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Lang moi o Hanquoc va Vietnam

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DOES TRAINING VOUCHER HELP INCREASE INCOME OF REDUNDANT WORKERS OF RESTRUCTURED SOES IN VIETNAM? Lan Anh Vu Central Institute for Economic Management – PowerPoint PPT presentation

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Title: Lang moi o Hanquoc va Vietnam

1
DOES TRAINING VOUCHER HELP INCREASE INCOME OF
REDUNDANT WORKERS OF RESTRUCTURED SOES IN
VIETNAM?
Lan Anh Vu Central Institute for Economic
Management Vietnam
2
Key contents - Abstract - Aims, research
questions - Literature Reviews - Policy
relevance for Vietnam - General description -
Randomized experiment - Modeling and testing -
Research team - Partners/collaborators - Task
allocation and workplan
3
ABSTRACT (1)

5,203 Vietnamese State-owned enterprises have
been restructured, inclusive of 3,680 equitized
About 410 m was disbursed to nearly 200,000
redundant workers
A number of schemes have been introduced,
inclusive of training voucher.
Is training voucher directly improving the human
capital (get new jobs, start new businesses...)?
Are there other factors influencing the increased
earnings of this group?

4
ABSTRACT (2)

A number of redundancies need additional skills
to enhance their job-seeking opportunities,
especially in the increasing competitive labor
market in Vietnam
There have not been any quantitative studies on
the actual impact of this program over the
increase in income of redundancies?
gt necessary to assess the impact of this program

5
AIMS

To determine whether the training voucher
programs is necessary
If yes, which policy adjustments should be made
to enhance its efficiency

6
Core Research Objectives

Assess the impact of the training voucher scheme
over the employability of redundancies of
restructured SOEs.
Assess the impact of the training voucher scheme
over monthly income of redundancies of
restructured SOEs.
Make policy recommendations

7
Research questions

Does training voucher scheme help redundancies of
restructured SOEs in Vietnam improve their
employability?
To what extent does training voucher scheme have
impacts over the monthly income of redundancies
of restructured SOEs in Vietnam?
What are policy implications on the training
voucher scheme?

8
LITERATURE REVIEWS (1)

Job training programs are quite common in
developed countries like the USA and Europe. In
the USA, credible randomized evaluations can be
found in such programs as the Job Partnership
Training Act (Bloom et al, 1997 GAO, 1996
Heckman et al, 1999), the Job Corps (Burghart and
Schochet, 2001) and a series of program for
welfare recipients (Friedlander et al, 1997).
Such studies produce quite different results.

9
LITERATURE REVIEWS (2)

Job Partnership Training Act, the short-run
impacts for young disadvantaged women are
essentially zero (although the long-run impacts
appears to be more positive (GAO, 1996)), while
the short-run impacts for young disadvantaged men
are negative
Job Corps had a significant positive impact on
both genders. Lee (2005) proves that Job Corp had
about a 12 percent effect on earnings three years
after training.

10
LITERATURE REVIEWS (3)

Many non-experimental evaluations training
programs help increase post-program employment
rate rather than increase wage rate training
makes a positive contribution on wage growth
which translates into a company rate of return of
at least of 13 using data on performance
ratings shows that training leads to an
improvement in job performance

11
LITERATURE REVIEWS (4)

literature on cases of developing countries
remains more limited.
Betcherman et al training impacts in Latin
America are more positive than the impacts of
programs in the USA and Europe.
Card et al (2007), with an experimental design
for a job training program in Latin America the
Juventud y Empleo (JE) program in the Dominican
Republic had no significant effect on employment.
There is evidence of a modest (10) impact on
hourly wages and earnings per month, although the
estimated are only marginally significant.
Another randomization in Argentina
Galasso et al, 2001 Voucher recipients had a
significantly higher probability of employment,
though their current incomes were no higher, and
training had no significant impact

12
LITERATURE REVIEWS (5) the gaps?

Randomization researches on vocational training
in developing countries are more limited than in
developed countries in which the number of people
need vocational training may be higher.
No randomization studies on vocational training
programs in Vietnam yet. Even non-experimental
researches on this issue are quite rare.
Most programs in other countries aim at the
youth, the poor or some other disadvantaged
groups. There are few quantitative studies on
impacts of vocational training provision for
redundancies due to enterprise restructuring
who may need a special scheme.

13
LITERATURE REVIEWS (6) Conclusion

Different results from different studies in
different places show that it is necessary to do
a special study for a special case (country)
In Vietnam, there is no quantitative study on
this issue. There is still the gaps in studying
to fill up.
To make useful policy advice, we should conduct a
serious study.

14
The study should be a randomization

To assess the policy impacts, we should realize
difference between supported and non-supported
redundancies, so the random experimental method
is suitable for the study
Econometrics methods and some software programs
such as STATA, Eviews, can help us to estimate
that difference.

15
POLICY RELEVANCE FOR VIETNAM

A vocational training scheme for redundancies due
to SOE restructuring a start for other national
similar schemes
A scientific study on this issue as randomized
experiment on training voucher scheme for
redundancies may help identify the actual impacts
of the scheme, which provides quantitative input
for policy recommendations.
There should be programs for redundancies of
private companies or programs for the youth, so
the results from this study may shed some light
for such future programs in the future.

16
GENERAL DESCRIPTION (1)

Conduct a randomization project on the targeted
population
1,500 SOEs to be restructured, the estimated
population of redundancies may be around 100,000.
About half of them are under 45 and need to get
new jobs for their living.
A sample will be drawn by selecting redundancies
in SOEs starting their restructuring in 2007,
between 18 and 45, who have completed secondary
schooling level at least and have not taken any
vocational training courses after being made
redundant

17
GENERAL DESCRIPTION (2)

The sample will be divided equally into control
and treated groups. The treated group will
receive free vocational training. Both groups
will also receive job search assistance. After
twelve months from the completion of training,
both groups will be surveyed.
Expected outcomes
Those in the treated group can find jobs
Their monthly earning is higher
The increased income is economically significant

18
GENERAL DESCRIPTION (3)

Timing The twelve-month period may be deemed
sufficient for the evaluation of impacts.
Randomization studies on training programs in the
US also have similar timing of effects.
Data Both existing and new data will be used.
Existing data from Ministry of Finance to get the
overall information of redundancies.
New data from the baseline and follow-up surveys.

19
RANDOMIZED EXPERIMENT

Roughly select eligible candidates from the lists
of redundancies of restructured SOEs (high number
of redundancies, operating in a limited number of
industries and concentrated in certain provinces)
A baseline survey will be conducted to identify
characteristics of redundancies
Randomly and equally divide them into control and
treatment groups. The treatments will receive
free vocational training, while the controls will
not and also not take any vocational training
courses funded by the Government.
Both groups will receive job search assistance.

20
RANDOMIZED EXPERIMENT

Training courses may last for three months and
redundancies then need at least six to twelve
months to search for new jobs or start new
businesses
The survey will be conducted to assess the impact
of the scheme.

21
Selection of Training Providers (1)

How to choose the best training institutions for
participants?
via a competitive process (regardless of their
ownership structure). Proposals from potential
training providers were required to include
written commitments from one or more firms to
offer a two-month internship to all trainees from
the providers program (if any).
They will be also required to provide counseling
and technical assistance

22
Selection of Training Providers (2)

Several training institutions may be selected
depending on types of training courses and
location of training to reduce training cost of
the experiment. However, there will be only one
training curriculum for each training topic.
The Department of Vocational Training of Ministry
of Labor, War Invalids and Social Affairs may
help recommend bidders and evaluate training
proposals.

23
Selection of Training Providers (3)

Job search assistance
Training providers also provide information on
local labor market demands, job vacancies and job
brokerage centers.
Such information will be circulated to
participants by the research team to ensure
homogeneous information supply.

24
Choosing Participants

In selected enterprise/province, a group of at
least 40 eligible participants are identified
20 treated participants selected by lottery among
eligible candidates the other 20 will be
considered as the control group.
Up to 10 people in the control group may be
reassigned to the treatment group by lottery if
one or more of the original treatments fail to
show up for training (no-show) or drop out
within the first two weeks of the course
(drop-out).
Certain demographic characteristics of
redundancies (such as age, gender) and/or initial
income level may be taken into account to ensure
the initial similarity of the control and treated
groups

25
Training Course

The training course will be designed to meet the
labor demand of local employers. Trainees can
enjoy technical counseling from training
providers and internship scheme, as well as job
search assistance as mentioned above.
The control group may get job search assistance
as a benefit of participation in the experiment

26
Estimated Training Cost

Tentatively the training cost per participant
will be USD 200.
In addition, daily stipend to support for their
lunch and traveling cost.
Some participants who live far from the training
venue may receive additional allowance for hotel
accommodation.

27
Data Collection Method

Information on restructured SOEs between 2007 and
2009 got from the State Capital Investment
Corporation (under Ministry of Finance) who is
assigned to manage and disburse the Redundancy
Fund will help save costs.
Dealing with the enterprises managers who help
circulate invitations to the experiment among
eligible redundancies of these enterprises will
help get information from applicants (a survey
can gathers more detailed information on their
age, education, employment status, income,
training need, etc)

28
Data Collection Method

Designing questionnaires for the surveys
to get initial /basic information of redundancies
to get information from them after the
experiment, different for the treatment and the
control
Twelve months after the training, the treatment
group will be interviewed. The control group will
be also interviewed (maybe earlier) to ensure
that both groups will be assessed after twelve
months of participation.

29
Sample size

Since there is no other related studies except
for the survey of the Ministry of Finance which
does not provide sufficient information, we has
to make their own guess.
To calculate the sample size under the formula
proposed by Bloom (2006)
Empirically, our sample size of 350 is
sufficiently credible (n treated 174).

30
Calculating sample size by Blooms method

Consider a balanced allocation of sample size,
i.e. half of the sample is randomized to a
treatment group and half is randomized to a
control group, and everyone adheres to their
assigned treatment. Follow-up data are obtained
for all sample members and the treatment effect
is estimated by the difference in mean outcomes
for the two groups . This difference provides an
unbiased estimate of the average treatment effect
(ATE) for the study sample, because the mean
outcome for control individuals is an unbiased
estimate of what the mean outcome would have been
for treatment individuals had they not been
offered the treatment (their counterfactual)
However any given sample can yield a treatment
group and control group with pre-existing
differences that occur solely by chance and can
overestimate or underestimate the ATE

31
Calculating sample size by Blooms method

The standard error of the impact estimator
accounts for this random error is
Where
P is the proportion of the sample that is
randomized to treatment
N is the sample size
is the outcome variance across subjects in the
experiment group
And
Where
MDE (minimum detectable effect) is the smallest
true treatment effect that the research design
can detect with confidence.
Mn-2 is the multiplier given by a t-table
? n s2 (Mn-2/MDE)2/P(1-P),
so if we want to have confidence at least 90,
MDE 0.3, while P 50, Mn-2 2.8, then sample
size should be 350

32
Questionnaires the baseline

The baseline questionnaires will be the same for
both control and treated groups. Key data
include
Classification of nominal data to identify
control and treatment individuals
Contact addresses of the redundancy and one
his/her next of kin
Demographic characteristics (age, gender)
Education level
Living location
Income level and sources of income at the time of
redundancy
Level of working skills, reasons of redundancy
Training needs
Expectation of new jobs (type of job, expected
earnings, whether willing to move to other
regions to search jobs, etc).
Commitment to experiment participation
Any suggestion to experiment organizers

33
Questionnaires the post-experiment

Key data include
Assessment of training courses taken
(suitability, usefulness, quality this question
only for the treated participants)
Do they need to take any vocational training
other than the one provided under the experiment?
Monthly earnings after twelve months of
experiment
Income level and sources of income after twelve
months of experiment
How is their new job finding? Types of new jobs
or new business they have found? How long can
they find a new job? How easy to find a job? Why?
Is it a long-term or short-term job?
Are they entitled to social insurance scheme?
Are training skills useful and/or suitable with
their new jobs? (Note this question is only for
the treated participants)
Other reasons for income gain
Any suggestions to government policy

34
Which troubles may occur and solutions (1)

Those in the control group may also receive
training vouchers provided by the Government a
survey of the Ministry of Finance shows that only
3.7 of redundancies have taken training courses
so far, it shows the hesitation of redundancies
on taking vocational training courses ? the
training should be conducted right after the
redundancies and their training needs are
identified.

35
Which troubles may occur and solutions (2)

May be difficult to identify the whole population
within several months since SOEs who may conduct
their restructuring process at different times in
the year.
To solve this, the research team will try their
best to identify as many redundancies within
several months as possible. In addition the team
intends to extend the selection to redundancies
of SOEs started their restructuring since 2007.

36
Which troubles may occur and solutions (3)

The treatments are either dropout or no-shows,
and/or the control may move to the treatment or
leave ? the outcome of the analysis may not show
the true picture of the average value of the
training.
To prevent these
a competitive bidding process to select the best
training providers to ensure high training
quality.
participants will be informed that they will get
job search assistance after completing the
courses.
a cash allowance and regularly trace them at
least once a quarter

37
Which troubles may occur and solutions (4)

Difficult to trace participants after twelve
months. The individuals who are most successful
in the market might be harder to interview
because they have moved elsewhere or because they
are so busy working that they do not have time to
be interviewed. Alternatively, those who are
least successful might be easier to
interview-because they arent working-or might be
harder to find and interview, for example if they
migrated to another city for working.

38
Which troubles may occur and solutions (5)

To solve this problem
job search assistance and certain allowance for
the controls to encourage their full
participation. Meanwhile the treatments will not
receive the original of the training certificate.
participants have to provide contact information
of themselves and one of their closest relatives.
When they move to other provinces to find jobs,
the team may contact their next of kin for
information.
the team will try to trace them every quarter by
phones and/or emails to timely include
substitutes if some of them cannot be traced
after six months.
if the attrition rate remains high, the team may
use statistical techniques to solve the attrition
bias problem

39
What does the research team do?

be in charge of designing and monitoring the
experiment.
deal with SOEs, redundancies, training providers
and related government agencies,
conduct the selection of training providers and
experiment participants.
cooperate with other organizations to conduct the
data collection, for example provincial
Department of Labor, War Invalids and Social
Affairs, local Statistic Offices
conduct data analysis and report writing, once
the experiment completes.

40
MODELING AND TESTING (1)

Assume that we have a large number of
redundancies. Some take training courses and
others do not. We can take the average of both
groups and examine the difference between average
monthly earnings of those taking training courses
and those not taking training courses. In a large
sample, this will converge to
D EYiT redundance with training EYiC
redundance without training
EYiT T EYiC C
EYiT T EYiC T - EYiC C EYiC
T
EYiT YiC T EYiC T EYiC C

41
MODELING AND TESTING (2)

When we conduct the randomization with treatment
and control groups, the average treatment effect
can then be estimated as the difference in
empirical means of Y between the two groups.
Where Ê denotes the sample average. As the sample
size increases, this difference converges to D
EYiT T EYiC C
Since the treatment has been randomly assigned,
individuals assigned to the treatment and control
groups differ in expectation only through their
exposure to the treatment. Had neither received
the treatment, their outcomes would have been in
expectation the same. This implies that the
selection bias, EYiC T EYiC C, is equal
to zero. If, in addition, the potential outcomes
of a redundance are unrelated to the treatment
status of any other redundancies, we have
EYi T EYi C EYiT YiC T EYiT
YiC,

42
MODELING AND TESTING (3)

The estimation equation is
Y ß0 ß1T e
Where
Y is the average monthly income of redundancies
twelve months after the training course
T is dummy variable (T1 if the redundant
receives training voucher, and T0, if not)
Hence ß1 can be considered as the impact of the
scheme over income Y. It is expected that ß1 gt0
which means the training voucher scheme helps
increase the income of redundancies.

43
MODELING AND TESTING (4)

Similarly the team will assess the employability
of participants between the control and treated
groups.
Depending on the availability of data, the team
may assess other outcomes like mean time to find
a job, types of job, income sustainability, etc.
For testing, the null hypothesis is
H0 µtreatmentµcontrol.
T-test will be used to examine the differences
between treatment and control groups twelve
months after the training course.

44
MODELING AND TESTING (5)

One important assumption for the above
regression is that T does not correlate with e or
E(eT)0. Since at this moment it cannot be
assured that such assumption can be met, another
estimation may be also utilized. Specifically
Y a0 a1T ?1X1 . ?nXn e
Where X1,., Xn are such variables as initial
income, professional skill level, experience,
region, gender and so on. This will help identify
whether these factors have additional impacts on
the income of redundancies. However to ensure the
statistical power of the sample, the number of
factors will be limited to less than ten.

45
THE RESEARCH TEAM