Cost-Benefit Analysis of Vocational Training as an Active Labor Market Measure

Abstract

Cost-benefit analysis is an essential tool for eval­uating public policies, providing decision-makers with a solid foundation for implementing efficient solutions. The purpose of this article is to assess the effectiveness of vocational training programs as an active labor market measure, using a cost-ben­efit analysis methodology developed by the author. The methodology was developed and applied with­in the ReCONECT project – Adapting to Change: Integrated Mechanism for Anticipation, Monitoring, and Evaluation of the Labor Market and Education (2021-2022), using data from the General Registry of Employees (REVISAL) and the National Employment Agency (NEA). The analysis includes monitoring par­ticipants’ trajectories, evaluating employment rates at the end of the training programs and at 3, 6, 9, and 12 months post-completion, as well as identifying and monetizing direct costs and benefits. Addition­ally, the study analyzes regional disparities in pro­gram efficiency. Findings indicate that, on average, the measure becomes economically efficient six months after course completion. The significant dif­ferences across development regions highlight the importance of tailoring programs to local contexts and ensuring the efficient use of public resources in employment policy.