Give employees on-the-job training or cash handouts? A Rwandan study
Cash handouts proved to be the most effective way of improving outcomes for young underemployed people.
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- Dec 17, 2020
Youth unemployment was a global concern even before the COVID-19 pandemic hit. Now it threatens to become a crisis as millions worldwide lose their jobs, felt significantly more in poorer countries. Post-pandemic, Should developing countries use training or cash grants to combat youth unemployment?
A new Rwanda-based study, backed by the United States Agency for International Development, compared investment in training with the benefits of giving people cash. The results? Cash handouts proved to be the most effective way of improving outcomes for young underemployed people in Rwanda. It stimulated entrepreneurialism, well-being and productivity. The study also established the optimum funding ceiling and floor between one hundred and fifty US Dollars and four hundred US Dollars. Workforce training outperformed cash only in creating business knowledge.
