- _Supply‐side interventions_ are designed to improve the characteristics of actual and prospective labor force participants in order to raise earnings (including helping them to enter the labor force or exit unemployment). These interventions include skills training: in vocational and technical skills, in business skills for self‐employment, and in noncognitive transferrable skills (called life or employability skills). They may also include counseling and mentoring services for either self‐ or wage‐employment, and transportation subsidies to help youth search for jobs. Although not strictly a supply‐side intervention, matching services to reduce information deficits and frictions by linking youth to job vacancies are usually put in this classification.

- _Business climate interventions_ are designed to improve factors outside the control of the labor force participants that affect labor demand and productivity. In the case of wage employment, interventions may benefit firms in order to affect their employment decisions—for example, by raising the profitability of firms and helping them to expand (through management training, mentoring, and incubation services); increasing access to finance; reducing firm taxation; investing in infrastructure to support firm entry and growth; and providing employment subsidies to encourage firms to hire youth.<sup>7</sup> In the case of self‐employment, business climate interventions may benefit actual or potential self‐employed business owners by affecting choice of activity, earnings potential, and risk.

Different types of youth interventions will have different theories of change. For example:

- Supply‐side interventions assume that _the business climate is adequate and creating jobs,_ but youth are not qualified enough for them _._ In the absence of the intervention, the jobs would go unfilled, or the potential employer would wait until a qualified applicant appears. This means that labor demand intersects labor supply at the upward sloping portion of the supply curve.

- Business climate interventions assume that _the supply of youth_ with the characteristics needed to succeed in employment is adequate, but the business climate needs to improve to generate more and better opportunities for youth. These interventions try to move out the demand curve along the supply curve.

Most youth employment interventions are supply side ones, and of these, almost all involve some kind of training.<sup>8</sup> As discussed in Section 2, the assumptions behind supply‐side interventions for wage employment are certainly open to question in low‐income countries.

Because multiple constraints can be involved, youth employment issues are often addressed by several interventions. This complexity often makes program evaluation difficult, especially impact evaluation, as it is not clear which component was most effective in alleviating which constraint, and what might be the most cost‐effective way to move forward.

A critical challenge in experimental research on employment interventions is measuring displacement. Most studies have not even tried to do so. Although displacement can be difficult to measure in an impact evaluation, a few have been able to do it. A Ugandan study measured displacement by randomizing the firms which participated in the project and received vocational training graduates or interns (Alfonsi et al., 2017). This study did find complete displacement. A study in France measured displacement effects by varying the intensity of the treatment across areas (Crepon et al., 2012). While the study did find that the employment program helped treated individuals within the treatment area find a job “slightly faster” than those who were not in the study, when the authors compared areas where most youth were allowed to participate (treated) with areas where few youth were allowed to

> 7 Most firm‐level interventions aim to increase total employment, not youth employment, a point discussed below.

> 8 82 percent of the interventions listed in the ILO’s Youth Employment Program Inventory are training programs.

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