Occupational training and the employment and earnings of Peruvian male and female workers

This dissertation is the first empirical evaluation of occupational training policies in Peru since in the 1960s. Using a human capital framework, the dissertation analyzes patterns and determinants of participation in post-school vocational training programs, and the labor market outcomes of that training by gender in urban Peru. The analysis is conducted on a sample of 6,000 individuals drawn from the Peruvian Living Standards Survey (1985-1986). In general, males and females with less than secondary schooling--which constitute over 50 percent of the urban labor force, do not receive skills from the institutional training system. Moreover, the probability of receiving job-training is largely determined by schooling, where secondary education is the minimum to enter training programs. This suggests that workers with limited schooling also face limited job-training opportunities, and that training does not substitute for the lack of formal schooling. Therefore, policies promoting job-training to enhance the opportunities of the less educated segments of the labor force are not appropriate. Investments in job-training for males show significant earnings gains only when related to wage employment in the private sector. No earnings gains were found for males in self-employment. This unexpected finding may indicate either that job-training is not valuable for the self-employed because they perform traditional jobs that do not involve skill development, or that training is a "screening device" which then affects salaried workers only. Among women, training increases their employment probabilities in all sectors, but does not increase their earnings. Several explanations are advanced. First, women's expectations of interrupted labor force participation may lead them to occupations with lower human capital requirements, and hence lower returns to training investments than those chosen by men. Second, the low quality of the training received by women--who attend mostly proprietary schools, may explain the lack of an earnings effect. Finally, wage and occupational discrimination may prevent women from entering the most successful training programs and the better jobs as well. Regardless the reason, these results imply that job-training alone is not an effective means to increase women's labor market competitiveness relative to men's in Peru.