© 1994 International Bank for Reconstruction and Development / The World Bank
research-article |
The Impact of Mexico's Retraining Program on Employment and Wages
At the World Bank, Ana Revenga is in the Latin America and Caribbean Country Department II, Michelle Riboud is in the Europe and Central Asia Country Department IV, and Hong Tan is in the Private Sector Development Department. Ana Revenga also holds a joint appointment at the Banco de Espana. The authors thank the Directión General de Empleo, Secretaría del Trabajo y Previsión Social, Mexico, for providing the data used in this article. They also acknowledge Feliciano Iglesias, Frank Lysy, Sweder van Wijnbergen, and the journal referees for their helpful comments, and Muriel Aza for providing competent research assistance.
This article analyzes the impact and effectiveness of the Mexican labor retraining program for unemployed and displaced workers—Programa de Becas de Capacitación para Trabajadores (PROBECAT). The strategy followed is to compare the post-training labor market experiences of trainees with those of a comparison group—a matched sample of unemployed individuals who were eligible for, but did not participate in, PROBECAT. The results of this exercise suggest that participation in PROBECAT reduced the mean duration of unemployment for both men and women trainees and increased the monthly earnings of men, but not of women. The results also indicate that the post-training earnings effect varied systematically by level of education attained, with the largest earnings increases (of about 28 to 37 percent) found for men with six to twelve years of education.