Financial life-skills training and labor market outcomes in Indonesia

Abstract

This study examines the relationship between a United States Agency for International Development financial life skills training program for poor and vulnerable youth in Indonesia on labor market outcomes two years following the training. Longitudinal results indicate that self-efficacy and financial behaviors improved from pre-training to two years after the training, and a logistic regression analysis finds significant correlations between self-efficacy and financial behaviors with finding new or better employment. Because financial literacy education can be associated with improved financial behaviors, and soft skills acquisition can be associated with improved self-efficacy, we conclude that the training program led indirectly to new or better employment outcomes for participants. Reinforcing this result, between 92 % and 97 % of the trained youth attributed the training program to their observed improvements in work performance and/or to new or better employment opportunities.