analysis.<sup>28</sup> For comparison with university education, annual per-student per-unit public costs are used.<sup>29</sup> Based on the assumption that in-person company training lasts over a year of the DTS OJT period, the training cost is assumed to be approximately 25 percent of the minimum wage earned by HS graduates ages 15–19.

The EIRR analysis focuses on the three options available after HS completion. Any investments prior to that stage are not included. This strategy necessitates the calculations of benefits and costs net of those available to HS graduates who work after graduation. Based on the estimates of returns to the DTS, two scenarios are presented for the DTS, which include (a) those who were achievers of low grades (who had −1 standard deviation in the standardized general average HS score) and (b) those who were achievers of higher grades (who had +1 standard deviation in the standardized general average HS score).

The estimated EIRR for the DTS among lower HS academic performers is the highest at 23.3 percent and 20.5 percent in public and private TVIs respectively (Figure 9). The advantage of the DTS over the RPs is mainly attributed to the DTS premium in the labor market. A reduction of the premium may be assumed when the government successfully scales up the program. These results highlight that the EIRR among lower HS academic performers is comparable to other options.

# VII. Conclusion

This report focused on the DTS as one of various vocational training programs which offer plenty of opportunity for on-the-job training and work experience in the Philippines. Completing vocational training in the DTS garners significant benefits in the Philippines’ labor market, particularly among those who did not demonstrate strong academic performance during basic education. The magnitude of the program’s impact is likely to increase with the intensity of the incompany training component or OJT, which provides corroborating evidence that practical skill development is a critical factor for success. Furthermore, a case study comparing the cost-benefit of the DTS with other options suggests potentially high returns for individuals who struggled academically prior to the DTS programs.

Practical training through OJT can be a key policy solution for reducing the rate of youth unemployment in the Philippines, particularly after the completion of vocational training or HS graduation. While the conclusions of the study are drawn through reasonable data analysis, due to methodological limitations, the results are conditional on graduation from vocational programs. The study also did not analyze the characteristics of those who drop out from vocational programs. Further investigation may be necessary in order to maximize the efficiency of practical training opportunities.

The study highlights the importance of career counseling to support students in their transition from school to employment. Improved counseling support can help students identify a path to skill

> 28 Without the shadow exchange rate factor adjustment, the per-training costs in the DTS and RPs in a large, public TVI are PHP 5,455 and PHP 6,619, while the same costs in a large, private TVI are PHP 19,490 and PHP 24,351, respectively.

> 29 Tullao et al., 2014. The study employed the sample average of 108 state and local universities. The average of 40 units per student translates into PHP 30,573 per year .

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