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11185 The Lasting Effects of Workingwhile in School A Long-Term Follow-Up Mery FerrandoNoemi KatzkowiczThomas Le BarbanchonDiego Ubfal Gender GroupAugust 2025 A verified reproducibility package for this paper isavailable athttp://reproducibility.worldbank.org,clickherefor direct access. Policy Research Working Paper11185 Abstract This paper provides the first experimental evidence on thelong-term effects of work-study programs, leveraging a ran-domized lottery design from a national program in Uruguay.Participation leads to a persistent 11 percent increase informal labor earnings, observable seven years after the pro-gram. Effects are stronger for youth who participate during pivotal educational transitions and are larger for vulnerableyouth and men, while remaining positive for women andnon-vulnerable youth. The program is highly cost-effec-tive, with average impacts exceeding those of job trainingprograms and comparable to early childhood investments.. This paper is a product of the Gender Group. It is part of a larger effort by the World Bank to provide open access to itsresearch and make a contribution to development policy discussions around the world. Policy Research Working Papers arealso posted on the Web at http://www.worldbank.org/prwp. The authors may be contacted at dubfal@worldbank.org. Averified reproducibility package for this paper is available athttp://reproducibility.worldbank.org, clickherefor direct access. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about developmentissues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry thenames of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely thoseof the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank andits affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. TheLastingEffectsofWorkingwhileinSchool:ALong-TermFollow-Up MeryFerrando,NoemiKatzkowicz,ThomasLeBarbanchon,DiegoUbfal* JELCodes:I21,I26,J13,J24,J31,O15.Keywords:Work-studyProgram,YouthEmployment,School-to-WorkTransi-tion,Long-termEffects. Youth unemployment represents a critical issue across various global contexts, withrates consistently surpassing those of adult unemployment by a factor of three.This disparity underscores the unique challenges young individuals face in transi-tioning from education to employment. Exacerbating this issue is the prevalence ofyoung people classified as NEET (Not in Education, Employment, or Training). In2023, nearly 20 percent of the youth population in Latin America and the Caribbeanwere identified as NEET. One approach to increasing youth employment and fa-cilitating the school-to-work transition is through work-study programs. Workingwhile studying is a relatively common practice among youth in some countries,though the overall levels remain low.In 2023, 17 percent of students aged 15-19 in Latin America and the Caribbean were employed.1Evidence on thelong-termcausal effects of in-school work remains limited to non-experimental designs(Ruhm, 1997; Hotz et al., 2002; Ashworth et al., 2021), and the experimental lit-erature on broader active labor market policies offers limited guidance, as mostevaluations do not extend beyond three years post-program completion (McKen-zie, 2017; Card et al., 2018; Carranza and McKenzie, 2024).2 This paper fills this gap in the literature by providing causal evidence on the long-term effects of a work-study program. Leveraging a randomized lottery-based de-sign, we examine a program in Uruguay that offers youth aged 16 to 20 their firstformal work experience within state-owned companies for up to one year. Le Bar-banchon et al. (2023) document significant short-term effects of this program onformal earnings. They also find that the program enhances initial educational at-tainment, alleviating concerns about potential crowding-out effects on educationalinvestment.3Despite these promising findings, whether short-run benefits of work-study programs lead to lasting earnings improvements remains unresolved. While the program initially provides participants with an advantage through earlywork experience, its impact may diminish over time as non-participants accumulatetheir own work experience, potentially narrowing labor market differences. How-ever, if labor market trajectories depend heavily on first jobs, program effects may persist.4In the Uruguayan case, well-regarded positions in state-owned companiescould serve as crucial stepping stones to future employment. Understanding the long-term effects of combining work and study is critical forseveral reasons. First, such evidence is essential for conducting cost-benefit anal-yses, as