THE WAGE EFFECT OF YTS: EVIDENCE FROM YCS
| Author | John G. Treble,Peter J. Dolton,Gerald H. Makepeace |
| Date | 01 November 1994 |
| DOI | http://doi.org/10.1111/j.1467-9485.1994.tb01138.x |
| Published date | 01 November 1994 |
Scorrish
Journal
of
Pohricai
Economy,
Vol.
41.
No.
4.
November
1994
Q
Scottish Economic Society
1994.
Published by Blackwell Publishers,
I08
Cowley Road. Oxford
OX4
IJF.
UK
and
238
Main
Street.
Cambridge, MA
02142.
USA
THE WAGE EFFECT OF YTS: EVIDENCE
FROM
YCS
Peter
J.
Dolton*,
Gerald
H.
Makepeace** and
John
G. Treble***
I
INTRODUCTION
During the last fifteen years, government sponsored youth training has become
an essential component of the youth labour market, absorbing significant
amounts
of
government money and providing an entry point into the labour
market for large numbers
of
young people. During the
1980s,
the original
Youth Opportunities Programme was followed, in turn, by the one year Youth
Training Scheme (YTS), the two year YTS and Youth Training (YT). Political
necessity initially played
a
major role and the early programmes had the
appearance
of
job creation schemes whose main purpose was to remove young
people from the unemployment register. Over time, concern with training
became more important and a constant theme as the schemes changed was the
improvement
of
the training component, both in terms
of
length and quality.
Econometric assessments
of
the impact
of
these schemes compare the labour
market outcome for an individual assuming they had not participated on YTS
with the outcome assuming they had. Two measures
of
success are used: the
‘employment effect’ and the ‘wage effect’. The ‘employment effect’ shows the
change in the probability of obtaining employment attributable to YTS and the
‘wage effect’ the change in earnings paid. The present paper is concerned with
the measurement of wage effects resulting from government sponsored
training.
’
Previous attempts to measure the wage effect are not encouraging
either
for
the individuals involved or for the taxpayers who ultimately fund the
programme, and are aptly summarized by Main and Shelley: ‘The lack
of
any
statistically robust positive wage effect arising from participation on
YTS
might
serve as a caution to policy makers intent on making participation on YTS
compulsory for unemployed young people’ (Main and Shelley,
1990,
p.
512).
Our methodology and data can be distinguished from previous studies in at
least two important respects. Firstly, the two year YTS scheme, rather than the
one year scheme, was in operation during the period
of
our data, making it
closer to Youth Training (the current scheme). Improved training was the
major justification claimed for the two year programme and
it
would be
valuable to see whether it had
a
bigger measurable impact. Secondly, the set
’
An empirical study
of
employment effects using duration analysis on these data is given
in Dolton, Makepeace and Treble
(1994).
*
University
of
~ewcast~e
**
I**
University
of
Hull
University
of
Wales, Bangor
444
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