Our study aims to inform accurate and timely results of skill development programme to stakeholders for financial decision-making and disbursement of funds, and also on lessons from the use of impact bond for skills development programme with a focus on gender based outcomes
The Skill Impact Bond or SIB initiative aims to support 50,000 young people in India over four years, 60 percent of whom will be women and girls. The skills training is provided to enable access to wage-employment in Covid-19 recovery sectors such as retail, apparel, healthcare, and logistics.
The project leverages an innovative and results-based finance mechanism–called the Development Impact Bond (DIB) model–making it the first of its kind initiative in skill development in India. Impact bonds shift the focus from inputs to performance and results. Rather than a government or a donor financing a project upfront, private investors initially finance the initiative and are repaid by ‘outcome funders’, only if agreed-upon outcomes are achieved. This mechanism creates incentives for every partner to achieve learning outcomes and not just deliver services.
National Skill Development Corporation (NSDC) in collaboration with a coalition comprising HRH Prince Charles’s British Asian Trust, the Michael & Susan Dell Foundation, The Children’s Investment Fund Foundation, HSBC India, JSW Foundation, and Dubai Cares, with FCDO (UK Government) and USAID as technical partners launched this initiative in 2021. Dalberg Advisors, the performance manager, will regularly measure outcomes so that delivery partners can reiterate and adapt to stay on track to achieve.
We will be assessing the agreed outcomes.
Millions of Indians lost their jobs during the Covid-19 pandemic with the youth being the hardest hit. From a gender point of view, India also has the lowest female labour force participation in South Asia at 20.3% with a considerable gender-based skilling gap. Moreover, out of every 100 women enrolled in skilling programmes, only ~10 stay in post-skilling jobs for three months or more.
Despite several initiatives and efforts towards skill development and employment creation, certain key barriers continue to persist (e.g. low training capacity, shortage of skilled workers etc). Some of these issues are also underpinned by how we tend to traditionally define and measure ‘success’ in skill development programmes. Most approaches predominantly focus on short-term quantitative outputs such as ‘number of people trained’; ‘number of people placed’ etc. In doing so, they do not consider equally important aspects such as retention, career aspirations, role of gender etc.
Increasingly, there is a consensus both within literature as well as evidence from programs to shift towards a more outcome-focused approach. The impact bond with its focus on outcomes and longer-term impact intends to address the youth employment crisis in a more inclusive manner with a focus on women. From an MLE point of view, it calls for a need to assess longer term outcomes and impact of programmes, especially at the beneficiary level.
Evaluating an impact bond requires a distinct approach from what one would follow in a traditional programme evaluation. We see ourselves as playing twin roles of evaluation partner and learning partner through two parallel components/workstreams, which reinforce each other.
The first component involves validation and verification of three key outcomes (certification, training completion, and three-month retention) reported by training providers. This involves two steps. The first will entail validating and checking the data that we receive from the Skill India Portal, for errors or inconsistencies. The second step will require conducting an independent sample verification through interviews with beneficiaries. At this stage, data will also be collected from employers and this data will also be triangulated with interviews with trainees to ensure accuracy of analysis.
The second component is a learning component, which will have three key learning areas or pillars:
- The Macro Pillar: aims to understand the effects of the Skill Impact Bond, on the wider skills development ecosystem, and document the perspectives and priorities of key actors and stakeholders within it.
- The Micro Pillar: aims to document the perspective of trainees and understand their aspirations, career progression pathways and assess the impact of skills training on their health, wellbeing and aspirations. Gender is a priority theme for the Skill Impact Bond – and understanding women’s career trajectories, aspirations and employment prospects will be a key focus area.
- Understanding the ‘DIB Effect’: aims to understand how a shift from measuring outputs to outcomes impacts the wider skills ecosystem in India.
The findings from the first component will inform the results and payments linked to these results. Based on the second component, we aim to provide rich and rigorous evidence on a range of indicators and aspects such as post-training retention, employability, career progression, life trajectories, and career pathways.
In doing so, we will be able to offer a nuanced commentary on the skills ecosystem in India and the mechanisms for measuring ‘success’. These tasks will be carried out to influence actors in India’s skills ecosystem advocating to measure ‘impact’ to extend beyond outputs and aligned with long-term wellbeing-associated indicators. The insights from the evaluation will also inform the evidence on the effectiveness of the DIB as an innovative financial instrument to fund skills training programmes.