employment rate of 65 percent was assumed for HS graduates and those who had vocational training. If employed, it was assumed that a total of 25 days were worked each month for a period of five years in each age range. An employment rate of 100 percent was assumed for college graduates.

The linear regression method renders insignificant estimates of returns to the DTS when controlling for TVIs and enrollment year, but a significant and negative relationship was found between the general average HS grade and the DTS when the same controls were applied. While it is not possible to compute the EIRR in the former case, this may be attributed to: (a) those students who were weak academic performers (with a −1 standard deviation in the standardized general average HS score) and (b) those students who were strong academic performers (with a +1 standard deviation in the standardized general average HS score).

The cost structure of the DTS program is defined by three components: (a) the opportunity cost of time spent by trainees, (b) institutional costs incurred by training institutions (TVIs), and (c) training costs by firms that accept DTS trainees. The opportunity cost of time to complete vocational training or college education is based on the average daily wages of HS graduates in the age group 15–19. For both the RP and DTS trainees, one year is assumed for their foregone earnings,<sup>27</sup> while four years of foregone earnings are assumed for college students. Since the opportunity cost is based on the earnings of HS graduates who work after graduation, all assumptions are anchored to the HS completion level. The tracking survey data sample reveals average monthly earnings of PHP 11,408, which is an average including both the DTS and RP graduates. A daily wage of PHP 456 is derived if the graduates work for 25 days per month. This value falls between the average daily wages available to HS graduates ages 20-40 with vocational training, which confirms that the average daily earnings from the impact evaluation sample resemble that of the LFS.

Information collected from the sample TVIs is used to evaluate the costs incurred by training institutions. Although the survey attempted to collect cost data from graduates of nine TVIs in Region 3, Region 4A, and the NCR, institutional cost data for only two TVIs were found to be complete and reliable after careful data validation (see Table 1.7 and Table 1.8 in the annex). Both institutions are similar in size and are located in the Greater Manila Area, which constitutes the largest industrial zone covering Metro Manila as well as parts of the neighboring provinces. They offer two distinct institutional environments as one is private and the other is public. The distinction between public and private institutions can be arbitrary due to the small sample of this study, but the specified difference provides a sense of variation in the cost structure among the DTS-implementing institutions.

The DTS program is less costly on average for TVIs, but the cost is higher for the private institution. While actual costs per trainee changed yearly due to fluctuations in the number of enrolled trainees, the average of per-trainee institutional cost from 2010–2014 was used in the

> 27 The DTS trainees have OJT for one year. They receive 75 percent of the minimum wage during the DTS OJT period, but since the wage payment is a transfer from firms to trainees this part is cancelled out. Similarly, enrollment fees are cancelled out between beneficiaries (trainees and students) and the TVIs.

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