Abstract
•Activation measures are often included in cash transfer programs in Latin America.•Seguro de Capacitación y Empleo affects positively the job quality of participants.•The program increases the prospects of having a formal job and raises hourly wages.•Positive impacts are more likely among the younger beneficiaries.•The program does not improve labor market outcomes of women.
This paper examines the impact of the program Seguro de Capacitación y Empleo (SCE) implemented to provide support in skills upgrading, job seeking, and job placement to eligible beneficiaries of the Argentinian conditional cash transfer program Plan Jefes. The SCE is an example of a growing trend observed in Latin America, where labor activation components have been increasingly included into cash transfers programs to support beneficiaries in finding more stable income opportunities. Despite this growing trend, not enough is known regarding the effectiveness of these components, especially on job quality. In this context, this paper sheds light on whether the provision of a comprehensive package of active labor market measures contributes to a successful labor market integration of cash transfers beneficiaries. Taking advantage of the panel structure of the Permanent Household Survey and exploiting the time variation in the assignment of the program as identification strategy, we apply difference-in-difference estimators to measure the impact on a number of labor market indicators. We find that the program affects positively the job quality of participants by increasing the probability of having a formal job and raising hourly wages. Moreover, the intervention is associated with a lower probability of having a low-paid job and working an excessive number of hours. These effects are, however, not homogeneous across all groups of participants. While the program is more successful among the younger beneficiaries, it does not contribute to an improvement in the labor market conditions of female beneficiaries, who in fact are the majority of SCE participants. Our results suggest that reducing dependency on monetary transfers through programs, such as the SCE, that are rich in activation components is beneficial for participants’ labor market trajectories and therefore, it constitutes a satisfactory exit strategy to more universal cash transfer programs.