Skill Training Programs and Employment Prospects in Bihar: A Study in Darbhanga District

In a number of countries, youth unemployment is a pressing economic and political concern. In the Indian context 54% of the country‟s population of 1.21 billion is below 25 years of age and faces a high rate of (disguised) unemployment. To augment youth employment, the Government of India has launched a number of skills training programs in several states of India. This thesis deals with participation in and the impact of one of these programs (DDU-JKY) located in Bihar, one of India‟s poorest states. Participation in these programs is based on voluntary self-selection by eligible candidates and it is not always clear whether those for whom the programs are intended are actually able to access such programs. To examine this issue, I estimate what determines participation in these training programs. Furthermore, I also estimate the impact of participating in training programs on employment and earnings of participants as compared to nonparticipants. The study is based on a survey of 526 respondents conducted in July and August 2016 in Darbhanga District in Bihar. All respondents were residents of Darbhanga district and had applied for 3 months training program implemented under DDU-GKY. My analysis shows that participation in training programs significantly depends on program awareness of the respondents. Aware individuals are 15 percentage points more likely to participate in the programs. Expected future earnings perceived by the individuals from the training programs are crucial determinant of program participation. 1% increase in expected monthly earnings increases programme uptake by 5%. Furthermore, expectation of future earning varies significantly with program awareness. Increase in program awareness increases monthly expected earnings by Rs. 2600 to Rs.2900. Thus, increasing program awareness is essential to increase program uptake by target population. Participation in training programs was not identified to have impact on outcome indicators. One reason was lack of job opportunities in local market but equally important were hindrances to job market entry posed by existing social structure prevalent in the area.