In a number of countries, youth unemployment is a pressing concern. In India, 54% of the country’s population is below the age of 25 and faces a high rate of (disguised) unemployment. To augment youth employment, the Government of India has launched a number of skills training programs. This paper deals with participation in and the impact of one of these programs [Deen Dayal Upadhyaya Grameen Kaushal Yojana (DDUGKY)] located in rural Bihar, one of India’s poorest states. The analysis is based on data collected in mid-2016 and compares trained participants with non-participants who applied for the scheme but eventually did not attend. We find that the training program squarely reaches the intended target group—rural poor youth. Initially, the program leads to a 29 percentage point increase in the employment rate of the trained graduates. However, 2–6 months after the training, the employment effect of the program drops to zero. A third of the placed graduates leave their jobs due to caste-based discrimination, and another third leave due to a mismatch between the salaries offered and their living costs. The upshot is that while the training program enhances job market prospects, other labor market factors undo the positive effects.

Additional Metadata
Keywords Bihar, India, Skills training, Youth unemployment
Persistent URL dx.doi.org/10.1007/s41027-019-00167-8, hdl.handle.net/1765/118097
Journal Indian Journal of Labour Economics
Citation
Chakravorty, B. (Bhaskar), & Bedi, A.S. (2019). Skills Training and Employment Outcomes in Rural Bihar. Indian Journal of Labour Economics. doi:10.1007/s41027-019-00167-8