Over the past two decades, several Latin American and Caribbean countries have transferred cash to poor families in exchange for meeting certain conditions, such as sending their children to school and visiting doctors regularly. These conditional cash transfers have improved the lives of millions of poor families. Today they are recognized as an effective tool to combat poverty and are used throughout the developing world.
However, governments are looking for new ways to use the transfers to support poor families. For example, how can these programs help adults find stable and well-paying jobs?
Jamaica is looking to answer this question by testing an on-the-job training initiative specifically targeted to families that participate in its conditional cash transfer program. The pilot project, which is financed by the IDB, will subsidize up to three months of training in private firms for 1,500 beneficiaries and then track their ability to find suitable employment. The project also includes job and literacy training, entrepreneurship programs, and job search workshops.
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The pilot program is part of an ongoing project in Jamaica to improve the overall framework of its labor market policies. In particular, the IDB is working with Jamaica to enhance its electronic labor exchange and create new partnerships with business associations to better match job seekers with potential employers.
As reported by different IDB studies, on-the-job training has been quite effective in Latin America both in terms of creating new employment opportunities and increasing wages. In the longest-running training programs in the region, as many as 70 percent of participants have found jobs. Such results are in line with independent impact evaluations from a range of on-the-job training and classroom-plus-internship training models in several parts of the world that report job placement rates from 50 to 70 percent. In Latin America and the Caribbean, job training programs have been most successful when they target high-growth sectors, are concentrated on urban areas, and use a national marketing program to make firms aware of the training received by beneficiaries.
The proposed pilot will draw on these successful experiences and include an impact evaluation to measure employment and employability outcomes relative to those who do not benefit from the program. Results from the pilot could well provide a path into the job market for millions of people in the future who currently have few options except to rely on government support.