, using numbers, analytical thinking, problem solving and team working. Thus defined, the durability of basic skills remains unquestioned. Basic skills provide a foundation upon which subsequent training and skills development can be absorbed and applied.

A solid basic education remains the best preparation for a wide range of jobs (see Dougherty, 1989). In fact, basic skills are what good education is about. Modern economies require a strong cognitive development as the foundation for vocational skills. Learning an occupation requires increasingly higher levels of understanding of scientific theories and the technological component of occupations. Part of this education should precede training, thus facilitating and shortening it. Workers with a good mix of practical skills and conceptual understanding of technology can adjust more easily to new and different occupations, grow in their careers, and adjust to technological changes. The real issue is not general versus super-specialized training but the solidity and depth of the basic skills taught with specialized training.

It should be clear that training cannot replace schools for all at the primary and secondary levels. Whereas training has done so in limited cases, such experiences cannot be generalized owing to the high cost of training. Yet training can include the theory and knowledge required for understanding the conceptual side of occupations. In this sense, good training can also impart good education. The practical orientation of training can support the development of contents that lie at the core of a good education. Reading comprehension, calculus and physical principles can be seamlessly integrated into technical and workshop subjects. The 'methodical series' delivered through the 'S & Is' provide good examples of how practice can be blended with basic conceptual skills; other interesting examples include the 'basic skills movement', 'applied academics' and the 'contextualization of learning'.

One of the strongest justifications for adding basic skills to this category of training programmes is that they boost the shelf life and amplify the reach of the training offered. If employment does not come right away and if, when it comes, it has little to do with the content of the course taken, what then will be of value to the trainee are the basic skills that have wider applicability.

Therefore, it seems reasonable to assume that the development of basic skills should be one of the main objectives of most training courses rather than casually added on to some as a response to the complexity of the subject matter at hand (e.g. some mathematics, as required by machinists). In much the same vein, the development and/or reinforcement of basic skills would be a valuable use of class time in those courses on simpler occupations (e.g. supermarkets; or sales). Yet reinforcing basic skills does not happen automatically. Considerable planning and investment are required. It is not something that can be included in the guidelines of a programme, but rather is a task that requires fixed investments in time and in review of similar experiences elsewhere. Indeed, the best training programmes around the world have benefited from, and committed significant resources to, curricula that combine and integrate basic skills.

Such considerations further evidence the need to devote more resources to the preparation of training materials. The merging of basic skills with training cannot be expected to occur when courses are contracted on a one-by-one basis. Nor is it easy to explain to training providers what is required to include basic skills in courses. Merging basic skills with training content requires that some courses be designed from the bottom-up and used as models for subsequent repetitions. To make this happen, training providers should have access to the best training materials available (books, workbooks, tapes, methodological papers; materials for training trainers; computer programmes, etc.), and additional funds should be allocated - e.g. to create experimental courses in specific areas and get support from experts. As will be illustrated further ahead, PLANFOR operates in this direction: its courses build on the accumulated experience of the 'S' system. The incentive structure found in both 'Joven' projects, in contrast, appears to operate in the opposite direction: away from a focus on materials and towards the contracting of courses made from scratch.

1.5 The limits of training

Training alone does not create jobs. To be effective, it must be carefully targeted to skills already in demand in the workplace and to emerging occupational requirements. The failure to target training along these lines stands as the primary reason why most training programmes that seek social objectives without the proper economic context produce less than convincing results. The political appeal of mounting campaigns for unemployed youth is a hardy perennial. The circular reasoning for youth training programmes suggests that disadvantaged segments of the population lack the skills needed to get worthwhile jobs and thereby lift themselves out of poverty; skills training, accordingly, provides the key to a better future for these populations. Taking these notions a step further, governments often justify public subsidies for individuals who cannot afford to buy the services themselves but remain in need of skills to access jobs.

Such arguments support the targeting of training assistance. Yet they are not sufficient. Effective training is doubly targeted: objectives are targeted as carefully as the training clientele. The skills taught must be readily absorbed in employment since training itself cannot create the jobs. "An over-expanded, overly subsidized training system that is not accompanied by increased opportunities for employment or enhanced wages will not improve welfare and is a needless waste of scarce resources" (Middleton, 1993:114). The skills taught must also be appropriate and relevant to those being trained. For programmes targeted towards disadvantaged youth, a focus on basic skills remains indispensable. Regardless of what occupation training targets, in the end, what matters on the job is the ability to think through various systems and processes, learn along the way and adapt to changes in technology or production as they arise.

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.

3. Lessons

3.1 What Argentina and Chile can learn from Brazil

Most observers consider Chile Joven and Proyecto Joven as vastly successful training programmes. This paper concurs with this overall assessment of two programmes in an area where failures are much more common than successes. Yet the shortcomings of the two projects cannot be ignored.

Both programmes appear to offer training of substandard quality. In the case of Argentina, one of the authors visited a number of such programmes and confirms that they are not commensurate with the country's level of development. Worse, the format of the programmes is not conducive to the kind of accumulation of experience that would lead to social learning and the progressive improvement of training. Contracts have a short life and institutions are too small - more often than not, composed of a single individual who may hire a trainer or two - to be nodes of serious learning. There thus is little reason to expect improvements as time goes on. Learning simply cannot take place.

The two 'Joven' programmes have much to learn from the long and continued experience of the older members of the 'S' system, particularly SENAI and SENAC. Cumulative experience, made possible by the continuity and stability of these institutions, has led to the continuous improvement of courses of study. Based on surveys of former graduates and contacts with enterprises, these institutions fine-tune their offerings and update their training materials and syllabi as changes in the economy and business climate dictate. Since many of the training contracts offered by PLANFOR end up in the hands of 'S' institutions, PLANFOR courses benefit from a long-established tradition of preparing courses, developing materials and training instructors. Even when the training goes to other independent institutions, chances are that some trainers will be former SENAI or SENAC trainers who bring to the classrooms and workshops similar experience. This experience has also brought a focus on basic skills - the most durable of all skills provided through the type of training programmes considered here - to PLANFOR-sponsored training courses. These factors, individually and collectively, provide PLANFOR with an intrinsic quality that appears to be missing in the Chilean and Argentinean programmes.

3.2 What Brazil can learn from Argentina and Chile

PLANFOR is a newcomer, albeit one supported by a well-established tradition and infrastructure. Created in a country with considerable experience in providing training that responds sufficiently to demand, PLANFOR emerges as an idea whose time has come. The 'S' system established an exemplary set of vocational training programmes geared towards the needs of the modern sector. Yet, as discussed above, the system hardly touched the formidable need to train those in the informal sector, small or micro enterprises, or lost somewhere in activities where little formal training is offered. The time was ripe to fill this void, and the availability of funds from FAT made the programme possible.

For reasons that are not easy to fathom, PLANFOR delivers training through mechanisms that are definite steps backwards with respect to the two 'Joven' projects (and with respect to the 'S' system rules as well). PLANFOR allocates courses on the basis of centralized procedures, with little inquiry into the realities of market demand and scant participation or input from course providers. PLANFOR thus commits the most egregious of all training errors: its high-quality training is ineffectively and inappropriately targeted; the match between the demand for training - both from the market and needy clienteles - and its supply remains loose at best.

One of the most obvious questions asked about the type of programmes examined here is whether they do indeed help trainees get and maintain jobs. As noted above, regression data (probit and logit) from the Pernambuco case indicate that those who take the training courses do not increase their chances of getting jobs (see Barros et al., n/d). In fact, their chances fall but the difference is not statistically significant. Insofar as results from the two 'Joven' projects are better, the question remains as to whether Brazil would be well advised to increase the duration of PLANFOR training. If courses are too short and their targeting is inadequate, training is not likely to be effective - even if provided in a country like Brazil where there is a long-established tradition of quality training. Indeed, issues such as these should have been taken into consideration during the preparation of PLANFOR: the programme was implemented several years after results and evaluations of the two 'Jovens' had been made available. Clearly, in these regards, Brazil can learn a lesson or two from its next-door neighbours.

3.3 Lingering dilemmas: more equity or more jobs?

The entire issue of whether programmes such as those examined here indeed favour the most deprived job candidates is no simple task. Although the programmes include built-in mechanisms to target disadvantaged youth, the doubtful reputation of this clientele is one of the main factors that make employers reticent about offering an internship. Indeed, field visits confirm that some students come to school with concealed weapons and trainers repeatedly face threats of antisocial behaviour from a small minority of trainees. Regardless of these considerations, the programmes examined here appear to have produced notable results, both in terms of targeting and in terms of employment. But gains in equity involve considerably more complex issues. By targeting unemployed youth, the programmes may be displacing older workers - e.g. those who find it more difficult to survive under unemployment and often have a family to maintain. In this respect, any gain in equity is questionable.

In addition, some evidence from Argentina and Chile questions the positive substitution effect promoted by the 'Joven' projects. In times of economic growth, large enterprises often see internships as a means to select the best new employees from a pool of candidates. Internships are a free trial run on possible future employees: someone else is doing the training and the initial selection. The left tail of the distribution thus is eliminated, and all the enterprises have to do is pick the best of the crop (see Jacinto, 1996; de Moura Castro, 1997). In contrast, when economic growth is stagnating, internships are often seen as sources of cheap semi-skilled labour. In such cases, enterprises may offer internships in areas where there are no possibilities of paid labour in the future (see Jacinto, 1996; de Moura Castro, 1997).

Training thus reverts back to its most embarrassing problem: that of training to simultaneously respond to social and to economic needs. The greater the success of the programme in finding jobs for the graduates, the greater the sacrifices in targeting the poor. The more a programme targets those who truly are the most deprived, the less it achieves in terms of finding jobs for them. Any solution is a compromise.

4. Conclusion: are youth training programmes still a good idea?

In the light of these results, why would countries like Chile, Argentina and Brazil want to continue youth training programmes in the future? Several industrialized and developing countries have conducted similar programmes and justified them on the basis that they show concern and action on the part of the government. But this is an expensive way to improve the public image of a government.

The results of the programmes examined throughout this study confirm that some trainees are getting more jobs than their counterparts who did not receive training. Not bad in an area fraught with outright failures. But, be that as it may, we still insist that the ultimate impact of training is on productivity. Thus, a reasonable justification for the continuation of such programmes is their impact on productivity: training increases productivity, which increases growth, which increases employment. Increases in productivity, as has been argued throughout this paper, often are not immediate - nor, by extension, are the payoffs of training. Rather, it is the longer-term impacts of training which justify the creation and continuation of training programmes such as those examined here in the short term. Demand-driven training targeted to disadvantaged youth or other groups makes sense, even in the absence of immediate employment prospects. Training strengthens and extends the 'durability' of many core skills. It is this 'durability', in turn, that prepares and sustains the foundation for growth and employment in the future.

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