The Impact of the Mexican Training Program for Unemployed Workers on Re-employment Dynamics and on Earnings

For years, the Mexican government has funded and administered a training program targeted at unemployed workers. This program, called PROBECAT (the Spanish acronym for Programa de Becas de Capacitacion para Desempleados), was initially launched to mitigate the impact on the labor market of the 1982 debt crisis; it was then continued in view of the major opening and deregulation of the economy during the last half of the eighties. After a yearly registration of less than 50 000 persons up until 1994, it was expanded eightfold when the country entered a major recession in 1995. During the last half of the 1990s, PROBECAT continued to be the Mexican government’s most important policy to improve the productivity and employability of the unemployed1 . Training by PROBECAT is provided by institutions which di¤er in their degree of autonomy with respect to the central government, This paper presents the results of a research project coordinated by James Heckman (U. of Chicago) and Gustavo Marques (IDB, Washington) and sponsored by the Inter-American Development Bank research network project initiative “Evaluating Training Policies in Latin America and the Caribbean Countries”. Research assistance from Rafael Perez Abreu, Arturo Gonzalez Izquierdo and Gonzalo Rangel is acknowledged, as well as the helpful comments from the coordinators of this project and from Petra Todd and Je¤rey Smith. 1A record level of 580 000 trainees attended PROBECAT programs in the year 2000 –a …gure equivalent to 24% of the average number of people registered as unemployed during the …rst quarter of that year.