Economic Research Forum (ERF)

Vocational training fails the cost-benefit test: evidence from Turkey

Rising unemployment in Turkey during the global financial crisis prompted the government to expand its provision of free vocational training. This column reports an evaluation of the newly introduced programme, which finds that the costs of training the unemployed exceeded the benefits.

In a nutshell

Vocational training programmes can struggle to have any meaningful and sustained impact on the employment outcomes of the unemployed.

Despite a small short-term improvement in employment in the first year, Turkey’s training programme didn’t improve people’s chances of being employed three years later.

Other evidence indicates that this result is not unique to Turkey, and suggests that in most cases, skills training programmes do not pass a cost-benefit test.

Over the last decade, the World Bank and its client governments have invested almost $1 billion a year in vocational training programmes for the unemployed. But in a large-scale randomised experiment evaluating Turkey’s programme, our research finds that despite a small short-term improvement in employment in the first year, the training didn’t improve people’s chances of being employed three years later.

We conclude that the costs of training the unemployed exceeded the benefits. These impacts are much less than expected by both the participants and the Turkish government.

Programme evaluation

Unemployment in Turkey rose during the global financial crisis, especially for youth. In response, the government expanded its free vocational training programmes, based on the idea that the unemployed often lack the right skills for the jobs that are available. The courses cover a wide range of fields, they are offered by both public and private providers, and they generally run for six hours a day over a three-month period.

So does vocational training actually improve unemployed people’s chances of finding work, and do the jobs pay enough to justify the costs? The typical problem in evaluating the impact of such programmes is that the people who attend training may not be comparable to those who don’t, making it difficult to know whether any differences in their subsequent employment outcomes reflect the impact of the course, or just that those who take the courses differ from those who don’t.

But in the Turkish case, the courses were so popular that in many cases more people registered than there were available slots. This allowed us to carry out a randomised controlled trial to measure the programme’s impact: 5,902 applicants who passed the eligibility criteria were randomly assigned to a slot in a course (a ‘treatment group’ of 3,001 applicants) or not (a ‘control group’ of 2,901 applicants).

This random assignment ensured that on average the two groups were similar to one another before training, so that any differences in employment outcomes afterwards would reflect the result of the training.

The evaluation covered courses in the last quarter of 2010 and the start of 2011. A follow-up survey took place one year after the courses ended, while employment outcomes over a longer three-year period were obtained by tracking participants through the social security system.


The programme had a small positive impact in the first year. There was a three percentage point increase in formal employment, compared with a 29% employment rate for the control group. But this had disappeared by the third year, when the employment rates were similar for both groups.

The lack of impact doesn’t appear to be due to the duration of the course or the quality of the staff, with no larger impacts for those taking longer courses or courses taught by more educated or experienced instructors.

The cost of the training programme averaged $1,600-1,800 per person trained. People enrolled in public courses earned an extra $15 a month, but this gain did not last more than one and half years, so that the cost of the course wasn’t offset by higher earnings or lower unemployment. Private courses did slightly better, but still had costs that exceeded the gains.

Surveys of programme officials and participants reveal that they expected much higher impacts from the programme: participants expected a 32 percentage point increase in the likelihood of employment, and programme officials a 24 percentage point increase, compared with the short-term increase of three percentage points that actually occurred and no long-term effect.

Our findings suggest that vocational training programmes can struggle to have any meaningful and sustained impact on the employment outcomes of the unemployed. A recent review (Blattman and Ralston, 2015) shows that this result is not unique to Turkey, and suggests that in most cases, skills training programmes do not pass a cost-benefit test.

Further reading

Blattman, Christopher and Laura Ralston (2015) ‘Generating Employment in Poor and Fragile States: Evidence from Labor Market and Entrepreneurship Programs’, Poverty Action Lab.

Hirshleifer, Sarojini, David McKenzie, Rita Almeida and Cristobal Ridao-Cano (2016) ‘The Impact of Vocational Training for the Unemployed: Experimental Evidence from Turkey’, Economic Journal 126(597): 2115-46.

Most read

Fair competition is needed to empower women economically in the Arab world

The participation rates of women in the labour market in Arab countries are the lowest in the world. This column argues that remedying the under-representation of women in the labour force is a social and economic imperative for the region. There are three dimensions for action to realise the potential of Arab women: amending laws and regulations; instilling fair competition in markets; and promoting the digital economy.

Arab countries are caught in an inequality trap

Conventional wisdom, based mainly on surveyed household income distribution statistics, suggests that inequality is generally low in Arab countries. At the same time, little attention has been devoted to social inequalities, whether in terms of outcomes or opportunities. This column introduces a forthcoming report, which offers a different narrative: based on the largest research project on the subject to date and covering 12 Arab countries, the authors argue that the region is caught in an inequality trap.

Recession without impact: why Lebanese elites delay reform

The survival of Lebanon’s political elites is highly dependent on the wellbeing of the economy. Why then do they delay necessary reform to avoid crisis? This column examines the role of politically connected firms in delaying much-needed economic stabilisation policies.

Competition laws: a key role for economic growth in MENA

Competition policy lacks the attention it deserves in the countries of the Middle East and North Africa (MENA), a region characterised by monopolies and lack of market contestability. As this column explains, there are many questions about the extent of anti-competitive barriers facing new market entrants in the region. What’s more, MENA’s weak overall performance on competition is likely to be hindering economic growth and the path towards structural transformation.

The Egyptian economy is still not creating good jobs

Growth in Egypt has recovered substantially since the downturn following the global financial crisis and the political instability following the 2011 revolution – but what has happened to jobs? This column reports the results on employment conditions from just released data in the 2018 wave of the Egypt Labor Market Panel Survey.

How Egyptian households cope with shocks: new evidence

Managing risks and reducing vulnerability to economic, social, environmental and health shocks enhances the wellbeing of households and encourages investment in human capital. This column explores the nature of shocks experienced by Egyptian households as well as the coping mechanisms that they use. It also examines the relationship between such risks and job formality and health status.

The future of Egypt’s population: opportunities and challenges

Egypt’s potential labour supply depends on the growth and changing composition of its working-age population. This column reports the latest data on labour supply and fertility rates, concluding that the country has a window of opportunity with reduced demographic pressures to try to address longstanding structural challenges for the labour market.

Egypt’s labour market: facts and prospects

An ERF policy conference on the Egyptian labour market in late October 2019 focused on gender and economic vulnerability. This column summarises the key takeaways from the event.

An appeal for Sudan’s future

Sudan today is on a knife-edge: it can evolve toward peace and democracy – or spiral into instability and violence. As this Project Syndicate column argues, vital and timely international assistance can make the difference between success and failure for the new government.

Domestic demand and competition: a new development paradigm for MENA

A lack of competition in domestic and regional markets is holding back development in the Middle East and North Africa. This column argues that the region and the international community must ensure that barriers to market entry and exit are eliminated, and that independent regulatory bodies at the national and regional levels help to promote domestic demand as the main engine for sustainable and inclusive growth.