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Document of The World Bank FOR OFFICIAL USE ONLY Report No. 16126 PERFORMANCE AUDIT REPORT MEXICO SECOND TECHNICAL TRAINING PROJECT (LOAN 2559-ME) AND MANPOWER TRAINING PROJECT (LOAN 2876-ME) November 15, 1996 OperationsEvaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

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Page 1: World Bank Documentdocuments.worldbank.org/curated/en/762811493240899409/pdf/mul… · Second Technical Training Project (Loan 2559-ME) Manpower Training Project (Loan 2876-ME) Attached

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 16126

PERFORMANCE AUDIT REPORT

MEXICO

SECOND TECHNICAL TRAINING PROJECT(LOAN 2559-ME)

AND

MANPOWER TRAINING PROJECT(LOAN 2876-ME)

November 15, 1996

Operations Evaluation Department

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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Currency Equivalents, New Pesos per US$ (annual averages)

1988 2.28 1992 3.121989 2.64 1993 3.301990 2.95 1994 3.411991 3.07 1995 7.40

Abbreviations and Acronyms

CAST Centros de Asistencia de Servicios Tecnol6gicos(Centers for Assistance in Technological Services)

CECATI Centros de Capacitaci6n T6cnica(Centers of Technical Training)

CIMO Programa de Capacitaci6n Industrial de Mano de Obra(Industrial Worker Training Program)

CONALEP Colegio Nacional de Educaci6n Profesional(National College of Professional Education

IBRD International Bank of Reconstruction and Development (World Bank)ICR Implementation Completion ReportNAFIN Compaiia Nacional Financiera

(National Financing Company)OED Operations Evaluation DepartmentPAR Performance Audit ReportPCR Project Completion ReportPROBECAT Programa de Becas de Capacitaci6n para Trabajadores Desempleados

Labor Retraining ProgramSAR Staff Appraisal ReportSTPS Secretaria de Trabajo y de Previsi6n Social

(Secretariat of Labor and Social Welfare)WID Women in Development

Fiscal Year

Government: January 1 - December 31

Director-General, Operations Evaluation : Mr. Robert PicciottoDirector, Operations Evaluation Dept. : Mr. Francisco Aguirre-SacasaDivision Chief, Agriculture and Human Development Mr. Roger SladeTask Manager : Ms. Helen Abadzi

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FOR OFFICIAL USE ONLYThe World Bank

Washington, D.C. 20433U.SA

Office of the Director-GeneralOperations Evaluation

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Performance Audit Report on MexicoSecond Technical Training Project (Loan 2559-ME)Manpower Training Project (Loan 2876-ME)

Attached is the Performance Audit Report prepared by the Operations Evaluation Department(OED) on the Mexico Second Technical Training project (Loan 2259-ME for US$81 million equivalent)approved in 1985 and the Mexico Manpower Training project (Loan 2876-ME for US$80 million)approved in 1987. Comments received from the borrower are reproduced as Annex 4. OED responsesare contained in Annex 5.

The projects were designed to improve the quality and increase the number of skilled workersand technicians at a time of severe economic crisis in Mexico. The projects financed institutionaldevelopment, curriculum and materials development, and training or retraining scholarships for theunemployed. Scholarships were to be awarded in accordance with eligibility criteria set out in the StaffAppraisal Report. A focus on the lower-middle class of urban areas rather than the neglected ruralpopulations was due to the government's reluctance to borrow for the social sectors.

The outcome of both projects is rated as satisfactory, institutional development as substantial,and sustainability as likely. Nevertheless, Bank task management and supervision teams emphasized theeconomic aspects of the projects and paid less attention to instructional, poverty, women's andindigenous people's issues. As a result, the audit found that (a) in allocating scholarships financed underthe project employers did not provide fair access to women; and (b) too little attention was given to thelearning needs of the less educated adults selected for training.

The Bank's insistence on social-sector interventions has paid off, and Mexico's social sectorstrategy, especially the extent to which it is targeted on the poor, has vastly improved in recent years.Nevertheless, to ensure that the full benefits flow from current and future vocational education projectsin Mexico the following steps are needed:

(a) Allocation criteria for training scholarships should provide equitable access towomen. Bank expertise on gender should be used to help Mexico introduceinnovative approaches that have worked elsewhere (such as setting asidescholarships for women in stereotypically male occupations).

(b) The short-term training programs need expert review with the aim ofmaximizing the probability that adults with limited education will be able tolearn the needed skills.

This document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed without World Bank authorization.

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(c) Specialized expertise is needed to develop action plans for the inclusion ofindigenous groups, who are especially difficult to reach in the training programs.

The audit also raises two broad and important lessons for the Bank:

(a) Projects must be carefully screened and reviewed at entry and during supervision to minimize

the possibility of inequitable provision of services to women and the poor.

(b) Decisions to finance interventions that are targeted on the non-poor must be carefully weighed,especially if the borrower is unwilling to also undertake welfare enhancing measures targeted tothe poor.

Attachment

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FOR OFFICIAL USE ONLY

Contents

Preface .......................................................................................................................................... 3

Basic Data Sheet-Second Technical Training Project (Loan 2559-ME).........................5

Basic Data Sheet-Manpower Training Project (Loan 2876-ME)..... .................. 9

EvaluationSummary ............................................................................................................... 13

1. Introduction ......................................................................................................................... 21Background...... . .............................................. 21Previous and Subsequent Projects .. .......................................................... 22

2. Second Technical Training Project (CONALEP II)........................24Project Objectives and Components...................................................................... 24Implementation Experience.................................................................................. 24Physical Facilities.................................................................................................... 25Curricula and Materials......................................................................................... 26Staff Development and Instructional Delivery.......................................................27Student Selection and Training-Social and Employment Issues.......................... 27G ender .................................................. ................................................. 28Benefits and Risks.............................................. ......................................... 29Results ........................ ........................................... 29Institutional Development ...... ....................................................... 30Sustainability ....... ..... ...................................... ................................. 30Recommendations ......................................... 30

3. Manpower Training Project ........................................................................................ 32Objectives and Description ................................................................................... 32Implementation .. .................................................................................... 33Employment Services and Labor Retraining ......................................................... 33

The demonstration in-service teaching and productivity component (CIMO) ... 34STPS Institutional Strengthening Component ...................................................... 35Training Institutions Upgrading Component ......................................................... 36Instructional Delivery............................................................................................ 36Attention to Rural Areas.......................................................................................... 37G ender Issues.............................................. ............................................ 38Benefits and Risks................................................................................................. 39Outcomes ......... ................................................................................ 40Sustainability ............ ............................................................... 42

This report was prepared by Helen Abadzi (Evaluation Officer), who audited the project inMarch 1996. Pilar Barquero provided administrative assistance.

This document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed widhout World Bank authorization.

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Institutional Development..................................................................................... 42Recommendations Specific to STPS Operations ................................................. 42

4. General Finding, Issues and Lessons .................................... 44Borrower Performance......................................................................................... 44Bank Performance................................................................................................. 44Finding and Issues................................................................................................. 45

Women's Employment Difficulties Were Neglected .................................... 45Technical Expertise Was Limited .................................................................. 46The Social Sector Strategy Was Inadequate ................................................... 46

Lessons ................ ........................................................................ 48

BOXES

1. How CONALEP Schools Function .................................................................................. 252. How PROBECAT Scholarships Are Used........................................................................343. Poverty Discrimination?................................................................................................... 38

ANNEXES

1. Manpower Training Project-Objectives and Design.......................................................492. Project Results: CONALEP II (Direct Benefits of Project for Total CONALEP System). 513. Project Results: Manpower Training Project ................................................................... 524. Comments from the borrower .............. ............................................. 535. Responses to borrower comments . .................................................................... 61

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Preface

This is a Performance Audit Report (PAR) on two related education projects in Mexicosupported by the World Bank during 1985-1992. The Second Technical Training project (Loan2559-ME for US$81 million) was approved on May 28, 1985 and was completed on June 30,1991; the funds were fully disbursed by July 26, 1991. The Manpower Training project (Loan2876-ME for US$80 million) was approved in October 1987 and was substantially completed onDecember 31, 1992. The funds were fully disbursed, and the project closed on June 30, 1993,six months before the anticipated closing date.

The PAR is based on the following sources: the Project Completion Reports (PCRs)issued as Report No. 10216 dated December 30, 1991 (Second Technical Training project) andReport No. 12562 dated November 30, 1993 (Manpower Training project); the Staff AppraisalReports (SARs); the Loan Agreements for the projects; and the project files, in particular thesupervision reports. An OED mission visited Mexico in March 1996 to collect other pertinentinformation.

The size, complexity, and spread of project activities throughout the country made itimpossible to verify all activities. For each subcomponent, the audit reports achievements asreported in the PCRs and complements them with interviews and observations of the auditmission. The extent to which the events witnessed by the audit mission were representative ofwhat took place under the projects is, of course, unknown.

Value added. The ICR focused on the achievement of project objectives. The auditmission focused on the social and instructional issues influencing project outcomes. Discussionswere held with students, businessmen, and project administrators in order to understand theextent to which the training provided had helped improve productivity and incomes in Mexico.

Following customary OED procedures, copies of the draft PAR were sent to the relevantgovernment officials and agencies for their review and comments. A number of observationswere made which have been incorporated into the PAR as Annex 4.

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Basic Data Sheet

SECOND TECHNICAL TRAINING PROJECT (LOAN 2559-ME)

Key Project Data (amounts in US$ million)Appraisal Actual or Actual as % ofestimate current estimate appraisal estimate

Total project costs 164.4 164.4 100Loan amount 81 81 100Date physical components completed 6/90/89 6/90/91 2-year delayEconomic rate of return n.a.

Cumulative Estimated and Actual Disbursements

FY85 FY86 FY87 FY88 FY89 FY90 FY91a

Appraisal estimate (US$M) 6.9 23.5 49.0 72.0 81.0

Actual (US$M) 11.5 30.7 54.0 65.4 75.2 79.3

Actual as % of estimate 49% 63% 75% 81% 92.3 97

Date of final disbursement: July 26, 1991

a. Actual disbursements as of May 23,1991; the Loan was fully disbursed by July 26,1991.

Project DatesOriginal Revised Actual

Identification mission 09/84 -- 08/84Prep. appraisal mission 11/84 -- 11/84Loan negotiations 04/85 -- 04/85Board presentation 05/85 -- 05/85Loan signature 07/85 -- 07/85Loan effectiveness 10/85 01/86 12/85Project completion 06/89 06/90 12/90Loan closing 12/89 12/90 06/91

Staff Inputs (by Stage of Project Cycle)

Stage of Project Cycle Actual Staffweeke

Through appraisal 48.5

Appraisal through Board approval 52.9

Supervision 84.2a. TRS data until 01/10/91.

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Mission DataDate No. of Staff weeks Specializations

(month/year) persons infield represented a Performance rating

Identification 10/84 3 5 EP, TE, A

Prep. appraisal 11/84 5 8 EP, FP, TE, E,EE, LO

Total 8 13

G P M F

Supervision 1 08/85 1 1 EP 1 1 2 1

Supervision 2 02/86 3 4 EP, 2TE 1 1 2 1

Supervision 3 05/86 3 3 EP, 2TE 1 1 2 1

Supervision 4 10/86 2 2 EP, TE 1 1 I I

Supervision 5 10/87 1 2 TE 1 1 1 1

Supervision 6 05/88 2 3 2TE 1 1 2 1

Supervision 7 11/88 3 6 2TE, TM n.a.

Supervision 8 01/89 2 6 2TE 1 1 1 1

0 D C M F

Supervision 9 06/89 2 2 2TE 1 I 1 1 1

Supervision 10 11/89 3 3 2TE, E 1 1 1 1 1

Supervision 11 06/90 3 4 E, TE, IS 1 1 I I 1

Supervision 12 11/90 1 1 TE 1 1 1 1 1

Total 26 37

PCR 11/90 1 1 IS 1 1 1 1 1

Total 1 1

a. E = Economist; EE = Education Economist, A = Architect; EP = Education Planner, IS = ImplementationSpecialist; TE = Technical Educator; LO = Loan Officer; TM = Training Organization and Management SpecialisLb. G= General Status; P = Procurement; M = Management; F= Financial.c. 0 = Overall Status; D Project Development Objectives; C = Compliance with legal Covenants; M = ProjectManagement Performance; F = Availability of Funds.I = Problem Free or Minor Problems; 2= Moderate Problems; 3 = Major Problems.

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Other Project Data

Borrower/Executing Agency:

FOLLOW-ON OPERATIONS

AmountOperation Credit No. (US$ million) Board date

Third Technical Training Project 3358-MX 152 June 25, 1991

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Basic Data Sheet

MANPOWER TRAINING PROJECT (LOAN 2876-ME)

Key Project Data (amounts in USS million)Appraisal Actual or Actual as % ofestimate current estimate appraisal estimate

Total project costs 156 156 100Loan amount 80 80 100Date physical components completed 12/31/93 6/30/93 6 months early

Cumulative Estimated and Actual Disbursements

FY88 FY89 FY90 FY91 FY92 FY93

Appraisal estimatea (US$M) 7.5 16.0 32.0 48.0 64.0 78.0

Actual (US$M) 6.0 21.7 38.2 59.7 75.0 80.0

Actual as % of estimate 80.0 135.6 119.4 124.4 117.2 102.6

Date of final disbursement (projected): June 30, 1993

a. Appraisal estimate adjusted to actual date of loan approval (October 6,1987).

Project DatesPlanned Actual

Identification 05/86 05/86Preparation I 10/86 10/86Preparation II 02/87 02/87Preappraisal 04/87 04/87Appraisal 10/86 05/87Negotiations 04/87 08/87Board approval 05/87 10/87Loan signature 10/87 10/87Loan effectiveness 10/87 10/87Loan closing 12/93 06/93

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Staff Inputs (staff weeks)

HQ Field Totala

Through appraisal 42.5 33.5 76.0

Appraisal through 20.0 0.0 20.0Board approval

Supervision 22.5 47.8 70.3

PCR 0.8 0.5 1.3

Total 75.0 81.3 166.3a. TRS data until 12/31/91.

Mission DataDate No. of Staff weeks Specializations Performance Types of

(month/year) persons infield represented' ratingb problems

Identification 05/86 2 1.6 C, N n.a

Preparation I 10/86 6 10.5 A, C, N. P, Q, R n.a

Preparation II 02/87 5 12.0 C, F, L, M, 0 n.a

Preappraisal 04/87 2 2.0 A, C n.a

Appraisal 05/87 4 6.4 A, C, J, M n.a

Supervision I 10/87c 2 2.0 C, F I n.a

Supervision 2 05/88 5 7.0 C, F, G, I, K I n.a

Supervision 3 11/88d 3 6.0 C, F, S 1 n.a

Supervision 4 01/89 2 6.0 C, F 1 n.a

Supervision 5 06/89 4 4.0 C, F, G, H 1 n.a

Supervision 6 11/89 4 5.0 A, B, C, F 1 n.a

Supervision 7 07/90 3 7.8 A, B, C 1 n.a

Supervision 8 05/91c 5 10.0 A, B, C, D, E 1 n.a

Completion 03/93 2 0.5 A,E 1 n.a

a. A = economist; B = operations analyst; C = senior technical training specialist; D = labor statistics specialist; E =employment services specialist; F = technical education analyst; G = evaluation specialist; H = labor economist; I=education and training unit chief; J = institutional development specialist; K = vocational educator; L = managementand in-service training specialist; M = project costing specialist; N = senior education planner; 0= loan officer; P =manpower information systems specialist; Q = industrial and management training specialist; R = technical educator,and S = training organization and management specialist.b. I = problem free or minor problems; 2 = moderate problems; 3/4 = major problems.c. Jointly with supervision mission of Loan 2559-ME.d. Jointly with supervision mission of Loan 2559-ME.e. Jointly with identification mission of Second Manpower Training Project.n.a. = not applicable.

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Other Project Data

Borrower/Executing Agency:

FOLLOW-ON OPERATIONS

Operation AmountCredit No. (US$ million) Board date

Labor Market and Productivity

Enhancement Project 3542-ME 174 02/15/92

Technical Education and Training 3805-MX 235 10/27/94Modernization

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Evaluation Summary

1. A performance audit of the Second Technical Training project and the ManpowerTraining project was conducted because the Project Completion Reports (PCRs) raised importantquestions regarding the effectiveness in providing technical training to large numbers of peopleand at the same time developing the institutions that would carry it out. The PCRs also raisedquestions regarding the benefits women and the poorer populations derived from these projects.

2. Both projects served large numbers of beneficiaries throughout the country throughdiverse means. The audit mission visited activities in Ciudad JuArez, Monterrey, Chiapas, andMexico City. At each site, discussions were held with employers, students, graduates, andbusinessmen to assess the effects of training, scholarships, and technical assistance on thevarious beneficiaries. The concerned project agencies planned all visits extremely well.

Background

3. To help spur economic growth after the economic crisis of the 1980s, the governmentsought to increase the number and skills of mid-level workers and technicians. Designed to meetthe technological needs of the private sector, training efforts concentrated on younger peoplewho had completed lower secondary education (grade 9). To prevent loss of trainees to highereducation, the new pre-employment training programs were designed to be terminal. The mostimportant training vehicle has been the National College of Technical Education (ColegioNacional de Educaci6n Profesional; CONALEP), a semi-autonomous organization under theSecretaria de Educaci6n (Ministry of Education). CONALEP became the focus of three Bank-financed technical training projects, the second of them the subject of this audit (CONALEP II).

4. Substantial gains in productivity would require more in-service training of large numbersof employed workers, particularly for middle-level technicians and skilled workers in Mexico's380,000 micro, small and medium-scale enterprises. To serve these workers and enterprises, theBank financed a series of three manpower training projects that emphasized development ofindustrial and service skills in urban areas and were administered by the Secretaria de Trabajo yde Servicios Sociales (STPS; Ministry of Labor and Social Services). The first of these projectsis also a subject of this audit. STPS contracted much of the training it financed to CONALEP,thus forming training linkages with this institution.

Second Technical Training Project (CONALEP II)

5. Objectives and Design. The objectives of CONALEP II were to: (a) improve theoperational efficiency and effectiveness of central and local administrations; (b) increase thesupply of skilled workers and technicians; (c) improve the quality of training instruction; (d)pilot advanced maintenance systems for buildings and equipment and introduce significant cost-reduction measures; and (e) facilitate the development of strategic training options andinstitution building. To achieve these objectives, the project provided for: (a) technicalassistance, fellowships, and management training; (b) construction, equipment, and furnishingsfor about 97 new training centers; (c) the upgrading and expansion of instructor training and

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teaching materials; (d) the development of a building maintenance system; and (e) studies ofefficiency measures and strategic training options.

Implementation Experience

6. Implementation proceeded speedily and efficiently. A total of 130 vocational trainingcenters were constructed and equipped, a substantial increase from the 97 planned duringappraisal. The mission found the large amount of equipment financed by CONALEP II (some ofit 8-10 years old) to be largely still useful and in good working order. A self-maintenancestrategy was developed, which has been strengthened in recent years, to ensure the sustainabilityof the investment.

7. Individual schools offer various specialties as needed in the local markets, mainly inindustrial, services, health, and agricultural areas. They have been located near industrialcenters, and industry linkage committees have helped develop programs and curricula specific tothe local economic needs. The project financed curricular improvements for about 40 percent ofthe courses and 1,111 publications. About 6.8 million copies were printed of textbooks,bulletins, syllabi, training materials, guidelines, handbooks, leaflets, extension bulletins,journals, and manuals. However, the mission could not determine whether the instructors wereproperly trained or how extensively they used the new texts.

8. The project started an innovative program to offer technological services to privateindustry (Programa de Asistencia de Servicios Tecnol6gicos-CAST). During CONALEP II,about 30 enterprises benefited through training of in-plant trainers. This program has greatlyexpanded under the follow-on project in about 30 areas of heavy industry, where just-in-timeadvance technology updating is important. Three industrial clients interviewed expressed greatsatisfaction with the services. Due to demand, CAST centers are able to become profitablerelatively quickly despite the large investment in equipment.

Results

9. The project clearly met its objectives and the outcome is rated satisfactory. By 1995360,000 people had been trained. CONALEP offered courses in all specialties to 212,000 pre-employment students and 80,000 employed workers. This is a remarkable achievement, giventhe overall low status of vocational schools worldwide as well as in Mexico before CONALEP.

10. Nevertheless, the three-year CONALEP programs have considerable dropout. Thecompletion rate was 52 percent at project closing, compared to 78 percent expected duringappraisal. Dropout is particularly high during the first semester, when about 40 percent ofstudents leave , partly due to a strong preference for academic secondary education. Interviewswith students and graduates showed that many students initially lose their self-esteem when theyleave the formal system and make efforts to return to secondary schools. The graduatesinterviewed by the mission reported much satisfaction with the program. However, they felt theneed to re-enter the formal system for advanced studies after some years of work for furtherprofessional development.

11. Graduates have fared relatively well in the job market. The PCR states that at the end ofthe project implementation period, 62 percent of the three-year program graduates foundemployment within three months of completing their coursework, with 84 percent employed in

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their area of training specialization. Almost all graduates were employed by the private sectorand were earning on the average 170 percent of the minimum wage in 1991. A survey showedthat 92 percent of interviewed employers in nine different economic sectors who hiredCONALEP graduates expressed consistently for a four-year period that training was good orexcellent.

12. Women's incomes have not benefited from CONALEP training as much as men's. Theinstitution tries to improve the status of women's training, and there are no barriers to admittingthem in any course. Nevertheless, women tend to congregate in the more stereotypicallyfeminized professions, such as computer operation (informatics) in the three-year courses andindustrial sewing in the shorter courses. The remuneration for feminized skills (e.g. seamstressesin textile factories) is quite low. As a result, tracer studies have found that female three-yeargraduates made up 44 percent of graduates placed in a job vs. 56 percent for men.

Manpower Training Project

13. Objectives and Design. Broadly, the objectives of the Manpower Training project wereto (a) strengthen employment services to place displaced workers in jobs and administer short-term PROBECAT scholarships; (b) assist private enterprises to upgrade the skills of employees;(c) upgrade STPS staff and strengthen STPS capability to manage information and carry outpolicy studies; and (d) increase the training capacity of selected institutions so that they can trainthe unemployed. The project financed scholarships for the unemployed, training and equipmentfor administering bodies (such as state employment services, training institutions), and assistancefor small and medium-sized businesses.

Implementation Experience

14. Implementation proceeded very well and met or surpassed expectations in almost allcomponents. Disbursements were consistently ahead of forecast.

15. The employment services and labor retraining component received training andupgraded equipment. During the implementation period, state employment services served about254,074 job seekers and 247,463 vacancies per year. By the end of 1992, over 293,217unemployed workers had been retrained through PROBECAT scholarships (programa de becasde capacitaci6n en el trabajo) in over 19,939 courses, lasting 1-6 months. About 60 percent ofmen and 33 percent of women found jobs within three months following training.

16. The demonstration in-service teaching and productivity component (CIMO) wasconceived as a pilot program. CIMO worked directly with over 32,304 separate enterprises andtrained more than 124,182 workers. It proved very successful and was greatly expanded underthe follow-on project.

17. The STPS institutional strengthening component: (a) expanded STPS's program of labormarket surveys and studies, (b) trained 1041 STPS staff; (c) provided computers and software tostate employment service offices in state capitals; and (d) supported the development of acomputerized market information system that became operational during the follow-up project.

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The training institutions upgrading component has been successful in increasing trainingcapacity and in improving the quality of training and administrative efficiency of 445participating training institutions. In these institutions, about 134,000 trainees wereenrolled in preservice training courses by 1991/992; some 42,647 trainees handparticipated in in-service courses, and 24,217 had participated in retraining programactivities.

Results

18. The project performed well and outcome is rated satisfactory. The project strengthenedemployment services at the state level, assisted small private enterprises to upgrade the skills oftheir workers, strengthened the market monitoring capability of STPS, and upgraded institutionsthat provided training in critically needed specialties. A strong monitoring plan made it possibleto measure outcomes.

19. The CIMO program, which provided management help to enterprises, was quitesuccessful. An evaluation study concluded that the program was able to build close and effectiverelations with enterprises and could provide effective management support in a short time withonly a very light administrative structure. A case study of 30 enterprises participating in theprogram concluded that enterprises had indeed increased their productivity, gained better accessto markets, and had improved organization and labor conditions.

20. The outcomes of the PROBECAT scholarship program are quite ambivalent. An impactstudy found a rather small effect on income and on the probability of finding a job after training,but the outcomes were mainly favorable for men; women did not benefit significantly from theprogram. To some extent, this may have happened because fewer women were eligible forretraining. However, it mainly seems due to women's exclusion from the more technicalpositions of many larger enterprises. Most employers interviewed by the mission expressedclear gender preferences and stereotypes for various occupations. Award of scholarships wasmarket-driven, and about 80 percent of the scholarships went to men.

21. The benefits and sector strategy sections of the Staff Appraisal Report (SAR) stated thatwomen and the poorest of the poor would benefit from this project. However, an overall povertyalleviation effect could not be verified. The analyses used to demonstrate it were probablyinfluenced by a statistical artifact, regression towards the mean.

22. Related to the outcomes are the following issues:

(a) Women's vocational choices are constricted. Scholarship recipientslargely expressed the desire to study traditionally female areas. Somestated to the mission that they did so because employers would not hirethem for more male-oriented positions. A great deal of women'straining has been in sewing, but income-generation opportunities insewing appear limited. No study has been done to find out how womenuse this skill after training, particularly when they lack sewing machinesor a viable business plan.

(b) Rural areas and poor and indigenous people need more trainingopportunities. The project explicitly targeted urban areas. Only 7

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percent of the investment went to rural areas, despite an expressed need,largely because Bank-approved criteria limited scholarships to adultprimary-school leavers. State STPS officials in areas like Chiapas haddifficulty finding many such people and developing effective trainingsolutions. The STPS also sought providers for indigenous people inremote rural areas and ways to deal with the environmental degradationcreated by some of their income-generation activities. To expand inrural areas, the program needs a knowledgeable anthropologist toconduct culturally appropriate social assessments.

(c) Instructional delivery must improve. There was little or no monitoring ofinstruction, attendance, or learning outcomes by STPS, particularly forcourses given outside the direct control of CONALEP. Some studentsstated that the training time (for instance, two months for carpentry) wastoo short for them to learn all they needed to know. The missionobserved that shorter courses, which catered to less educated people,lacked manuals, and interviewed two instructors who were not clearabout the curriculum they were teaching. However, the mission did notfind conclusive evidence that the training program was deficient;insufficient teacher training and instructional delivery may account inpart for the ambivalent outcomes of PROBECAT scholarships.

PCR Ratings

23. The audit agrees with the implicit ratings of the Project Completion Reports (PCRs).For both projects, the outcome is rated as satisfactory. Institutional development impact is ratedas substantial and sustainability as likely. The Bank's performance is rated as satisfactory. Theborrower's performance is also rated as satisfactory.

Institutional Development Impact

24. The audit agrees with the PCRs of both projects that institutional development impacthas been substantial. CONALEP was able to execute a series of three complex projects thatdeveloped 252 well-run schools with a good reputation in the community. The schools visitedhad competent and educated staff, able on short notice to organize discussion sessions, invitegraduates and industry representatives, and provide data regarding school operations. Severalcomponents of the Manpower Training project strengthened institutional development impact atthe federal and state levels through staff training, labor market information systems, labor marketstudies, capability to search for jobs and place the unemployed, and the upgrading of traininginstitutions.

Sustainability

25. The audit agrees with the PCRs of both projects that sustainability is likely.

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Borrower Performance

26. In both projects, borrower performance was satisfactory. The executing agencies provedproficient in project planning and implementation and showed competence in projectmanagement. The Manpower Training project, in particularly, enjoyed much governmentsupport and was implemented by a highly competent, enthusiastic, and hard-workingmanagement group.

Bank Performance

27. For both projects, the Bank's performance was adequate during project appraisal andsupervision. There was considerable staff continuity throughout the years, which facilitatedimplementation. However, supervision time was limited for projects of such magnitude.CONALEP II received only 12 supervision missions in six years, averaging only 6.2 staff weeksevery year. For the Manpower Training project eight supervision missions were conducted,which consisted of 2-5 members for about two weeks in the field.

28. Government officials expressed satisfaction with the services the Bank had provided insupervising the two projects as well as with the quantity and quality of its staff. However, STPSexpressed dissatisfaction with turnover of task managers and a strong desire to maintaincontinuity.

29. By traditional project criteria, the Bank's performance in the implementation of thesetwo projects is rated satisfactory. However, Mexico's reletionship with the Bank in the 1980screated complexities in the Bank's country assistance strategy and its implementation. Thegovernment was extremely reluctant to borrow for the social sectors, and the Bank did its best toestablish a working relationship with Mexico through interventions that the governmentpreferred. As a result of these interactions, the mission identified the following important issueswith respect to the Bank's strategy and implementation.

(a) Lack of educational expertise. No attention was paid to the instructionalprocesses and outcomes of the Manpower Training Project. Despite thedifficulties in teaching persons of limited educational background, adulteducation specialists were not involved in the projects. Lack ofinstructional expertise may have contributed to a lower quality ofinstruction and adversely influenced project outcomes. The economistswho managed the project studied external efficiency in detail but did notdeal with internal efficiency. Inattentiveness to learning outcomes hasmade it impossible to link cause and effect in studying earningsoutcomes.

(b) Inaction on women's employment problems. Since 1990, studies havecarefully monitored the effects of the Manpower Training project onwomen, but neither the Bank nor the borrower has taken any remedialaction. The Staff Appraisal Report (SAR) of the subsequent project(Loan 3805-ME; 1992) mentioned the labor market barriers for womenand proposed an action plan. However, the audit mission found thatafter four years of implementation, no substantive action had been takenon either developing an action plan or remedying the problem. This

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inaction was particularly important in light of the fact that genderdiscrimination in most cases is illegal according to Mexico's labor laws.Since employers freely exclude women from potential employmentthrough scholarships, it appears that Bank proceeds have been used toperpetuate gender discrimination practices for nearly a decade.

The women's employment problems in the project highlight a dilemma.Is it acceptable from a development perspective to finance scholarship schemesthat involve clear gender discrimination and practices that keep women at thebottom of the income scale? According to Operational Directive 4.20, theBank is to assist its member countries to design gender-sensitive policies,modify legal frameworks to improve women's access to assets and services, andfinance programs for women. Should the Bank also do the reverse, that isrefuse to finance programs that involve gender discrimination? High-leveldecisions are needed.

(c) Inadequate social sector strategy. The Bank emphasized the economicaspects of the projects and monitored productivity but did not deal withissues of the rural poor or the indigenous populations. The sectorstrategy seems to have suffered from the same problem. Fivevocational-technical education projects were appraised in Mexico beforeany other social-sector projects were implemented. The SAR of theManpower Training project promised complementary projects thatwould be better targeted to the poor, but the first these did not becomeeffective until five years later. Clearly, Mexico did not want to borrowfor the social sectors at the time. However, did the Bank follow itsguidelines as a development institution when it agreed in the mid-1980sto dispense with projects targeted toward the poor? It seems to haveacted towards Mexico more as a commercial bank than as a developmentinstitution at that time.

30. The Bank's insistence on social-sector interventions seems to have paid off. Mexico'ssocial sector strategy has vastly improved in recent years. Nevertheless, the implementation ofthe two audited projects may have suffered because potential beneficiaries in the more deprivedareas did not have the minimum qualifications to participate that they might have receivedthrough primary-education investments. Clear high-level guidelines are needed to determinehow the Bank strategy should evolve when borrowers with large, underserved poor populationsare reluctant to borrow for the social sectors.

Lessons

* Studies of women's earnings and calls for action plans may be insufficient to bring aboutimprovement. Expertise, persistence, follow-through, and dedicated time during supervisionmissions are also needed.

* Projects that require a minimum level of education may be implemented most effectivelythrough the support of operations that provide the poor with the required education. Projectswhich have minimum educational requirements are not likely to reach the poorest of thepoor, who lack the requisite level of education.

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* The economic viability of vocational education projects is likely to suffer if they aredeveloped and supervised with scant technical expertise. Economists must work closelywith technical experts.

* Terminal diploma courses in many countries suffer from low quality and low studentdemand. However, the success of CONALEP shows that it is possible to deliver qualityeducation to large numbers of students. Implementing agencies must create a positive imagefor students and effective linkages with local enterprises.

* Indigenous groups may be difficult to reach through projects designed for the generalpopulation. Anthropologically sensitive methodology and social assessments would beneeded to maximize the benefit these groups can receive from Bank investments.

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1. Introduction

1.1 A performance audit of the Second Technical Training project and the ManpowerTraining project was conducted because the Project Completion Reports (PCRs) described themas successful in providing large-scale technical training and developing at the same time theinstitutions that carried it out. At the same time, the PCRs raised important questions regardingthe benefits women and the poorer populations derived from these projects.

1.2 Both projects served large numbers of beneficiaries throughout the country, and the auditmission was able to visit only a small sample of project activities. Sites visited were in CiudadJuirez (where much activity was targeted towards the maquiladoraI industry), in Monterrey(where high-technology industry is concentrated), Chiapas (a rural area with limited industry anda large indigenous population), and in Mexico City (at a specific vocational school for service-oriented professions). In each site, discussions were held with employers, students, graduates,and businessmen aimed at assessing the effects that training, scholarships, and technicalassistance had had on the various beneficiaries.

Background

1.3 The projects grew out of the government's desire to alleviate the effects onunemployment of a severe economic crisis that enveloped Mexico in the early 1980s. Althoughby 1985 a stabilization program brought the situation under control, economic growth was stilllow. The country suffered from long-term problems, such as a high rate of population growth(about 2.5 percent per year), low levels of human capital formation, slow growth in agriculture,widespread poverty, highly skewed interpersonal and interregional income distributions, and aneconomy too dependent on oil revenues. To deal with the impact of these problems on growthand employment, the government sought to increase the number of skilled workers andtechnicians. A large and complex technical training system was developed that serve studentswith various levels of education. To make it possible for students to attain the levels oftechnological development needed by the industry, efforts were concentrated on training mid-level technicians, younger people who had completed lower secondary education. To preventloss of trainees to higher education, terminal (essentially nonformal education) programs weredesigned that would meet the demand of the private sector. The most important training vehiclehas been the Colegio Nacional de Educaci6n Profesional (CONALEP; National College ofTechnical Education), a semi-autonomous organization under the Ministry of Education(Secretaria de Educaci6n).

1.4 However, technological training by itself was considered insufficient to stimulateeconomic growth and productivity. Employment services and retraining programs were alsoneeded to be strengthened and redirected to better serve the poorest among those displaced andunemployed. Particularly important was aid to the informal sector, which in the mid-1980sincluded one-third of the work force and was growing faster than the formal sector. Furthergains in the productivity required more effective provision of in-service training for largenumbers of workers, particularly for middle-level technicians and skilled employees in Mexico's

1. Industry assembling products specifically for use in other countries.

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380,000 small and medium-scale enterprises (up to 250 workers). These enterprises, which in1987 employed 51 percent of the industrial work force, were particularly affected by theeconomic adjustment measures but hey also played an increasingly important role under theliberalized trade system. To serve them, the Manpower Training project was developed. Itemphasized development of industrial occupations in urban areas and was administered by theSTEPS. Most training activities of the project were contracted to CONALEP.

1.5 Thus, the Bank financed two parallel series of manpower training projects in Mexico.The projects and their labor-market linkages mark a clearly enunciated, long-term policy of thegovernment to support the type of training that will make Mexico a major producer and exporterof high-technology industrial products.

Previous and Subsequent Projects

1.6 The Bank's presence in Mexico's education sector started in 1981. For the first 11 yearsit centered exclusively on vocational-technical education. No Bank-financed investments weremade in any other education subsections until 1992, when a primary education project becameeffective (Loan 3407-ME). Also, no other social-sector investments were made until the firsthealth project (Loan 3272-MX) became effective in 1991, partly because Mexico was not willingto borrow for the social sectors in the 1980s. (See section 4.)

1.7 The first Technical Training Project, (CONALEP I; Loan 2042-ME) became effective in1981. The project initiated the development of CONALEP by providing civil works andequipment for 122 schools as well as institutional development. An audit conducted in March1988 concluded that the project had a satisfactory outcome (see Report No. 7136, OED2).CONALEP I was followed by the Second Technical Training project (also known as CONALEPII), the subject of the current audit. Upon completion, the project was in turn followed by theThird Technical Training project, CONALEP III; Loan 3358-MIX; 1991). The other subject ofthe audit, the Manpower Training Project, started about two years after CONALEP II and wasalso followed by another project, Labor Market and Productivity Enhancement Project (Loan3542-ME; 1992). Yet another technical-vocational education project became effective in August1995 (Technical Education and Training Modernization project; Loan 3805-ME). Thus, a totalof six projects have been financed in vocational-technical education (Table 1).

2. The problems identified in the audit centered on the high dropout rate, low financial sustainability, a shortage ofinstructional materials, deficient instructor training, poor building maintenance, and weak monitoring. Theseproblems have been dealt with to a large extent, but high dropout rates continue to be a problem.

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Table 1. Vocational-Technical Education Projects in MexicoYear of Colegio Nacional de

Effectiveness Educaci6n Profesional Secretaria de Trabajo y Previsi6n Social

1981 CONALEP I (Ln. 2042-ME)1985 CONALEP II (Ln. 2559-ME)1987 Manpower Training (Ln. 2876-ME)19891991 CONALEP III (Ln. 3358-ME)1993 Labor Markets & Productivity (Ln. 3542-ME)1995 CONALEP participates Technical Educ. & Training Modernization (Ln. 3805-ME)

1.8 Monitoring and Evaluation. Collection and analysis of monitoring data was animportant feature of both series of projects, and the systems have improved with the years.Although the follow-up system is still imperfect, tracer data exist on graduates as well asdropouts, making it possible to study the effects of the projects.

1.9 To describe the two audited projects most clearly, the report presents separately theobjectives, implementation experience, outcomes, and recommendations for each. Thesediscussions by issues and general recommendations common to both projects.

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2. Second Technical Training Project (CONALEP II)

Project Objectives and Components

2.1 The objectives of CONALEP II were to:

a. improve the operational efficiency and effectiveness of central and localadministrations;

b. increase the supply of skilled workers and technicians;

c. improve the quality of training instruction;

d. develop advanced maintenance systems for buildings and equipment on a

pilot basis, and introduce significant cost-reduction measures;

e. facilitate the development of strategic training options and institutionbuilding.

2.2 To achieve its objectives, the project included: (a) improvement of CONALEP'soperational efficiency and effectiveness through technical assistance, fellowships, andmanagement training; (b) increasing the supply of skilled workers and techniciansthrough the construction, equipping, a and furnishing of about 97 new training schools;(c) upgrading and expansion of instructor training and teaching materials; (d)development of a maintenance system for buildings; and (e) studies of other efficiencymeasures and development of strategic training options.

2.3 Total costs for the Second Technical Training project were estimated at US$162.2million, of which US$81 million was financed by an IBRD loan. The project was approved onMay 28, 1985 and became effective in October 1985. It was completed in December 1990 andwas closed after a delay of two years, on June 30, 1991.

Implementation Experience

2.4 Despite some procurement delays, implementation proceeded speedily and efficiently.Project activities remained essentially as planned, but the scope widened. The number ofschools targeted for construction increased by 25 percent. Construction savings, additionalgovernment funds, and exchange-rate changes provided the needed financing.

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Box 1: How CONALEP Schools Function

The CONALEP system offers about 120 courses of study, mainly in industrial, services, health,and agricultural fields. Different specialties are offered as needed in the local markets. Schools provide (a)short courses in specific subjects (including courses contracted by STPS), and (b) a terminal three-yeardiploma to students who have at least a lower-secondary education (9th grade). To ensure that techniciansreach the labor market rather than the universities, CONALEP diplomas do not allow students to continuestudies in higher education; though officially recognized, the education is in effect nonformal. This was arisky decision, because world-wide terminal-degree schools tend be of little demand and to attract thelowest-performing or most problematic students. However, the risk has not materialized in the case ofCONALEP; the economic crisis of Mexico has made many students decide in favor of more immediateeconomic returns. CONALEP trainees are typically lower-secondary school leavers from a lower-middleclass background who did not excel in school. (Some, however, are older and much better educated.)According to reports of administrators, the students like discipline and order, and CONALEP schools donot face major delinquency problems. A large variety of scholarships ensures that most people who wantto study can indeed do so. According to the Implementation Completion Report (ICR), about 239,000students were enrolled in project-financed CONALEP schools during the life of the project, surpassing theappraisal estimate of 200,000. Numbers have remained high in the years since project completion.

CONALEP actively recruits students and advertises its training in the mass media. Its counselorssystematically promote the training centers to the secondary schools that constitute their catchment areas;the mission observed groups of students visiting school grounds. However, schools have found it difficultto convince students to study some specialties for which there is a known market need. Students(particularly women) seem to be attracted to the "cleaner" specialties for which there may be less need(such as computer operation) than to "dirtier" specialties, such as machining and agricultural specialties.These choices create skewed supply of labor, but administrators have been reluctant to refuse enrollment tostudents in the more popular specialties.

Physical Facilities

2.5 Civil works, furniture, and equipment were provided to a total of 130 vocational trainingschools, an increase from the 97 planned during appraisal. In addition to fixed schools, about 80mobile training units (small trailers that carry equipment to remote sites) were constructed bystudents in automotive specialties of CONALEP schools, at considerable savings. According tocriteria established in collaboration with the Bank, schools have generally been built nearindustrial or substantive labor-market activities (such as tourism), so that graduates would beabsorbed. However, this meant that the less developed areas of the country would have fewerCONALEP schools. Mobile units have served to extend the reach of the schools to other areas.

2.6 The four buildings visited by the audit mission were well maintained, provided apleasant environment to students, and were well equipped. The equipment financed byCONALEP II was largely found by the audit mission to be still useful and in good working order(with the exception of obsolete personal computers). It is maintained by students and teachers,who thus learn maintenance as well as equipment operation. The apparent good state of the civilworks and equipment is important, given the large investment in this component (US$90million). The self-maintenance strategy, which has been strengthened in recent years, is animportant step towards ensuring the sustainability of the investment.

2.7 Linkage committees. To open specialties, schools must do an extensive market studyand be able to show demand for at least five generations of graduates. Committees of localbusinessmen ("linkage committees") meet on a regular basis and advise individual schools on

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what specialties to teach on the basis of local demand. The schools with the help of committeesplace graduates in jobs. In every school visited, the audit mission met with 3-6 members oflinkage committees. They were representatives of businesses and administrators oforganizations which employed graduates. Although they were all very complimentary of thework done by CONALEP, it was unclear to what extent they actually offered sustainedleadership and guidance. In one school, for example, they said they met once a month for anhour. In another, the committee had been reconstituted only a month earlier, after a period ofinactivity. (It would be helpful if the content of their specific suggestions were researched byCONALEP.) Although the substantive importance of their contribution may not be clear, theirparticipation and support they generate may be to some extent responsible for the general highregard that communities seem to have for CONALEP schools.

Curricula and Materials

2.8 In the context of improving instructional quality, the project financed curricularimprovements in about 40 percent of the courses. The mission found that sophisticatedcurricular work had been undertaken. Curriculum guides, for example, gave clear breakdowns ofbehaviorally oriented instructional objectives and activities for the benefit of instructors, who areall part-time employees.

2.9 CONALEP has considerable technical expertise and develops its curricula and coursescentrally. There is certainly a strong argument in favor of this method, since duplication ofefforts is avoided. However, individual schools might benefit from more latitude in decidingwhich courses should be taught. For example, health assistants in the state of Chiapas needed toknow indigenous languages, such as Tsotsil and Tseltal. The curriculum, however, specified thatthey should study English. On another occasion, however, the director of a school was able tosubstitute an obsolete computer language with a more updated and useful course.

2.10 About 1111 publications were developed, and 6.8 million documents printed, includingtextbooks, bulletins, syllabi, training materials, guidelines, handbooks, leaflets, extensionbulletins, journals, and manuals. The audit mission found in the schools a sample of inexpensivebut high-quality textbooks, supportive materials, and curricular guides. There were also manyaudiovisual materials and functioning equipment.

2.11 While the textbooks are eminently usable, to what extent do students actually use them?This was unclear. Although CONALEP instructors are not professional teachers, they are givenlatitude in how they teach, and some may choose not to use the textbooks extensively. Becausetextbooks are optional, students may not buy them, despite the low cost. Administrators said thatmany students study them in the library, but it is unclear to what extent their probability ofpassing a course is compromised by the lack of a concrete, readily available set of instructionalmaterial. The mission observed instruction in two classes. The textbook assigned to the coursewas not in use in either; the teacher dictated and students took notes, with considerable wastageof instructional time. Certainly the two observations cannot be generalized, but they are a causeof some concern.

2.12 Textbooks should certainly be set aside if they do not support the instructional objectivesof courses, but then a set of notes, articles, or other material should be given to students. Afterthe effort and the expense incurred in developing good-quality materials, it is unfortunate toleave decisions about their use to part-time teachers and students without a good reason.

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Staff Development and Instructional Delivery

2.13 Under CONALEP II, a total of 17,695 instructors received pedagogical training.CONALEP instructors are professional technicians who can teach only part-time. Few receiveteacher training before teaching in CONALEP schools. For this reason, CONALEP makesconsiderable investment in teacher training. Currently, training is (a) pedagogical and (b)subject-oriented. Discussions with instructors showed that all had received some training, andthat some had received extensive training. However, it was unclear whether their teachingperformance had improved. The instructors observed by the mission in classroom instructionwere clearly in need of practically oriented training in instructional delivery and optimally usingclass time. They dictated material to students, did not use examples sufficiently meaningful tostudents' experience, did not ask questions that stimulated the thinking of all students, and tendedto neglect the women, who were more reluctant to volunteer responses. Brief and practicalteacher training is needed, possibly through videotapes that demonstrate effective and ineffectiveteaching.

2.14 Students undertake much practical work, which seems to be well targeted towardsmarket needs. In the context of improving quality of instruction, the project also supported pilotproduction training programs in 70 schools, designed to improve student motivation and reducetraining costs. The program produced 62,000 items of furniture, hand tools, and equipment.Because items were made more cheaply by students than by outside vendors, there was a netsavings of about US$930,000 for CONALEP. The mission was not able to observe this activityin progress. But it found that students were satisfied with the amount and quality of practicaltraining they were receiving.

Student Selection and Training-Social and Employment Issues

2.15 CONALEP's three-year program is still not preferred by many entrants, and there isconsiderable dropout. The overall completion rate was 40 percent in 1979-86, and had risen toonly 52 percent by the end of the project implementation period (as compared to 78 percentexpected during appraisal). The dropout rate is particularly high during the first semester, whenabout 40 percent of students leave. As a result, outputs from the regular three-year programwere 40,000 vs. an appraisal estimate of 48,000 although 173,682 students enrolled (Annex 2).

2.16 CONALEP studies show that dropout is due to internal reasons (academic failure,professor inadequacies, inadequate equipment) as well as external reasons: students' economicproblems, jobs, inadequate academic and vocational preparation. The latter seems to be ofconsiderable importance. Places in higher secondary schools are scarce, and many students whowant to enter cannot. The mission found that many students find it hard at the end of the ninthgrade to abandon any hope of going to the university. As a student in a focus-group discussionconducted in a Mexico City school stated, it is difficult to see oneself as someone who has nomore hope for secondary education. Therefore, students may register in CONALEP onlytemporarily and leave when they find a suitably located secondary school that will admit them.This is partly responsible for the high dropout rate seen in all CONALEP schools. However, ifstudents remain in CONALEP for a few semesters, they tend to get over this difficulty and dofind professional fulfillment and self-esteem.

2.17 Students and graduates reported that CONALEP instructors and administrators do try toinstill professional pride in them as technicians and help them overcome the status difficulty.

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Training in professional behavior is also beneficial for students from less advantagedbackground who may lack the social skills required in the labor market. Program features inselected schools include the use of uniforms and instructions to dress up every day as if going towork. However, more systematic work seems needed in the area of professional pride and socialskills, because the status problems are important yet frequently unexpressed.

2.18 One concern is that despite the efforts to make students feel better about their vocationalchoice, subtle contradictory cues are given. The instructors who are technicians are paid lessthan the instructors who are university graduates. Although many instructors are CONALEPgraduates, school administration is in the hands of university graduates. Finally, high-levelCONALEP staff are university graduates, although some positions could have been clearly filledby technicians, experienced in hands-on training. It might be useful to eliminate these inequities.

2.19 The mission interviewed groups of persons who had graduated during the CONALEP IIperiod. The graduates interviewed included some who had achieved high-level positions, suchas directing production in a large factory. Overall, they reported considerable satisfaction withthe training program. They found that the CONALEP program prepared them well and weresatisfied with their professional achievements. They rated most instructors as dedicated andknowledgeable in their subject area. One group of graduates, health assistants trained inChiapas, did express displeasure with their employment prospects, because they had to work astemporary workers with no benefits in health campaigns of rural areas. The problems of thesegraduates underscored the difficulty of obtaining socially needed positions in public-sectoragencies with severe budgetary constraints.

2.20 Many graduates who reach senior positions are unable to progress professionally. Theyfind themselves ineligible to undertake higher studies that would improve their professionalstatus, such as courses in institutes of technology. Therefore, they continue to earn less than lessexperienced persons with more advanced academic credentials. This is an important limitationthat the terminal nature of CONALEP creates, and solutions must be found to deal with it.

Gender

2.21 Tracer studies have found that female three-year graduates made up 44 percent ofgraduates placed in a job vs. 56 percent for men. All CONALEP courses are open to women,who according to the Staff Appraisal Report (SAR), were expected to occupy about 30 percent oftraining places. This expectation has been met, but women tend to congregate lower-payingprofessions traditionally filled by women: such as computer operation (informatics) in the three-year courses and industrial sewing in the shorter courses. There were women studying the lesstraditional and better paid trades, such as machining and electronics, but they were rare. TheCONALEP administration is cognizant of the problems women face at work but has notdeveloped in subsequent projects a coherent strategy to deal with them. Staff expressed the viewthat the position of women is gradually improving in a larger social context and that a wait-and-see rather than a corrective strategy is warranted.

2.22 Some CONALEP schools have been built near areas of indigenous populations. To whatextent was CONALEP able to reach these people, who are often very poor, through its regularthree-year courses, short courses, or through mobile units? The answer was unclear. Datacollected under CONALEP II did not include ethnicity. Since few students from indigenouscommunities obtain relatively high levels of schooling, the numbers were probably small.

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Benefits and Risks

2.23 The benefits of CONALEP II, as anticipated in the SAR were to strengthen CONALEPinstitutionally and to increase the numbers of skilled technicians in the country. The risks werethat there would not be enough qualified instructors willing to work in CONALEP and that thebenefits of production units might not materialize.

2.24 The expected benefits were obtained. However, the SAR only considered benefitsaccruing to CONALEP and not how the country would benefit from CONALEP's services. Onthe other hand, the expected risks did not materialize. Qualified instructors can be obtained inlarge numbers, in part because CONALEP was able to pay competitive wages, and several full-time technicians enjoy spending some time with students. Also, CONALEP was able toimplement innovative components, and thus the expected benefits of the pilot training programproduction units were reportedly obtained.

Results

2.25 The project clearly met its objectives. The neat and well-equipped physical facilities, thepositive experiences of graduates and their success in professional development have apparentlygiven CONALEP a good reputation among the general population. By 1995, 360,000 people hadreceived training, and in that year, CONALEP offered courses in all specialties to 212,000students and 80,000 on-the-job laborers. This achievement is remarkable, given the overall lowstatus of vocational schools worldwide.

2.26 How well have graduates fared in the job market? The PCR states that at the end of theproject implementation period, 62 percent of the three-year program graduates foundemployment within three months after course work completion, and about 84 percent wereemployed in their area of training specialization. Almost all graduates were employed by theprivate sector and were earning, on the average, 170 percent of the minimum wage in 1991. Thefollow-up studies did not provide information about employment stability. However, a surveyshowed that 92 percent of employers in nine different economic sectors who hired CONALEPgraduates noted consistently over a four-year period that the training was good or excellent. Atthe time of CONALEP II, adequate control groups had not been developed to evaluate the impactof training relative to other training alternatives or to no training at all. This issue was addressedin the follow-up project.

2.27 CONALEP II findings were consistent with earlier findings during the CONALEP Iperiod. The first round of the tracer study, encompassing more than 5,200 graduates who hadgone to 18 training centers in three federal states during 1980-85 showed that 63 percent of themwere employed. The second round, comprising 6,800 ex-trainees between 1982 and 1986,showed that 59 percent were employed. A simultaneous survey of 600 enterprises yielded a very

positive evaluation of the CONALEP training program.

3. OED. United Mexican States: Technical Training Project (CONALEP I). Project Performance Audit Report. 1988.Report no. 7136, p. 7.

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Institutional Development Impact

2.28 Institutional development impact has been substantial. With the civil works of the firsttwo projects, CONALEP had 252 schools throughout the country in 1996. With the help of 654staff years of specialist assistance and 76 staff months of short study tours abroad, administrativeefficiency has improved. A graduate placement system is generally effective in obtaining jobsfor graduates, and the tracer system is able to provide data regarding the work of graduates. Theschools visited had competent and educated staff, able on a short notice to organize discussionsessions, invite graduates and industry representatives, and provide data regarding the operationof their schools.

2.29 As a result of its strengthened efficiency and institutional capacity, CONALEP has beenable to implement strategic training programs. The PCR states that four innovative pilotprograms not anticipated under the loan were directed at marginal populations, micro-industry,the self-employed, and the maquiladora industries. With mobile training units, 70 low-incomegroups were trained in home maintenance and actually repaired 212 houses. Throughsupplemental courses, about 9,100 third-year trainees received special training inentrepreneurship, and 103 small businesses had been established by the time the project closed.

2.30 One important and innovative program that started under CONALEP II was theprovision on technological services to the private industry (Centros de Asistencia de ServiciosTecnol6gicos--CAST). During CONALEP II, about 30 maquiladora enterprises benefited fromtraining of in-plant trainers. The private sector finances all direct costs and a small part of theoverhead. This program has greatly expanded under the CONALEP III in about 30 areas ofheavy industry, where just-in-time high-technology updating is important. The mission observedsome current activities and interviewed three clients, who expressed great satisfaction with theservices provided. An indicator of success and client satisfaction is that training centers whichopen, are able to become profitable relatively quickly and recover their equipment investmentdespite its large cost.

Sustainability

2.31 Sustainability is likely. CONALEP enjoys strong support from politicians, businessmen,and the labor sector, and has been generally protected from budget cuts. It maintains close linksand good standing with employers, providing a good guarantee that it will remain relevant to thetraining needs of enterprises.

Recommendations

2.32 Suggestions specific to CONALEP's operations are:

a. Address the reasons students leave the program, such as the low self-esteemthat results when students leave formal education. Develop orientationsessions and seminars to discuss the issue early with students who registerfor the three-year courses.

b. Although dropout largely takes place in the first semester, more advancedstudents leave for various reasons. Diminish the dropout rate by locating

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them (though the tracer system) and encouraging them to complete theirstudies.

c. Make graduates with considerable experience (for instance, five years inthe workplace) eligible for admission to degree-oriented institutions, suchas polytechnics. (A possible policy is already under review.) In addition tohelping graduates, partly opening the door to the formal system mayprevent some students from dropping out.

d. Put more emphasis on brief and practically oriented teacher training. Allinstructors should learn specific techniques to assess studentcomprehension, encourage participation, optimize use of class time, andevaluate achievement. Teaching techniques are more important whenpersons with lower levels of education must be trained, as in the shortcourses that CONALEP has been contracted to teach for STPS.Instructional videotapes showing examples of good and poor teaching canbe used to help teachers do their job.

e. Develop a strategy to deal with the constricted vocational choices ofwomen in an appropriate cultural context. Strong vocational counseling isneeded to focus on women's decisions and reasons for doing so and toencourage them to experiment with professions of high remuneration andmarket demand. Experiments effective elsewhere, such as training andplacing women in groups for non-traditional trades could be tried.

f. Take steps to reduce the numbers of applicants to courses of study such ascomputer operation, for which the market is saturated. At the very least, ifstudents prefer to study already saturated professions, their studies shouldnot be subsidized.

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3. Manpower Training Project

Objectives and Description

3.1 The Manpower Training project was a complex and innovative project, which wasprepared on the basis of a subsector study prepared jointly by several government institutionsand by the Bank. The project financed scholarships for the unemployed and assistance formicro, small- and medium-sized businesses as well as training and equipment for administeringbodies (state employment services, training institutions). In summary, its objectives were to(see detailed description in Annex 1):

a. strengthen employment services to: (i) place displaced workers in jobsand (ii) administer short-term PROBECAT scholarships for them(programa de becas para la capacitaci6n en el trabajo);

b. assist private enterprises to upgrade the skills of employed workers;

c. upgrade STPS staff and strengthen STPS capability to manage informationand carry out policy studies;

d. increase training capacity of specific institutions so that they could providetraining to the unemployed.

3.2 The above objectives were to be achieved through the coordinated implementation offour project components:

a. The employment services and labor training component to prepare stateemployment services to place unemployed workers and administer short-term retraining scholarships for eligible persons. Selection criteria agreedgave preference to unemployed adults with at least primary education;

b. The demonstration in-service training and productivity component providedtechnical assistance to micro small- and medium-size enterprises andenabled many to utilize unemployed scholarship recipients;

c. The STPS institutional strengthening component upgraded the skills andlogistical capabilities of STPS and its staff;

d. The training institutions upgrading component provided equipment andtraining to selected vocational training institutions that served theunemployed scholarship recipients.

3.3 Total project costs for the Manpower Training Project were estimated at US$156 millionequivalent, of which US$80 million was financed by an IBRD loan. The project was approvedin October 1987 and the credit became effective immediately. It was completed in December 31,

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1992 and thus required five years and three months for completion. It was scheduled to beclosed by the end of June 1993, six months before the anticipated closing date.

Implementation

3.4 The project was essentially carried out as planned. With the exception of the number ofenterprises and training participating in mixed retraining programs (which involved preservice aswell as in-service), all key implementation indicators were met or surpassed (Annex 3). Due tothe acceleration in the implementation of the retraining program and the rapid growth of theCIMO program, disbursements were consistently ahead of forecast. Specifically, achievementswere:

Employment Services and Labor Retraining

3.5 The project had a positive impact on the state employment services. Staff were trained,and the offices acquired modern equipment and software. According to the PCR, staff becamemore motivated after training, and their turnover was reduced from 70 percent in 1989 to about15 percent in 1991. During the implementation period, state employment services served about254,074 job seekers and 247,463 vacancies per year mainly for skills-related rather thanprofessional positions. The state employment agencies administered the PROBECATscholarships and chose candidates, generally on the basis of criteria approved by the Bank.

3.6 The mission held discussions with the director and some staff of one state employmentcenter. They confirmed that training had taken place in areas such as computer use, interviewtechniques, and knowledge of rules. It was reported that tangible increases in productivity hadbeen achieved as a result of computerization of the employment data banks. Improvedproductivity meant improved services to employers as well as the unemployed. The employmentservice of Monterrey, for example, was able to place 25 percent of its applicants in jobs.

3.7 PROBECATscholarships. Recipients received the minimum daily salary for a period ofone to six months. Training was offered in three modalities: (a) classroom-based training forunemployed people who hoped to get or to start a job, (b) mixed training, where businessesrecruited apprentices without a commitment to hire and taught them in structured courses beforemaking hiring decisions; and (c) less structured, on on-the-job training provided by employerswho were committed to hiring 70 percent of the appendices. The scholarships were the core ofthe program and an issue of considerable political importance at a time of financial crisis andlarge-scale loss of income. Given the institutional capacity needed to carry it out, it was a verybold experiment, which has been honed and refined during the follow-on project.

3.8 By the end of 1992, over 293,217 unemployed workers had been retrained in over 19,939courses Evaluation data did not include a control group, and it was difficult to assess whethertrainees fared better than they would have without the program. About 60 percent of men and 33percent of women found jobs within three months. Comparison with dropouts showed, however,that trainees not meeting the program's selection criteria resulted in very low rates or return,while targeted trainees obtained benefits far greater than the costs. (See Annex of the ProjectCompletion Report-PCR.)4

4. World Bank. 1994. Mexico: Manpower Training Project (Ln. 2876-ME). Project Completion Report.

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3.9 The mission held discussions with several groups of unemployed beneficiaries, smallbusinessmen who hired them, as well as workers who received in-service training. (See Box 2for examples).

Box 2: How PROBECAT Scholarships Are Used

* A glass company uses the scholarships to hire completely inexperienced male workers andtrain them. Earlier it had to take new workers as they came, assign them to a moreexperienced worker, and tolerate inefficiency as the workers learned on the job. Withscholarship available, new students come in batches; an off-duty supervisor takes one ovenout of service and trains them for specific periods and with a specific curriculum. During thetraining period the business screens apprentices for future employment.

* A company that fabricates cables screens batches of male scholarship recipients who havelower or upper secondary education and trains them systematically. In addition to subject-matter knowledge, students learn about responsible behavior and build a relationship with thecompany. Both company officials and workers expressed a great deal of satisfaction with thetraining.

* A maquiladora company of electronics parts trains batches of female scholarship recipients.Experienced supervisors train the students. Student progress is carefully monitored, andstudents are certified regarding the tasks they can perform. With certification, it is clearwhich workers are qualified to undertake various tasks, and this maximizes efficiency.

* The social security hospital in a rural area with a large, poor, and non-Spanish-speakingpopulation used the scholarships to train traditional midwives in safe motherhood. Thewomen, who were illiterate, were brought into the hospital and trained on anatomical modelsthrough the help of an interpreter. They expressed much satisfaction with the training.

* About 40 indigenous male students in a village of Chiapas received two-month training incarpentry through a mobile unit contracted from CONALEP. Several months later, themission found that 11 of them had started a small workshop to process into simple furniturethe wood that was cut down. They had obtained tools by petitioning for a local fundingsource and were already obtaining orders. They felt they needed more training, but they werenot eligible for another scholarship.

* The women of the above village were trained in sewing while men were trained in carpentry.But they have been unable to work because they did not have sewing machines nor readilyavailable material. Some were of the opinion that they should have received sewingmachines in lieu of a scholarship.

The demonstration in-service teaching and productivity component (CIMO)

3.10 CIMO was a pilot program that was implemented in 30 regional units. It workeddirectly with over 32,304 separate enterprises and trained more than 124,182 workers through10,644 courses. Appraisal targets were 20 regional units providing service to 5,000 enterprisesand 75,500 workers through 8000 courses. The pilot proved very successful and was greatlyexpanded under the follow-on project.

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3.11 CIMO is a broker and facilitator rather than a direct provider of services. It providesmanagement consultant services and technical assistance in product development, marketing,business management, and accounting. Repeated visits by CIMO consultants help diagnoseproblems and implement plans. Training is a core activity of the beneficiary enterprises, manyof which also hire students with PROBECAT scholarships. Courses are developed specificallyfor the needs of a business, and suitable instructors are located. Businesses finance 30 percent ofthe direct cost of training. (Small businesses of the same specialty may be grouped together if noconflicts of interests arise.) The mission saw several examples of this work, such as:

* A restaurant owner who saw his clientele diminish with the economic crisis, got helpfrom a consultant to restructure operation times, the menu, and obtain feedback fromclients. He also got several PROBECAT scholarship recipients, whom he is training inan apprenticeship course to be waiters and bartenders. He found the advice satisfactory,and his business has improved.

* A paint company, which hired employees with rather low levels of education and socialskills, used training courses to teach them the basics of the work planning but also skillslike conflict resolution. It observed a significant improvement in productivity andrelations among employees. Discussions with employees indicated that they manyremembered the course content and had found it useful. Others did not rememberhaving taken a specific course.

3.12 CIMO has enjoyed support from micro, small, and medium-sized enterprises. Anevaluation study concluded that: (a) CIMO's greatest strength is the close relation it hasestablished with enterprises, and (b) the program can contribute substantially to fill some gapsin supporting enterprises. CIMO has demonstrated the ability to reach a large number ofenterprises in a short time, using a very light administrative structure.

STPS Institutional Strengthening Component

3.13 The institutional strengthening component has: (a) expanded STPS's program of labormarket surveys and studies (7 completed surveys and 16 studies) and (b) trained 1041 STPSstaff; (c) provided computers and software to the state employment service offices in statecapitals; and (d) supported the development of a computerized market information system thatbecame operational during the follow-up project.

3.14 Discussions with officials regarding this component confirmed that the training tookplace as planned and that the studies were conducted. The audit mission was able to review anumber of the studies, which show considerable technical sophistication. However, the extent towhich their findings were used to improve program delivery was not clear.

3.15 This component was also expected to develop a service to make information retrievaleasy at various levels. An example would be an information request by a small company on howto encapsulate a vitamin. The information component has not worked well. There has been littledemand for it, and updated information has been difficult to maintain. It seems like a very usefulservice, but it was probably prematurely provided.

5. Maza, Antonio. 1992. Evaluation ofSupport Mechanisms to Small and Medium-sized Enterprises in Mexico.World Bank.

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Training Institutions Upgrading Component

3.16 This component has been successful in increasing training capacity in specialties of highdemand and in new specialties and in improving the quality of training and administrativeefficiency of 445 participating training institutions and 1,374 specialties. About 134,000 traineeswere enrolled in preservice training courses, 42,647 trainees participated in in-service courses,and 24,217 participated in retraining program activities by 1991/92. The PCR states that theprogram has been received very well by the staff of participating institutions. Enrollmentstatistics showed that project-supported training institutions and programs had an 18.7 percentincrease in enrollment in 1988-91, compared to an 8.4 percent overall increase in all comparablepublic-sector institutions.

3.17 The mission visited three institutions (Centros de Capacitaci6n de T6cnica Industrial-CECATI) which train students with primary-level education and which had received equipmentunder the this component. Equipment was found to be in working order and appropriate for theneeds of courses. On one occasion only, one piece of automotive equipment was slightlyoutdated and unusable for recent models of cars. A number of instructors reported havingreceived some in-service education. In interviews, course participants indicated satisfaction withthe quality of training they were receiving.

3.18 Discussions with administrators brought to the fore problems regarding demand andsupply of training that have been difficult to resolve. The demand for courses seems related totheir perceived social status. Only the persons from the poorest families are eager to be trainedin manual work, such as building trades. The ones who have more education or are from better-off families prefer courses that are related to services rather than to harder manual labor. Sincestudents are free to choose what to study, an oversupply of service-related specialties is created,while the demand is in trades of less appeal. In effect, some PROBECAT scholarships are beingused to create structural unemployment.

3.19 This opinion of administrators was disconcerting. A basic premise of the scholarshipprogram was poverty alleviation. It appears, however, that scholarship recipients are makingchoices more closely related to an increase in social status than to maximization of income.Contrary to expected benefits as shown in the SAR, anecdotal evidence suggests that the STPSprojects are not reaching the poorest of the unemployed. However, the magnitude of theproblem has not been measured.

Instructional Delivery

3.20 STPS, the ministry implementing the Manpower Training Project, did not directly teachany courses. It subcontracted training to CONALEP and to other private and public institutions.

3.21 Since the core of the STPS project consists of training, one would have expected to findmonitoring of instruction and learning outcomes, particularly for courses given outside the directcontrol of CONALEP's in-house programs. However, the mission found that little or noattention was paid to this issue. In contrast to the attention paid to earning outcomes, the missionfound no studies dealing with training processes and outcomes.

3.22 Systematic supervision of instruction is considered obligatory in other areas ofnonformal education, such as literacy. Local STPS staff paid visits to employers' training sites

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to ascertain that the scholarship recipients were indeed there, but the quality of instruction wasnot supervised. Lack of substantive supervision in the STPS projects raises questions regardingthe curriculum and frequency with which classes actually took place in more isolated areas andinformal environments. The mission could not verify to what extent classes took place asscheduled. All visits were announced, and it was not possible to find out what the trainingenvironment would have been on a normal day.

3.23 The mission did not conclude that training was deficient, but there was evidence ofimperfection. The shorter courses observed by the mission, which catered to people lessexperienced in learning material, lacked manuals, and two instructors who were interviewedwere not clear about the curriculum they were teaching. In some sites, the mission receivedassurances that technicians who taught trainees were trained in basic pedagogy, but directquestioning produced unclear results. Some students stated that the training time (e.g. carpentryin two months) was too short for them to learn all they needed to know.

3.24 The instructional issues certainly deserved some investigation because there areimportant problems in the training of less educated and less articulate individuals. (Seerecommendations section.) Studies on such subjects have been conducted elsewhere, and onewould have expected the Bank supervision missions to request a literature review and provide itto the government. But no one knew of such efforts. Needless to say, insufficient training wouldbe expected to influence subsequent earnings adversely. It seems risky to invest so much intraining without a basic understanding of how well courses have worked and to what traininginfluenced subsequent work behavior.

Attention to Rural Areas

3.25 Though its objectives did not explicitly say so, the Manpower Training Project targetedurban areas. Only seven percent of the investment went to rural areas, although that is changingin the follow-up project; in 1996, 20 percent is expected to be directed to rural areas. Onegovernment official explained to the mission that implementation capacity of STPS in rural areaswas extremely limited, and the ministry wanted to ensure that the funds were wisely spent. Aquestion arises as to whether other agencies (such as the National Institute of Adult Education,an organization active in rural areas) could have taken on the responsibility, but apparently thisalternative was not considered earlier.

3.26 Although a mode for training people in rural areas who have not completed primaryeducation was not found, a need was clearly there. State STPS officials in Chiapas had difficultyfinding primary-school graduates, as the Bank's criteria specified. To train people who did nothave primary education under the follow-on project (Modernization of Labor Markets), thegovernment had to open a special non-Bank financed category of trainees, with much morelimited funds. During the time of the last economic crisis, the Bank did agree to finance trainingfor this category. (It was, thus, possible to offer scholarships to participants like illiteratetraditional midwives.) The Bank's criteria had been developed on the basis of general researchfindings, and it might have been wise to apply a more flexible local policy in certain areas.

3.27 Indigenous people. It has been difficult for STPS to find effective training solutions forindigenous people. Options seem limited. The audit mission found out that there were no STPSor CONALEP staff of indigenous background in Chiapas, where training of indigenous people

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takes place in several areas. It might be useful if the services of a knowledgeable anthropologistwere used and if culturally appropriate social assessments were conducted.

Box 3: Poverty Discrimination?

After careful screening, a sheet metal factory selects batches of young males forapprenticeship through STPS scholarships. By mid-1996, they had trained and hired 11 batchesof employees; for the last batch they had received 230 applications, from which they selected 30.

The selection criteria presented to the audit mission were as follows: a social workervisits the families and notes favorable and adverse factors: education level, personalitycharacteristics, previous job performance, human relations, malnutrition, living in a crampedspace, presence of a father, family illnesses (hypertension, heart disease, drinking, smoking),moral problems. Data obtained from the family are validated with neighbors. Factoryemployees emphasized that the presence of one or two adverse familial characteristics does notnecessarily disqualify a candidate.

Certainly, employers want workers who will give them the least trouble. However, thehealth and quality-of-life factors considered adverse by the factory are the exact problems ofpoverty that Bank strategy has been trying to alleviate worldwide. It would appear that Bankfunds in this case have been used not to alleviate poverty but to bypass the poorest.

Gender Issues

3.28 PROBECAT scholarships were given to the unemployed according to the wishes ofemployers. Gender was found to be inextricably linked to hiring decisions. Eight of tenemployers interviewed by the mission expressed clearly stereotyped views regarding the workmen and women are capable of doing and clear gender preferences. (Exceptions were arestaurant and a public hospital.) They hired women as sewing machine operators, assemblers ofsmall electronic parts, secretaries, waitresses, quality-control inspectors. They hired men formost other areas, particularly work that involved manipulation and repair of machinery, exposureto heat, and lifting weights (even light weights). For example, a company that made cablesobtained PROBECAT scholarships for groups of males who would operate equipment and liftsmall rolls of cables; they had never tried women for the job, but were of the opinion that womenwould not be as good. A glassmaking company only hired men for production and women forquality control.

3.29 Women's vocational choices were found to be very limited. Scholarship recipientslargely expressed the desire to study traditionally female areas. Women interviewed by themission stated lack of interest in the more male-oriented fields and inE ility to find a job in them.There have been several cases of women studying specialties such as refrigeration, lathes, andmachine repair, but they were exceptions. For example, a widow whose husband had aworkshop was trained to operate it. In areas like Oaxaca, where many men migrated to the US,women had to take over the more traditionally male jobs, and STPS staff reported several incarpentry and plumbing.

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3.30 As a result of choices and hiring patterns, a great deal of women's training has been insewing. In addition to garment industry jobs (which offer very low salaries), STPS andCONALEP staff felt that if poor women could sew, they could sew the clothes of their familiesas a cost-saving measure and also make items for sale to tourists. But is this what happens infact? Most women do not have sewing machines, ready-made clothes are relatively cheap, andthe cost of material may leave women little margin for savings or profit. Furthermore, it isunclear whether women learn to sew items that are salable. The mission observed trainingprovided by CONALEP mobile training units in Chiapas to young, rural, indigenous women whowear traditional costumes. They were learning to sew western-style blouses. The teacherexplained that they already knew how to make their indigenous clothes. But then what waspurpose of the training? If it was income-generation, where was the relevant training? In anearby market, many women were selling indigenous clothes to tourists, and the ones who knewbetter to approximate the tastes of the tourists could earn more. But trainees did not learn how torefine their traditional skills for market use, nor did they learn marketing strategies. Clearly, theincome-generation potential of sewing needs much study, which has not been conducted.

3.31 Indigenous women living in their traditional environments were found to face particulardifficulties in obtaining training, given: (a) their low levels of education, (b) limited income-generation options in their native environment, and (c) the rigid occupational gender segregation

6that traditional societies tend to impose on their members. A large issue arises: should thesewomen be trained for occupations of low earnings in a monetarized economy or should they betaught nutritional and productivity skills (such as home canning of vegetables) in order to feedtheir families more effectively? Answers are difficult to come. There are many in Mexico wholament the demise of indigenous societies and the conversion of Indian women into servants forthe houses of the better-off. Neither the audited project nor its follow-up have yet dealt withthese issues.

Benefits and Risks

3.32 The benefits of the Manpower Training project, as anticipated in the SAR, were: (a)reduction of human resource constraints to growth through adaptation of trained manpower, sothat supply can meet demand; (b) increased training opportunities and more equitable access totraining and employment across regions and social strata through provision of expandedretraining for the poorest of the unemployed (including 27 percent of women); and (c) higherproductivity and product quality in the formal economic sector through an increased supply ofskilled workers.

3.33 Certainly, the project has done much to match supply of trained manpower with demand.However, the benefits expected for the poorest of the unemployed, particularly women, have notmaterialized. The urban focus of the project and its criterion of primary-school education meantthat the project could not serve the poorest segments of Mexican society.

3.34 The risks of the Manpower Training project, as anticipated in the SAR, were: (a)government inability to finance counterpart funds; (b) change of government priorities; (c)

6. Work performed by the men of a community is often seen by women as undignified and unfeminine, and womenwill do it only as a case of last resort. Poor, less educated people are more likely to have rigid gender stereotypes andto discourage, ridicule, or harass non-conformists (Martin, M. Hard-Hatted Women. Seattle, Washington: Seat Press,1988.)

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failure of graduates to find productive employment, and (d) failure to reach an adequate numberof employers. The risks did not materialize. The project and its successor have enjoyed broadgovernment support, and employers have taken advantage of the benefits offered to them.

Outcomes

3.35 On the basis of the PCR data and sample visits by the mission, the project is consideredto have met its objectives, and its performance is considered satisfactory. It succeeded instrengthening employment services at the state level; assisted small private enterprises toupgrade the skills of their workers, although the extent to which this was accomplished waslimited vis-i-vis existing needs; strengthened the market monitoring capability of STPS; andupgraded institutions that provided training in critically needed specialties.

3.36 Project outcomes, however, are quite ambivalent. The PCR provides an impact study ofparticipation in the PROBECAT program,' which was the most important component of theproject. The study found that:

a. compared to a control group, trainees on average tended to find jobs morequickly; participation in PROBECAT reduced the mean duration ofintervening unemployment spell by 2.5 months for males and by 1.9months for females. The strongest effects are for trainees over the age of25. (However earlier studies showed that only about 35 percent worked inoccupations related to their training.)

b. Male trainees are more likely than untrained males to be employed in theshort term (i.e. three and six months after training than controls), but theeffect does not persist after a year.

c. Female trainees with work experience are more likely to be employed three,six, and twelve months after program completion as compared to controls.Those without prior experience are less likely to work, and the programappears to draw in a number of women who would have otherwiseremained outside the labor force.

d. Male trainees are more likely to find work in large firms than comparablecontrols. Larger firms are known to offer higher salaries and betterbenefits, and women are less likely to work for large firms.

e. Training increases the monthly earnings of male trainees, but this effect islargest for males with 6-12 years of schooling. Training does not appear toraise the monthly earnings of women.

f. The monetary benefits of training outweigh the costs of the PROBECATprogram for certain groups of trainees. For males over age 25 with priorwork experience, the benefits of participation outweigh costs within three

7. "The Impact of Mexico's Retraining Program on Employment and Wages." In Mexico: Manpower TrainingProject. Project Completion Report. no. SexM9418, January 5, 1994.

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months of starting employment. For all other males, benefits outweighcosts within one year. For women younger than 25 and without prior workexperience, the costs outweigh the benefits.

3.37 Earlier evaluations (e.g. Fields 1990) argued that the program does not produceoccupational upgrading. Most people were found to work at the same level before and aftertraining, but there seemed to be an overall increase in salaries. Self-employment was generated,but to a limited extent. The project may have indeed given many of its scholarships on peoplenot ready to enter the job market in the short term; 68 percent of those who were not workingwere students or housewives. The recommendation from this finding was that such peopleshould be prevented from getting scholarships. However, this policy may be short-sighted;women may enter the work force once their children are grown or when their financialconditions deteriorate. To prevent them from training at a time when they are not ready to enterthe job market may prove detrimental to their well-being in the long run.

3.38 The benefits and sector strategy sections in the Manpower Training project raisedexpectations for attention to the very poor who, however, were not clearly targeted in theoperation. Did the project alleviate poverty among its beneficiaries? Two Bank-financed studiesconducted in 1990 and 1991 concluded that it did. The trainees earning the least made the mostand largest income gains, while those earning the most actually suffered income losses.8

However, this finding appears to be an artifact of statistical analysis, called regression towardsthe mean,9 and it cannot be stated with confidence that the training had a poverty alleviationeffect. If it is true, as Fields (1990) states, that "this is the strongest evidence available that thetraining program has had a beneficial effect in reducing poverty in Mexico", the evidence is veryweak, indeed.

3.39 Ambivalent outcomes have been found in government-financed vocational training10

projects of other countries, particularly when the trainees are unemployed. But it is prematureto attribute the ambivalent findings to an ineffective methodology. It is possible that instructionfor the short, less formal courses was deficient or even nonexistent. Since learning processes andoutcomes were not monitored in Mexico, it is impossible to ascertain where the process wentwrong. It was unfortunate that the Manpower Training project and its follow-on have notobtained the data that would help clarify this issue.

3.40 Outcomes of the CIMO program. A case study of 30 enterprises participating in theprogram concluded that enterprises had indeed increased productivity, better access to markets,and had better labor conditions and organization. An important lesson that CIMO learned was

8. Carlson, Samuel. 1991. Mexico Labor Retraining Program: Poverty Alleviation and Contribution to Growth.Latin America and the Caribbean Technical Department: Regional Studies Program, Report no. 6, World Bank,Washington, DC.

Fields, Gary S. 1990. Mexico Manpower Training Project: Further Evaluation Findings. Internal Bank Document1990. Vol. 4, Loan 2875 project file (p. 17).

9. Cook, T. and D. Campbell. 1979. Quasi-Experimentation. Rand-NcNally. Multiple measures of income would beneeded to determine a true effect, given the tendency of employment instability among poorer Mexicans.

10. Zabalza, A. 1996. Is There a Case for Government Intervention in Training? Human Capital DevelopmentWorking Papers no. 65, March 1996. Higher levels of education seem more useful in obtaining gainful employment."Training and Jobs: What Works?" The Economist, April 6, 1996.

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that training must be given exactly in the areas of need. Generic pamphlets and seminars seemineffective in training people.

3.41 One accomplishment of this component is that it has helped change the attituderegarding training among its beneficiaries. Whereas many small businessmen found it ofquestionable use earlier, they were convinced of its utility when they saw results. One smallbusinessman even said that the entire company strategy has changed since they realized thebenefits of training. Much more investment is now directed in this area.

3.42 One drawback of this effective and innovative component is that it can only helprelatively few businesses. Of the approximately 380,000 businesses in Mexico, the ManpowerTraining project could reach about 5000 and the follow-up project could reach another 10,000.The service provided to the country does not even reach five percent of the potential demand.The program was meant to demonstrate the utility of training and consultation rather than reachbusinesses nation-wide. However, it appears that much more needs to be done before ademonstration effect can be realized on a national scale. As it proves its effectiveness, it isunclear how to expand it without creating a large bureaucracy.

Sustainability

3.43 Sustainability is likely. Through its institutional development components theManpower Training project has touched hundreds of thousands of beneficiaries. It is probablytoo early to ascertain whether the achievements of the Manpower Training project and its follow-up project will be translated into sustained economic development.

Institutional Development

3.44 The audit agrees with the PCR that institutional development impact has beensubstantial. Several project components strengthened institutional development at the federaland state levels through staff training, labor market information systems, 16 labor market studies,capability to search for jobs and place the unemployed, and upgrading of training institutions.

3.45 The Manpower Training project was quite complex and innovative. It built aninstitution and at the same time provided services to a large and disparate number ofbeneficiaries and businesses. The fact that this project was executed ahead of schedule and didreach a large number of beneficiaries is compelling evidence of the institutional developmentthat some government agencies have undergone.

Recommendations Specific to STPS Operations

a. Given the ambivalent effects of the PROBECAT scholarships and thedifficulties of government-financed training world-wide, the issue arises asto whether the large numbers of scholarships given to the unemployedshould continue. In the follow-up projects, it might be more cost-effectiveif scholarships were given only to persons who found potential employerswilling to train them.

b. To safeguard the investment, the learning process and outcomes must bemonitored. STPS should study and supervise instruction much more

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closely and search for modes of delivery such that the less educatedpopulation can remember the material. Issues to study could be:

* How best to impart psychomotor skills to people of relatively loweducation and low verbal ability? What percentage should be donethrough verbal means?

* What training is found to actually change behavior? How effectiveare the frequently used verbal means of training? When people saythey do not remember what they studied, does this mean that they didnot change their behavior?

* What behavioral change does an extra course (like the man financedby the project) produce among educated ministry staff, who havealready taken many short courses?

c. To increase the benefits that women obtain from project opportunities,STPS could: i. use scholarships as incentives to get groups of women intomore professions and thus combat gender discrimination; ii. study theincome-generation effects of the typically female occupations, and iii.study the international literature on non-traditional employment for womenand experiment with successful examples.

d. STPS should focus more on the needs of the rural poor, as already planned. Tounderstand better the needs and vehicles for reaching the indigenous people,anthropological approaches should be used and social assessments should beconducted.

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4. General Finding, Issues and Lessons

Borrower Performance

4.1 In both projects, borrower performance was satisfactory. CONALEP proved proficientin project planning and implementation and showed competence in project management, despitea slow-down period at a time of large-scale government change. All components wereimplemented efficiently and effectively, and (according to the PCR) appropriate staff weredeployed as necessary. The Manpower Training project was implemented by a highlycompetent, enthusiastic, and hard-working management group. Its components were executedand completed ahead of schedule, and outcomes were studied extensively. The excellentimplementation performance of this complex project attests to the exceptional quality of theSTPS management at all levels. It was significant that the project enjoyed strong support by thegovernment, and its procurement needs were fulfilled on a priority basis, enabling staff toconcentrate on the substance.

Bank Performance

4.2 For both projects, the Bank's performance was adequate during project appraisal andsupervision. Communications between Bank and counterpart staff were quite open and positive.There was considerable staff continuity throughout the years, which facilitated implementationof the difficult and complex Manpower Training project. However, supervision time was limitedfor projects of such magnitude. CONALEP II received only 12 supervision missions in sixyears, averaging only 6.2 staff weeks in the field every year. The Manpower Training projectreceived more attention. Eight supervision missions were conducted, which consisted of 2-5members for about two weeks in the field.

4.3 The PCRs describe the Bank as having played a facilitating rather than a leading role insupervising these projects, in part because the implementation units were very competent.During supervision, staff largely worked with counterpart officials in central offices and maderelatively limited field trips. For example, no STPS or CONALEP official in San Crist6bal delas Casas in Chiapas recalled having received a supervision visit from a Bank mission. BankStaff involved in the projects were of the opinion that the Bank's fiduciary role is often so time-consuming that it gets in the way ofsubstance. The concentration on procurement and researchissues may have contributed to the lack of understanding regarding the inadequate effects of theprojects on the poor and the women.

4.4 Government officials expressed satisfaction with the services the Bank had provided inthe supervision of the two projects as well as with the quantity and quality of its staff. However,they expressed dissatisfaction with the recent rate of staff changes and a strong desire tomaintain task manager continuity. It takes task managers a while to learn the complexities of theproject and the country, and counterparts must make extra effort and time to debrief them. Theyfind it counterproductive to start with a new task manager every three years or so.

4.5 Although, the Bank's performance in the implementation of these two projects is ratedsatisfactory, the mission identified important issues with respect to the Bank's sectoral strategy.These are discussed in the next section.

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Findings and Issues

Women's Employment Difficulties Were Neglected

4.6 As early as 1990, Bank studies showed that PROBECAT scholarships did not improvewomen's earnings and employment prospects, in part due to gender discrimination practiced byemployers. This was particularly important in light of the fact that gender discrimination in mostcases is illegal according to the labor law of Mexico.II Given the Bank's commitment towomen's welfare, one would have expected Bank supervision missions or the follow-on projectpreparation to remedy the problem. In light of the operational directive on gender dimension ofdevelopment (OP 4.20), the Bank had options, such as:

* obtaining expertise by inviting women-in-development specialists on mission,who could advise on applying in Mexico innovative approaches that haveworked elsewhere; 12

* setting aside scholarships to hire women in jobs stereotyped for men and usethem to encourage employers to find out women can do the work;

* deciding not to finance scholarships for persons chosen by discriminatingemployers, just as the follow-on project decided not to finance scholarships forpersons without primary school diplomas. The government would thenfinance gender-segregated scholarships from its own budget, if it chose, as itchose to finance them for persons without primary education.

4.7 Instead, no actions were taken. No lessons even appeared in the PCR about thisproblem. The SAR of the follow-on project included a reference to the need for removing labormarket barriers for women (p. 47 para. 3.35) and planned an investigation into the issue(Annexes 1 and 5.4). Four years into implementation, however, no progress had been made onsuch an action plan. The audit mission discussed the problem with STPS management, andconsiderable interest was shown in finding solutions. Subsequently, STPS proposed a plan ofaction to an April 1996 supervision mission. By then, however, Bank proceeds had been used toperpetuate discriminatory and possibly illegal hiring practices for nearly a decade.

4.8 The women's employment problems in the project highlight a dilemma. Is it acceptablefrom a development perspective to finance scholarship schemes that involve clear genderdiscrimination and practices that keep women at the bottom of the income scale? One can arguethat Mexico's financial crisis was so large, that discrimination against women has been a low-priority issue. Is this, however, a valid argument for a development institution that prides itselfon its attention to women's issues?

11. "Queda prohibido a los patrones: Negarse a aceptar trabajadores por raz6n de edad o de su sexo." Article 133 (I),Ley Federal del Trabajo, I Ia. Edici6n Actualizada, Secretaria del Trabajo y de Previsi6n Social, November 1994.Exceptions are made for pregnant women in certain dangerous professions and nightly industrial work.

12. It has been found, for example, that women can be trained and work in traditionally male occupations if they arekept in groups and if they feel protected from male harassment. (Abadzi, H. Nonformal Education for Women inLatin America and the Caribbean: Solving the Mystery of the Unreported Trainees. ESP Discussion Paper Series no.19, February 1994.)

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4.9 According to OP4.20, the Bank is to assist its member countries to design gender-sensitive policies, modify legal frameworks to improve women's access to assets and services,and finance programs for women. Should the Bank also do the reverse, that is refuse to financeprograms that involve gender discrimination? High-level decisions are needed.

Technical Expertise Was Limited

4.10 CONALEP II was appraised and supervised by vocational educators. The ManpowerTraining Project and the follow-on projects in recent years, however, were mainly prepared andsupervised by economists. Although the crux of the Manpower Training Project wastransmission and elaboration of information (sometimes to people of limited education, who facespecial constraints) no specialist in adult education was involved in the projects. Lack oftechnical expertise in the Bank missions was matched by lack of expertise among STPS staff;The mission did not meet an STPS staff member with educational expertise.

4.11 Management by economists resulted in much emphasis on external efficiency issues andnone on internal efficiency. The project was operated as if training was perfectly efficient andneeded no monitoring. Inattentiveness to learning outcomes has made it impossible to link causeand effect in studying earnings outcomes. One wonders whether the Bank has financed projectsin any other sector with so little sectoral expertise.

The Social Sector Strategy Was Inadequate

4.12 The Bank appraised five vocational-technical education projects before any other social-sector projects were implemented. To justify its largely urban industrial and services orientedoperations, the Man ower Training Project SAR promised in 1987 poverty-oriented action inseparate operations.

4.13 There is certainly nothing wrong with a series of projects that catered to the lower-middle classes of urban areas in Mexico, if other interventions catered to the poor. But thepromised complements did not materialize until 1992, when a primary education project becameeffective (Loan 3407-MX). This delay was not without consequences. People in the poorerareas, who lacked more effective access to education, did not have the minimum qualifications tobenefit from the vocational projects; as mentioned earlier, STPS had difficulty findingadequately educated people for PROBECAT scholarships in states like Chiapas, the site of the1994 Zapatista insurgence. One justification for the training provided to young people byCONALEP was the country's high population growth. It would seem, therefore, that apopulation project (or component in a health project) could have been prepared in conjunctionwith CONALEP projects. The paucity of needed social interventions calls into question thewisdom of implementing the vocational projects without support from other operations.

13. The section on Bank assistance strategy (Manpower Training project SAR, p. 8) states that: "Separate operationsare anticipated to strengthen adult education and training in rural areas... The on-going and proposed operationsdescribed above, combined with anticipated studies of agricultural training and adult education (within a more generalappreciation of the entire education sector) and substantial sectoral training components included in other operations(in agriculture, transpor, industry) would reduce human resource constraints in Mexico on a broad front and would bean essential comp!cmernt to al array of Bank-assisted projects aimed at economic restructuring and policy reform."

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4.14 Why did the Bank invest so little in the social sectors in Mexico until the 1990s? Thedeficiency seems to have resulted from an interaction of government and Bank priorities at thetime. Mexico, a large oil-producing country with a problematic economic history, preferred toborrow only for structural adjustment and infrastructure, and the priority of the Bank was to help

'4the Mexican economy recover and invest in sectors that produced growth. Poverty issues werenot viewed as important at that time, a position that later engendered criticism against the Bank.Furthermore, like many other countries, Mexico did not want to borrow for primary education.One explanation given to Bank staff by some government officials was that their constitutionprohibited borrowing for projects that were not directly productive. (A few years later, however,the constitution was reinterpreted.) The Bank wanted to develop a good working relationshipwith Mexico and respected the government's priorities. At the same time, Bank staff (whosenumbers and specialties were sharply reduced after the 1987 reorganization) were concernedwith some practical difficulties in investing in education, such as the special interests of thepowerful teachers unions.

4.15 As a result of these factors, the Bank did not show as much leadership as it could have inthe social sectors. It emphasized the economic aspects of the projects and monitoredproductivity and neglected issues of women, the rural poor, and the indigenous populations.Worse, some Bank financing has been used to bypass women and the poor for employment(examples in Boxes 2 and 3). It can be argued that Bank acted much like a commercial bank,with an interest in the economic viability of its investment, and without the poverty alleviationconcerns that a development Bank should have. The "facilitator" role that the PCR ascribes toBank performance can be interpreted as attention to short-term implementation events ratherthan the larger social issues of the projects.

4.16 Could the Bank have held a more focused dialogue on the social sectors circa 1987?Although the government independently decided to carry out structural adjustment, Mexiconeeded the Bank's help; dialogue has achieved much in other countries. India, for example, didnot want to borrow for primary education until 1993 and had three vocational-technicaleducation projects appraised in 1989, 1990, and 1991. At the same time, however, five IDA-financed projects focused on family welfare, nutrition, population, and indigenous populations.Although political and economic conditions may differ vastly, poverty-oriented strategies werebeing agreed with other large and reluctant borrowers the same time that the Mexico vocationallending program was developed.

4.17 The Bank's insistence on social-sector interventions seems to have paid off, andMexico's social-sector strategy has become markedly reoriented in recent years. Both thegovernment and the Bank have refocused on poverty and have set the stage for severalinnovative projects targeting the poor through education, health, and agriculture. But one cannothelp but wonder whether earlier implementation would have brought greater cumulative gains tothe population. This question brings some difficult issues to the fore that have not been resolved.It also brings to the fore unpublished OED research findings, which show that the Bank tends tohave less influence in larger countries. How intensive should dialogue be with governmentsabout social sectors? Should adjustment lending be conditional on a satisfactory social-sectorpolicy? What combinations of lending instruments, staff specialties, and dialogue patterns mustexist so as to maximize the poverty alleviation? These questions require high-level answers.

14. OED Study of Bank/Mexico Relations, 1948-1992. OED 1994.

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Lessons

* Studies of women's earnings and calls for action plans may be insufficient to bring aboutimprovement. Expertise, persistence, follow-through, and dedicated time duringsupervision missions are also needed.

* Projects that require a minimum level of education may be implemented most effectivelythrough the support of operations that provide the poor with the required education.Projects which have minimum educational requirements are not likely to reach thepoorest of the poor, who lack the requisite level of education.

* The economic viability of vocational education projects is likely to suffer if they aredeveloped and supervised with scant technical expertise. Economists must work closelywith technical experts.

* Terminal diploma courses in many countries suffer from low quality and low studentdemand. However, the success of CONALEP shows that it is possible to deliver qualityeducation to large numbers of students. Implementing agencies must create a positiveimage for students and effective linkages with local enterprises.

* Indigenous groups may be difficult to reach through projects designed for the generalpopulation. Anthropologically sensitive methodology and social assessments would beneeded to maximize the benefit these groups can receive from Bank investments.

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Annex 1

Manpower Training Project-Objectives and Design

1. The objectives of the project were to:

(a) strengthen employment services provided at the state level andimplement, as a transitional measure during the restructuring process, anexpanded and improved retraining program for the displaced andunemployed workers, using existing training institutions;

(b) assist private enterprises, especially small-medium enterprises in prioritysectors and geographical areas to upgrade the skills of employedworkers by introducing a pilot demonstration, promotion, and assistanceprogram for in-service training;

(c) strengthen the Secretariat of Labor and Social Welfare's (STPS) labor-market monitoring capabilities by upgrading of staff, improvement of itsinformation system, and carrying out policy studies aimed at guiding thefuture development of the training system, and:

(d) increase training capacity in critically needed specialties by upgradingselected public and private training institutions through the provision ofcomplementary equipment linked to a commitment by participatinginstitutions to improve training operations and facilities maintenance.

2. The above objectives were to be achieved through the coordinated implementation offour project components:

(a) The employment services and labor training component was designed to(i) improve and expand employment services through the training of 400staff and by financing data-processing equipment and related technicalassistance; (ii) strengthen the planning, content, and implementation ofSTPS's retraining program (PROBECAT) as a transitional measure andestablish systematic arrangements for monitoring and evaluation of theprogram's effectiveness; and (iii) provide improved retraining for about160,000 economically disadvantaged and displaced or unemployedworkers over 4.5 years, including financing of trainee stipends to beawarded in accordance with criteria agreed with the Bank (emphasis onunemployed adults with at least primary education);

(b) The demonstration in-service training and productivity component wasto introduce on a pilot basis a system for promoting and supporting in-service training and related services among enterprises, especially small-medium enterprises in priority economic sectors and regions. Thecomponent included measures to: (i) establish within or linked to

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Annex 1

selected association of employers, 20 small regional in-service trainingpromotion units. The 20 promotion units were to target specifically5000 small-medium enterprises (out of a total of about 400,000 in theMexican formal economic sector). A small central support group, calledcentral in-service training promotion unit was to be established in STPSto coordinate the program. All units services were to be provided byconsultants contracted for a fixed term. Loan funds would finance theprogram on a declining scale to encourage efforts to make the programself-financing through gradually increasing charges for advisory andtraining services; (ii) provide direct support for the organization anddelivery of intensive, short-term training for about 75,500 employees inthe 5000 targeted enterprises; and (iii) initiate promotion services for in-service training in these enterprises through dissemination ofinformation on the labor market, productivity issues, and trainingopportunities to 20,000 additional small-medium enterprises employingabout 800,000 workers;

(c) The STPS institutional strengthening component was to strengthen STPScapabilities by: (i) upgrading about 100 staff of the Secretariat in areasof program design and evaluation, labor market analysis, andproductivity issues; (ii) developing improved labor market informationsystems at the federal and state levels, including computerization andrelated training, and (iii) undertaking priority studies; and

(d) The training institutions upgrading component was designed to enhancethe capacity and utilization of existing training institutions by providingfinancing to some 500 training providers (later changed to 1000 trainingprograms) for modernization or upgrading of equipment in existingfacilities. Participating institutions were to be selected on the basis ofagreed criteria, including a record of having provided efficient servicesin the past, and commitments to upgrading of curricula, implementingmaintenance programs, and securing competent staff.

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Annex 2

Project Results: CONALEP H (Direct Benefits ofProjectfor Total CONALEPSystem)

Estimated at appraisal Actual benefits

CONALEP I andfI CONALEP I and HCONALEP II combined CONALEP II combined

Civil Works

Training centers 97 219 130 252Mobile training units 4 4Units under construction 15 15

Furniture, equipment andmaterials

Purchased (%) 100 100 100 115Installed (%) 100 100 100 96

Students and Instructors

Students Enrolled:Regular Programs 72,000 160,000 85,682 173,682Up-grading Program 18,000 40,000 43,466 65,466

Totals 90,000 200,000 129,148 239,148

Instructors:No. Employed 7,500 16,700 6,050 12,770No. of Hours/Week of (10) (12-14)Teaching

Receiving pedagogical 10,000 27,695training

Efficiency and outputs

Completion rate % 78 52

Annual outputs

Technicians and skilled 21,600 48,000 13,982 40,382workers (3-year programs)Worker upgrades 16,200 36,000 21,140 40,950

Totals 37,800 84,000 35,122 81,332

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Annex 3

Project Results: Manpower Training ProjectEstimated at Actual Accomplishment actual

Indicator appraisal (12/31/92) divided by estimate %

A. Employment Services and Retraining

1. No. of State employment agency' 400 953 238.3staff upgraded

2. No. of Trainees awarded stipends and trained 160,000 293,317 183.33. No. of trainees participating in follow up 8,000 7,739 96.7

study4. No. of training centers used2 615 741 120.55. No. of courses conducted 8,000 19,939 249.26. No. of enterprises participating in "mixed"'3 2,160 1,078 49.9

retraining courses7. No. of annual surveys of expenditures on 4 5 125.0

"mixed" retraining courses8. No. of trainees awarded stipends for "mixed" 24,000 14,148 59.0

retraining coursesB. In-service Training

1. No. of promotion unitS4 operating 20 30 150.02. No. of training courses conducted in 8,000 10,644 133.0

institutions3. No. of workers trained by institutions and in- 75,000 212,380 281.3

plant4. No. of enterprises participating in training 5,000a 77,668 1,553.45. Annual survey of expenditures on in-service 4 5 125.0

training under the project by participatingenterprises

6. Enterprises reached through seminars and 20,000 31,211 156.1other outreach services

C STPS Institutional Strengthening1. No. of STPS staff upgraded 100 1,041 104.12. Improved manpower information I 1 100.0

system operating3. No. of studies 1 17 1,700.0

D. Upgrading of Training Programs1. No. of traininf programs selected 1,000 1,374 137.4

for upgrading2. No. of pro rams receiving supplemental 1,000 1,374 137.4

equipment1. State Employment Service; 2. Annual average; 3. Retraining under cost-sharing arrangements with enterprises4. Regional in-service training promotion units.a. Many enterprises and workers participated in more than one consecutive training activity. The number 212,380 represents thenumber of trainee courses; the actual number of individual workers who participated was 124,182. The number 77,668 is the totalnumber of training activities with enterprises; the number 32,304 is the actual number of individual enterprises.b. Pursuant to an amendment to the Guarantee Agreement, dated April 24, 1990, these indicators were modified from a target of500 training institutions to a more relevant target of 1,000 training programs (specialties). This became necessary because manytraining institutions were justifiably provided support for more than one program or specialty, in one or more locations, byparticipating in more than one annual phase of the program.

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Unofficial translation

General Directory of Employment

Mexico, DF, June 13 1996

Mr. Roger Slade, ChiefAgriculture and Human Development DivisionOperations Evaluation Department

We thank you for the Mexico Performance Audit Report on Manpower TrainingProject, undertaken by Ms. Abadzi last March. We found it serious and a high qualityevaluation showing a good comprehension of the Project implemented by the Ministry ofLabor.

In relation to the specific comments to the PCMO, I would like to say thefollowing:

a) After the beginning in 1995 of a new operating modality of the TrainingFellowship Programs oriented towards the support of local initiatives of employment, wehave been able to substantially increase the attention to groups of rural indigenousproducers and of marginal urban zones.

b) The Program of Integral Quality and Modernization (CIMO) is increasing itsattention to microproducers of the rural sector, including some groups of indigenousproducers.

c) In relation to the lack of qualified technical personnel in educational aspects, it isimportant to point out that the training services contracted by the PROBECAT and byCIMO come from qualified training providers. Nonetheless, an effort will be made toimprove the curricular content of the training.

d) We found very interesting the proposals to promote the hiring of women in non-traditional positions through the training fellowships.

e) During the current design process of the next operative phase of theModernization of the Labor Market Project (PMMT), it is being considered theintegration of CIMO and PROBECAT activities in support of the local employmentinitiatives in order to improve the quality of the support given to the population andproducer groups that are more disadvantaged economically.

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Thanks for the opinion given about the capabilities of the staff of the Ministry ofLabor to conduct the PCMO, currently the PMMT.

I thank you again for this valuable document that will help us to improve thedesign and implementation of the PMMT.

Director General

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Annex 4

NATIONAL VOCATIONAL AND TECHNICAL EDUCATION SYSTEM - CONALEP

SecretariatAdministration of World Bank Credit

Metepec, State of Mexico, June 19, 1996

Ref: ACBM-347-96

Roger SladeChief, Agriculture and Human ResourcesOperations Evaluation DepartmentWorld Bank

Dear Sir:

Following your letter received here on June I1, I have been instructed to attach ourcomments on the draft Performance Audit Report for the Second Technical Training Project(Loan 2559-ME) for consideration in the final version before it is transmitted to the Bank'sExecutive Directors.

Yours truly,

Is/ Ver6nica Galindo GalindoAdministrator, World Bank Credit

cc: [see original]

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Annex 4

COMMENTS ON THE PERFORMANCE AUDIT REPORT FOR THE SECONDTECHNICAL TRAINING PROJECT (2559-ME)

Para. 8 on p. 16 notes that the mission was not clear how the instructors were trained orwhy the students did not use the instructional materials.

CONALEP has constantly striven to produce teaching aids for use by instructors andstudents; this task is expanding, to the extent that 105 disciplines are now covered, each with adozen different courses, in which some 200,000 students are enrolled and slightly more than14,000 teachers are employed.

The quality of instruction depends largely on the proper preparation and skills of theteaching corps; as such, instructor training includes introductory courses to the practical aspectsof teaching and systematization of those aspects for those instructors who are part of the system;courses in classroom technique, a creativity workshop, formulation of texts for home study,technology training, courses in new technology and operation and maintenance of machinery andequipment for all teachers who have worked steadily with CONALEP.

The courses capitalize on written and audio-visual materials, designed by professionals(exprofeso), including educational software. The specialists who give the courses can beinternal (teachers or academic coordinators from each school) or external (universities,production sector, etc) and/or equipment suppliers. The training provides the instructors with thenecessary foundations for using the teaching materials designed to aid in the teaching/learningprocess. Efforts to foster use of the instructional materials in the classroom are an ongoingprocess.

With regard to the statement that the instructional materials are not used by the studentsand that all instructors dictate material to the students, this is a very wide generalization,especially as it is based on observation of two teachers and 30 students (two classes, one at SanNicolds de los Garza [?s] 1 in Monterrey and the other in San Crist6bal de las Casas in Chiapas),in view of the numbers of students and teachers indicated above.

Moreover, the instructors have the freedom to rely to varying extents on the plans andcurricula designed for each course of studies and subject; there is no requirement to use thematerials produced by CONALEP exclusively; they can be used as supplementary aids or as theprimary source.

On p. 17, para. 11 it is asked why graduates cannot go on to higher levels of study.

In accordance with the decree establishing the National Vocational and TechnicalEducation System, CONALEP offers post-secondary terminal studies. Its graduates are mid-

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level technicians, in other words, skilled human resources who are somewhere between skilledlaborers and university-trained professionals.

Developing countries seek to make most efficient use of and maximize its resources intraining skilled personnel; educating professionals requires a [illegible] investment. Thedifference between a mid-level technician and a professional, both seen as a finished product,represents a [illegible] margin of [illegible] years of post-secondary educational investment intraining. A skilled technician has a more rapid investment cost recovery than a professional, aswell as greater possibilities of being self-employed than a professional.

Additionally, because technicians have to undergo continuous training and updating,CONALEP offers courses in new and specialized technology at its CAST centers, which providea vertical option for graduates.

Lastly, the students take a set of courses called the "basic system" which, like the openbachillerato system, can be revalidated as pre-university training.

The following comments relate top. 17, para. 13, regarding the participation of womenin job-oriented training programs:

In traditional countries with deep-seated cultural roots and developing economies, womenare economically dependent, because tradition has it that work related to maintaining the home isnot considered productive and is not remunerated. It is considered a "simple activity" that "doesnot require much physical effort."

Mexico is a multi-ethnic, tradition-bound developing country and, as such, women havemade much more headway in the urbanized areas and cities than they have in small urban andrural communities. After considerable economic development, a middle class emerged in thecities and stimulated the demand for political and social changes that enable women to work withmen on virtually an equal footing in the development of the country. However, this is a recentphenomenon; [women] have had the right to vote for less than 50 years.

The first area targeted by women as part of equal rights was education, perhaps this isbehind the emergence of the large numbers of mixed schools. But although co-ed schoolspredominate, this does not mean that there are not exceptions or that in all of the mixed schoolsthe enrollments of boys and girls is balanced. The larger urban areas tend to be relativelybalanced at given educational levels. However, the further the schools are from the cities, thegreater the imbalance within educational levels.

As education level rises, the gender imbalance in enrollments is reflected in theemployment-oriented education choices and the vocational preferences or determinants in eachcase. Tradition and vocation within the family and community virtually oblige women to opt for

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training that prepares them for their future social role and is more compatible with their physicalstrength. Until recently, women tended to study disciplines in the area of health, administrationor services; it was rare to find a woman in the construction, extractive or related industries, or tobe training for a career in those areas. It was unthinkable that a woman would study automotivemechanics, metal mechanics, forging or molding. Nevertheless, nowadays women are employedin all sectors.

CONALEP does not plan its instruction in response to the gender of demand; it seeks totrain human resources in accordance with the requirements of the regional and nationalproduction apparatus, providing a wide range of educational options with a certain degree ofrelevance to the labor market, which is open to all.

It is not the schools, which train the pool of human capital, that have any regulations,laws or provisions whatsoever restricting the participation of women in their area of interest.Rather, these constraints are shaped by culture, vocation, tradition and social environment. Theyinfluence a person's decisionmaking, as distinct from objective reasoning that focuses onwhether the intended area of study is compatible with self-employment, is over-saturated on thelocal labor market, etc.

Significantly, only the Third Technical Training Project focuses on to the needs ofwomen, but only in a very cursory manner, referring solely to technical education and notvocational training (para. 3.13 of the SAR for CONALEP III). In this connection CONALEPhas a Marginal Areas Program that uses mobile training units to address the basic training needsof women, not necessarily resulting in higher income, but which nevertheless help improve theirliving conditions (for example, a short course on food canning in areas lacking refrigerators).

The following comments refer top. 23, para. 23, regarding the importance of industrialadvisory boards for each center:

Each CONALEP school has an Advisory Committee, a legal entity by virtue of itsestablishment decree, that promotes education supply and [?the employment of] graduates in thearea served by the school. It also analyzes the factors involved in decisionmaking, which rangefrom changes in curricula to the establishment of a new school or the opening or elimination ofcourses of study.

Both the production sector and the community in general, as evidenced by the patronatosat some schools, which help secure financing for special educational events.

Para. 27 on p. 24 states that Mexican officials had expressed their dissatisfaction withthe constant turnover in Bank staff assigned to the project.

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In this case the Government officials referred solely to the representatives of NAFIN andthe Secretariat of Finance and Public Credit. CONALEP has not had problems with the[illegible] officials of the Third Technical Education Project and enjoys good relations withthem.

The following comment refers top. 35, para. 2.5, where it is stated that there are 60mobile training units serving remote sites:

At present there are 80 mobile training units that were built at system centers, 78 ofwhich using funding from the Third Project.

The following comment refers to para 1.7 on p. 32, which mentions the six projectsfinanced by the Bank to promote vocational and technical education:

The Secretariat of Labor and Social Welfare is not the only executing agency of theTechnical Education and Training Modernization Project (Loan 3805-ME). CONALEP is alsoinvolved in Component B - Modernization of Training Programs, which includes the initial pilotphase for acquiring technical experience in the development and operation of training modulesand the preparation and development of training materials.

Box 1 on p. 34 notes that the education represented by the diplomas granted byCONALEP is in effect nonformal.

The diplomas awarded by CONALEP are subject to the General Law on Professions (formid-level technician) and are recognized by the Secretariat of Public Education. As such, theyare part of the formal education system; nonformal education in Mexico refers to that which isnot officially accredited.

On p. 35, para. 2.5, the report states that CONALEP has few schools in the lessdeveloped areas of the country.

The criteria for opening a CONALEP training center are: (i) population of more than60,000; (ii) existence of potential demand not adequately served by another educationalinstitution of the same level; (iii) existence of a local economy with demand for skilled technicalpersonnel; and (iv) express request by the social and production sectors for the opening of acenter.

In order to meet the low demand of areas that do not satisfy the foregoing criteria,CONALEP devised its strategy of extension units that offer vocational training on premisesprovided by the local governments (primary or secondary schools or offices) through theMarginal Areas Program, which uses the mobile training units to give vocational instruction.

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Para. 2.16 on p. 39 speaks about dropout, the main causes of which are:

(a) internal, where the system can carry out recovery programs, such as high levels ofacademic failure for certain subjects such as mathematics and physics, teacher inadequacies,equipment inadequacies, etc. and (b) external, such as the students' economic problems,inadequate academic preparation of new entrants, and lack of vocational preparation.

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Responses to Borrower Comments

The comments by the Secretaria de Trabajo y de Previsi6n Social did not contain anyrequests for changes. The comments by CONALEP did and have been taken into account asfollows.

1. CONALEP provided details on the procedures for teachers' in-service training.However, they pertain to the most recent project, which was not being audited. Some of thesedetails were inserted in para. 2.13.

2. According to the comment, the audit states that all teachers teach by dictation and do notuse textbooks. Clearly, the pertinent paragraph, 2.12, was misread, and the discussion pertains tomission observations only. Additional clarification was provided.

3. Paragraph 11 appears to have been misread. The mission understands and supports thereasons why CONALEP has terminal programs, although many students would prefer access tohigher education.

4. Borrower merely comments, no changes needed.

5. Observation taken into account, text corrected accordingly (Box 1, paras. 27, 2.5, 2.16).

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IMAGING

Report No: 16126

Type: PPAR