Development Dialogue: Are vocational training programs effective?

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Vocational training programs are designed to boost employment in low- and middle-income countries – but often they fall short. In the fourth in our series of Development Dialogues, we examine the real impact of vocational training programs in low- and middle-income countries. Our guests take on pressing questions around evidence, expectations, market realities, and coordination challenges in designing skills-based interventions for employment:

• Oriana Bandiera is the Sir Anthony Atkinson Professor of Economics at the London School of Economics, where she also directs the Hub for Equal Representation. Her research explores how economic policies and institutions shape labor markets and development outcomes. Bandiera delivered the 34th Simon Kuznets Memorial Lecture on the topic of “Development and the Organization of Labor,” hosted by EGC. 
• Stefano Caria is a Professor of Economics at the University of Warwick. He uses experimental methods to investigate how to make labor markets work better for the poor. Caria served as senior editor for a VoxDevLit on Barriers to Search and Hiring in Urban Labour Markets.
• Munshi Sulaiman is the Director of Research at the BRAC Institute of Governance and Development and a Professor in the Master of Development Studies program at BRAC University. He brings a unique lens from decades of applied work in organizations like BRAC and Save the Children, focusing on labor markets, poverty, and the practical realities of designing and scaling programs.

Development Dialogues, a collaboration between EGC and VoxDev, facilitates direct conversations between researchers and policy actors on pressing development issues. It builds on the VoxDevTalks podcast and Voices in Development, a podcast from EGC exploring issues related to sustainable development and economic justice in low- and middle-income countries.

Vocational training has long been seen as a solution to unemployment and poverty, but the episode opens by dismantling the idea that it is a silver bullet.

“From the evidence point of view, vocational training is a perfect example of a mixed bag.” - Oriana Bandiera

While some programs show promising results, the overall impact is far from transformational.

“Maybe depending on which meta-analysis you look at, we are talking of 5, 6, 7, percentage points increases in employment. That’s sizable, but by no means is the kind of full solution to the employment problem the governments in low- and middle-income countries are looking for.” - Stefano Caria

This highlights a lack of clarity around the underlying issues training aims to address.

A recurring theme in the conversation is the disconnect between training and actual job opportunities. This has been the case for the Rohingya refugees in Bangladesh.

“We are doing lots of training, but of course, they don't have the rights to work. So, in some ways, there is no skill that they can market.” - Munshi Sulaiman

In these settings, the focus on enrollment numbers often overlooks deeper labor market needs.

Additionally, the sectors targeted by training are often outdated or unimaginative – such as tailoring, welding, and carpentry – neglecting critical job markets including care work and green economy.   

The conversation reveals that training alone is not enough without tackling cost, selection bias, time constraints, and demand-side barriers. For example, a childcare voucher trial in Egypt ultimately had little effect on women’s employment. This was due, in part, to limited nursery hours and unattractive job prospects for mothers.

Bandiera and Caria share a BRAC trial that explored whether offering training on a ‘pay if employed’ basis would work.

“Take-up was very low, and those who did do the training didn't benefit at all.” - Oriana Bandiera 

Donors often favor vocational training, not necessarily because it is the most effective, but because it is easy to track and justify. 

“The cost does play some role, but some of the training program I have seen cost, often as much as the ultra-poor graduation program... sometimes even $1,000 for six months of training on welding.” - Munshi Sulaiman 

Interventions such as job search support and certification, however, offer cheaper, effective alternatives to vocational training programs. 

“Now we are talking... not $400 per participant, but maybe $14 per participant... And at least in terms of impacts on employment... those interventions are often successful.” - Stefano Caria

A critical point raised by the guests is the unequal impact of vocational training. 

“It might look unequal to focus on younger men without children from richer families, but that's not wasted money. You always have to think about the counterfactual. If the counterfactual is offering training to people who don't benefit, then it's better to just focus on those who benefit.” - Oriana Bandiera

Training often assumes a baseline level of human capital, which not all participants have. 

“Training programs assume a certain level of starting human capital and build on it…. Some of these are related to the opportunity cost of time, how much time you've got available... how much time you have to focus.” - Stefano Caria

Absenteeism, childcare, and digital literacy also present barriers.

An important takeaway is the need to go beyond individual-level interventions and aim for market-level change. 

“If many people get trained, maybe a new firm will open... all those big externalities are missed out because all the evidence we have is within a market.” - Oriana Bandiera

The discussion highlights the need to match training with real labor demand, especially in emerging sectors such as childcare and solar energy. 

For example, Morocco has invested heavily in solar energy – opening what may be the largest solar power plant in the world – but the training sector has not kept pace.

This conversation calls for a serious reexamination of vocational training’s role in development.

The panel collectively urges donors and practitioners to shift from a short-term, number-focused mindset to one that prioritizes long-term outcomes, equity, and real-world job alignment. 

“Otherwise, we dismiss treatments that could be perfectly valid, like vocational training in a new skill, simply because we treat too few people for that to generate a market.” - Oriana Bandiera