Wrong Fit, Missed Gains? Evidence from Skill Training Choices in Liberia

Abstract

Young job seekers commonly misperceive training returns; we test whether these beliefs misalign choices between two widely offered tracks—job-skills and business-skills training for young women in Liberia. We reassign 30 percent of the applicants from an oversubscribed job-skills program to business-skills and compare them to applicants who remain in their preferred track. In the short run, reassigned applicants outperform, with employment and earnings gains two to three times larger. By the medium run, most averages converge but mask sharp heterogeneity: some women gain substantially, others lose. Elicited expectations are consistent with misaligned track choices and suggest belief distortions.