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

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.