Unintended Displacement Effects of Youth Training Programs in a Directed Search Model

Marcos Gómez, Francisco Parro

Research output: Contribution to journalArticle

Abstract

The rise in the productivity of inexperienced young workers suggests a positive partial equilibrium effect of youth training programs on employment. However, in a general equilibrium context, displacement effects that impact other groups of workers could also arise. We build a directed search model to study the unintended displacement effects of youth training programs. We calibrate the model to match data from the US labor market. The model is then used to simulate a policy experiment that resembles a training program that raises the productivity of a targeted group of low-skilled and inexperienced agents. Our counterfactual analysis shows that the policy indeed triggers displacement effects. Consequently, these unintended displacement effects must be taken into account in the evaluation of youth training programs.

Original languageEnglish (US)
Pages (from-to)230-247
Number of pages18
JournalJournal of Labor Research
Volume40
Issue number2
DOIs
StatePublished - Jun 15 2019

All Science Journal Classification (ASJC) codes

  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation

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