# 1. **Introduction**

Active labor market programs (ALMPs) aim to increase the employment, employability and income of participants. They have a decidedly mixed track record of raising employment and earnings, and tend to have modest impacts, especially in the short run.<sup>2</sup> Particular types of programs can be effective, however, when they are well‐tailored to local labor markets and implemented effectively.<sup>3</sup> In recent years, there has been greater interest in the potential for ALMPS to offer non‐pecuniary benefits to young participants, such as a reduction in risky behavior and criminal activity. In contexts where unemployment and crime are both high, ALMPs have the potential to improve social as well as economic outcomes. However, little evidence exists regarding the impacts of ALMPS on social indicators such as crime, especially in fragile contexts.<sup>4</sup> This study seeks to fill the gap using unique data collected in Port Moresby, the capital city of Papua New Guinea (PNG).

Port Moresby is a particularly interesting context to study the social effects of active labor market programs because unemployment and crime are rampant, as the creation of formal jobs and other livelihood opportunities have failed to match rapid population growth. A recent report estimated that the homicide rate in the capital city of Port Moresby was 33 per 100,000 persons in 2010, which would rank among the top 50 cities in the world today (World Bank, 2014). This is not surprising: Among young people aged 15 to 24 in Port Moresby, 29 percent were estimated to live on less than $3.10 per day in 2009/10, and 31 percent were unemployed.

To invest in youth and promote their social inclusion, the National Capital District Commission (NCDC) has, since September 2012, implemented the Urban Youth Employment Project (UYEP) in Port Moresby.<sup>5</sup> The project seeks to improve employment opportunities, earnings potential and living standards of urban youth by providing skills trainings and short‐term placement into employment. It is one of the very few programs that invest in PNG’s marginalized youth, and is the main public intervention attempting to address the economic and social marginalization of unemployed youth. The program successfully targeted youths involved in criminal activity, as 57% of UYEP participants report being a victim of crime, and 46% report having been involved in a criminal activity, at least once in their lives.

The UYEP program consists of two main components. The first component is the Youth Job Corps (YJC), which targets less educated youth and provides short‐term (about 40 days, or two months) _public works_ employment, mostly related to maintaining/cleaning roads. The second component, the Skills Development and Employment Scheme (SDES) targets more educated youth and provides classroom Pre‐ Employment Training (PET) of 1 month followed by on‐the‐job training (OJT) /employment (of 5 months) with employers in various sectors. Both groups of youth are required to participate in a one‐week (40

> 2 Recent reviews of ALMPs include Card, Kluve, and Weber (2015), Brown and Koettle (2015), and Callendo and Schmidt (2015).

> 3 See, for example, Sarvimäki and Hämäläinen (2016), and Attanasio, et al (2011).

> 4 Ralston and Blattman, 2015.

> 5 The implementation of the Project has been taking place under technical assistance from the World Bank.

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