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 Vietnam
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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
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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?

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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

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AIMS

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

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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

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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?

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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.

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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.

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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

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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

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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.

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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.

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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.

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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.

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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

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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

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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.

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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.

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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.

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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

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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.

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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.

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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

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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

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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.

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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)

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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.

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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).

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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

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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

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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

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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

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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.

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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.

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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

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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.

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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

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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.

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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

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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,

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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.

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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.

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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.

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THE RESEARCH TEAM

• Dr. Xuan Ba Le
• MBA Lan Anh Vu
• MPP Huy The Nguyen
• MPP Minh Thao Ta

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PARTNERS/COLLABORATORS

• CIEM departments (MPI)
• State Capital Investment Corporation (MOF)
• Department of Vocational Training (MOLISA)
• Provincial Department of Labor, War Invalids and
  Social Affairs (DOLISA)
• Training providers
• SOEs
• Dr. Tri Thanh Vo

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TASK ALLOCATION
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Workplan
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• THANK YOU!