Money matters – Evidence from a large-scale randomized field experiment with vouchers for adult training

Author(s):

Stefan WolterDolores Messer

Conference:

ECER 2009

Network:

2. Vocational Education and Training (VETNET)

Format:

Paper

Session Information

02 SES 04 A, VET and FE: Economic, Political and Organisational Aspects

Paper Session

Time:

2009-09-28

16:00-17:30

Room:

HG, HS 23

Chair:

Lorenz Lassnigg

Contribution

In most European countries, public subsidies encourage adult people to engage in continuous work-related training. Although a huge variety of instruments are used to stimulate continuous education, almost none of these instruments are thoroughly evaluated. The proposed paper makes would make use of information gathered in a unique large scale randomized field trial, specifically set up to analyse the mechanisms and the usefulness of vouchers to stimulate the engagement of adults in continuous education. The experiment was “blind”, following the so-called “gold-standard” of evaluation instruments, but very rarely achieved in social experiments. In the experiment a randomly selected group of participants (2’400 people) in the Swiss Labour Force Survey (SLFS) was given vouchers to be used for adult education. The vouchers were given to them as a gift for their regular participation in the survey. The rest of the participants in the survey (some 14’000 people), used as the control group, did not receive vouchers. Both groups, the treatment and the control group were not informed about the experiment and no information about it was disclosed to the public. The experimental group was then randomly divided in six sub-groups, according to two parameters of the vouchers, nominal value and counseling. All participants of the SLFS were surveyed before the experiment started and at the point of time when the validity of the vouchers had expired. The first results in a nutshell are that the voucher had a significant causal impact on participation in training modules. Nevertheless, the increase was partially offset by a dead-weight loss in excess of fifty percent. There was significant price-sensitivity of demand and the vouchers of the lowest nominal value, although used, did not have any causal impact on demand. People with tertiary degrees used the vouchers more frequently than other people but the windfall gain in this group was almost ninety percent. The offer for free counseling was also used but had also no causal impact on the redemption rates of the vouchers. Contrary to commonly shared beliefs among practitioners and policy-makers, money mattered much more than counseling. Finally an analysis of the type and nature of courses taken by people with vouchers shows that the demand is not just more of the same but that there was a pattern that is different than the one observed in the control group.

Method

Field experiment combined with data from the annual labour force survey: econometric analyses of the results

Expected Outcomes

Of the experimental outcomes, the following three are particularly striking: Firstly, the vouchers raised adult education participation in the experimental group by approximately 20%. This causal effect could not be expected a priori, and therefore shows that adult education and training activities can in fact be stimulated by offering money. It is also worth noting in this connection that the very realistically designed advice option had no significant impact on voucher redemption. Secondly, voucher demand was price-sensitive, i.e., the face value of the voucher is a determining factor. Thirdly, the voucher system raised the adult education participation of individuals with low educational attainment and those with no active history of involvement in adult education. The experiment also discloses a definite positive correlation between the amount of windfall gain and the voucher recipient’s educational attainment level.

References

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Author Information

Stefan Wolter

Swiss Coordination Centre for Research in Education

Aarau

Dolores Messer

University of Bern

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