What we've learned by comparing cash to job training

Is it better to spend funds on training young people or hand them the cash instead? Today, Craig McIntosh and Andy Zeitlin released the 18-month readout from our work hoping to help answer this question for a group of young people in Rwanda, using survey data collected pre-COVID. We’re grateful to our partners at USAID, Google.org, and EDC for their grit and boldness in making this project happen. We’ll learn more after the 36-month follow-up survey in early 2021, but this is what the researchers have found so far:

We use a randomized experiment to compare a workforce training program to cash transfers in Rwanda. Conducted in a sample of poor and underemployed youth, this study measures the impact of the training program not only relative to a control group but relative to the counterfactual of simply disbursing the cost of the program directly to beneficiaries. While the training program was successful in improving a number of core outcomes (productive hours, assets, savings, and subjective well-being), cost-equivalent cash transfers move all these outcomes as well as consumption, income, and wealth. In the head-to-head costing comparison cash proves superior across a number of economic outcomes, while training outperforms cash only in the production of business knowledge. We find little evidence of complementarity between human and physical capital interventions, and no signs of heterogeneity or spillover effects.

Read the full study here.