To investigate the differential impact by age, we divided the sub‐sample into those older and younger than 24 years old (the median of the age distribution). While no differential effect by age was found in the Mombasa sub‐sample, there is evidence that the program had a more significant impact on older males (those over 24 years old) than younger males in terms of their earnings from wage employment.

# **VIII. Cost–Benefit Analysis**

It is important to look not only at the impact of the program but also at the costs of the different program components to assess the performance of the life skills training and of the full program and to draw conclusions about the program’s sustainability and the potential for scaling it up. Cost‐ benefit analysis is crucial to evaluation the potential policy impact of the study and to inform the Government of Kenya about the most efficient ways to allocate resources. Unfortunately, the design of the impact evaluation did not make it possible for us to disentangle the impact of each component of the KYEP program. It was designed to assess the impact of the full program and of the life skills training alone (which we found had had an insignificant impact). As such, a cost‐benefit analysis could only be carried out on the program as a whole.

Our analysis of costs took into account service delivery costs and the recurrent administrative costs (including staff and operating overhead costs) that could be attributed to cycle 2 only. To quantify the administrative costs, we made assumptions about the percentage of staff time and overhead expenses (transport, telephone, and workshops) attributable to cycle 2.<sup>17</sup> Administrative data on beneficiaries’ attendance, their completion of each of the program components, and reports on the stipends paid to trainees and the compensation paid to employers were gathered, monitored, and reported in a new program management information system developed within KEPSA.

By comparing the shares of the weekly service delivery costs per beneficiary among the different program components, internship costs accounted for 26 percent of total training and internship delivery costs, sector‐specific training accounted for about 23 percent, life skills training for 21 percent, core business training for 17 percent, and entrepreneurship training and stipends for about 14 percent.

Table 14 presents the unit costs (per participant) of the program by component, including administrative costs. The total cost per beneficiary was about KES 84,000 (US$1,000) excluding administrative costs and about KES 97,000 (US$1,150) including administrative costs.<sup>18</sup> This unit cost 17 Operating overhead costs were approximately 50 percent of total 2012/2013 operating costs and included 100 percent of the amounts paid for the impact evaluation, the beneficiary assessment, and the M&E consultancies. The staff costs attributable to cycle 2 included 100 percent of staff costs as of May to September 2012, 50 percent of total staff costs between March and April 2012, and 50 percent of total staff costs between October 2012 and May 2013.

18We calculated the unit costs for each type of training based on the number of participants, defined as those who attended at least one day of training. We calculated the stipends and employers fees per participant based on the number of interns who started internships. We calculated the staff and overhead costs per participant based on the total number of candidates who confirmed their participation in cycle 2 and attended at least one day of life skills training (2,431), including the additional 300 experimental candidates added to cycle 2 to test the life skills training component alone.

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