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We use a randomized experiment to compare a workforce training program tocash transfers in Rwanda. Conducted in a sample of poor and underemployedyouth, this study measures the impact of the training program not only relativeto a control group but relative to the counterfactual of simply disbursing thecost of the program directly to beneficiaries. While the training program wassuccessful in improving a number of core outcomes (productive hours, assets,savings, and subjective well-being), cost-equivalent cash transfers move allthese outcomes as well as consumption, income, and wealth. In the head-to-headcosting comparison cash proves superior across a number of economic outcomes,while training outperforms cash only in the production of business knowledge.We find little evidence of complementarity between human and physical capitalinterventions, and no signs of heterogeneity or spillover effects.

Using Household Grants to Benchmark the Cost Effectiveness of a USAID Workforce Readiness Program