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3.1 Introduction

This section addresses the issue of program rationale only with respect to the HRDC youth internship programs that are part of the Youth Employment Strategy. As indicated in Section 1, the YSC, SCP, and SYI programs were recently evaluated and the program rationale issues for these components have already been addressed in those evaluations.

With respect to the youth internship programs, it is useful to divide the discussion of the rationale into two parts. First, what might have been the rationale for (or reasons for) implementing these type of youth internship programs envisioned for YES? Second, what might have been the rationale for choosing to target the particular types of young people who were likely to participate in these programs? In this section, we use the literature review to address these two questions. We then rely on some results from surveys with YIC employers, sponsors, and participants to analyse how these programs meet the needs of both interns and employers. The final section of this chapter provides a preliminary profile of Science and Technology interns and also describes a number of employer and sponsor needs.

3.2 The Rationale for HRDC Youth Internship Programs

The youth internship programs that form part of YES are hybrids of wage subsidy programs (in which the government pays part of the wage of participants), and work-based education programs (in which employers/sponsors receive subsidies for providing a combination of work experience and job training). At a very general level — before considering the ways in which these actual internships were put in place — there is strong support in the literature for such internships.

Layard et al. (1991, pp. 472–473) argue that "a major determinant of the level of unemployment is the search effectiveness of the unemployed," and that there are two ways for the government to improve that "search effectiveness":

The first is to take a tougher line on benefits [available to unemployed workers], and the second is to offer active help in training and the provision of jobs. Benefits can be made less attractive by cutting their value, by reducing their duration, and by stiffening the work test. … However, many individuals do need active help in fitting themselves for work and in persuading employers of their fitness… There is thus a strong efficiency and equity case for giving active help to the unemployed

While most countries, including Canada, are now taking a "tougher line," benefit levels in Canada are already less generous and less long-lived than their European counterparts. Therefore the scope for taking a "tougher line" may be somewhat limited in Canada.

Because of the education (work experience and on–the-job training) intended to be part of the youth internship programs, the internships might potentially improve the ability of the interns to find work. Because the education takes place on the job, as opposed to taking place in schools, the internships also help young people and employers to find each other. The internships are clearly intended to give "active help to the unemployed and underemployed" and are therefore part of the general trend toward active labour market policy (ALMP) in western industrialized countries.

Thus, the overall vision of the youth internship programs, stated in very general terms in program documents, is supported by the literature. However, based on the document review and key informant interviews, there seems to have been very little detailed guidance given to either Youth Internship program sponsors or Human Resources Centres of Canada (HRCCs) as to the structure or content of the internships. Instead, internship program sponsors and HRCCs were allowed to determine the structure and content. In and of itself, such decentralization, almost unavoidable, might be a good approach, since the program allows the possibility that internships can be created in light of local conditions. However, since it was not possible to obtain detailed information about the structure and content of the internships, we could not verify whether the theoretical vision of the internships was realized at the local level.

3.3 Targeting

The literature is quite clear about the importance of targeting or choosing the groups that should be allowed to participate in ALMPs. Poorly targeted programs run the risk of devoting significant resources to individuals who are not in need of help or of helping some individuals only at the expense of others. The literature is quite clear that minimizing this risk requires that ALMP target "outsiders" — individuals who would remain outside the labour force in the absence of the program.

HRDC has not established strict eligibility criteria for participation in its youth internship programs. Rather, a very broad definition of "young" was adopted, with all those under 30 having the potential of being considered for participation in the program if out of school, unemployed or underemployed.

In practice, the absence of precise targeting by the programs could mean that participants in the youth internship programs may include significant numbers of young people who could have succeeded had the programs not existed. In other words, they could have had a successful transition from school to work and obtained their first job without the help of a program. Moreover, some interns may have been hired only at the expense of other, more "in-need" young people. From our interviews with key informants, there was little evidence that the targeting issue was carefully considered before the programs were implemented.

Even if more resources are devoted to careful targeting, the literature documents the significant challenges posed by targeting efforts. Some of the youth internship programs require the participation of private firms. Private firms will be willing to hire only workers who can be productive enough to be beneficial to the firms. However a common perception is that employers seem to view young people as being unreliable in terms of their work habits and willingness to stay on the job for long periods.

Finding workers who are both "long-term unemployed" and acceptable to potential employers leads Robertson (1994, p. 38–39) to suggest that a wage subsidy program for Canada should seek out individuals who have been unemployed for a long time or who are unemployed and at risk of being unemployed for a long time; and are job-ready in the sense that they do not have problems that involve "their attitude, language skills, or their personal skills."

Policy makers who try to follow this targeting advice in connection with programs for young people may find themselves in the following quandary. The goal is to help those most in need of help — the long-term unemployed and other "outsiders." Yet these are precisely the group that employers may not want to hire. The group that is both at risk of long-term unemployment and that is acceptable to employers may be quite small. One way around the problem is to allow employers to use the program to screen potential employees, hiring the ones that meet their needs and quickly laying off those who do not.

The latter solution conflicts with another of the goals usually accompanying programs for the long-term unemployed. Writing in the specific context of targeted wage subsidy programs, Robertson notes (p. 7) that the goal of programs for the long-term unemployed should not be "just a job" but a job that will provide training and the potential for advancement:

… the long run effect of a wage subsidy, if it is effective, is to improve the productivity, employment prospects and wages of the targeted groups.

Thus one horn of the dilemma faced by policy makers is that a program that both requires the participation of private employers and targets workers known to be the most disadvantaged may fail either because employers refuse to hire the target group or because the employers refuse to provide any meaningful training.

The other horn of the dilemma is that even if policy makers target a less disadvantaged group, employers are likely to hire only workers who are not among the most disadvantaged. Since those workers will be the ones most likely to succeed even if the program did not exist, the risks of misdirecting scarce resources are heightened.

Greenwood (1997, p. 1) poses the dilemma as follows:

A program can make a modest improvement in the situation of many people whose employment problems are not too serious (and for whom, therefore, the scope for achieving sizable impacts is limited). Or it can try to help the seriously disadvantaged who face multiple barriers to employment. In this case, those who benefit will likely benefit a great deal. But many participants will drop out and many others will not succeed despite the intervention; therefore, the average impact will be modest. It is important to decide whether it is more important to provide broad coverage with a program or to provide help to those who need it the most.

There is support in the literature for active labour market programs that are carefully aimed at labour market "outsiders." The program documents for HRDC youth internship programs specified only very general guidelines concerning the structure and content of the internship programs. Also, the internship programs are open to a fairly wide range of individuals under 30 years of age. The broad range of youth internship program participants raises the risk that significant resources have been spent on youth who may have had a successful transition from school to work without support from the programs. As the literature documents though, careful targeting of ALMP is no simple matter in determining specific targets. It is important to consider the incremental impacts that HRDC youth internship programs provide participants. An incremental analysis of youth internship programs will be undertaken by the summative component of this evaluation.

3.4 The Needs of Employers and Sponsors

The survey of employers and sponsors also addressed issues associated with program rationale. Analysis of this survey indicates that the YIC programs was designed to meet the needs of interns, employers, and sponsors.

Employers⁴ and sponsors⁵ were first asked how they benefited by hiring youth. The most frequent responses, with the percentage of respondents expressing each view, are shown in Exhibit 3.1 (more than one response was possible). For both sponsors and employers, the main benefits in hiring youth are first to develop future employees and second, to bring new ideas and creativity to the workplace. Sponsors thought, in a larger proportion than employers, that hiring youth also enables them to engage in new activities and services.

Interestingly, 15% of employers said that youth are easier to train as they are not set in their ways, a response that was not given by any sponsors.

Source: HRDC Survey of Employers and Sponsors, 1998

The youth internship programs are designed to focus on the needs of youth in making the transition from school to the labour market. In cases where the internship was completed, employers and sponsors were asked about several aspects of the intern’s needs and the extent they felt these were met through the program. The majority of respondents assigned a rating of either 4 or 5 on a five-point scale (where one indicates "not at all" and five indicates "very much"), as presented in Exhibit 3.2.

Source: HRDC Survey of Employers and Sponsors, 1998
* the number of respondents
¹Respondents who rated the statement a 4 or 5 on the 1 (not at all) to 5 (very much) scale are considered to agree with the statement.

Among both sponsors and employers, a very large proportion of respondents agree that the internships allow the interns to gain new skills, to get a better understanding of what is expected in a work situation and to offer interns work experience related to their career aspirations. On all questions, sponsors consistently rated the internships higher than did employers. Employers were more likely than sponsors to give ratings of one or two points on all questions.

Employers were also asked if the intern possessed skills that were in short supply in the organization. Forty-four percent assigned a rating of four or five to this question indicating that the skills were in short supply, while 32% gave this a rating of one or two.

In summary, the majority of respondents to the Survey of Employers and Sponsors felt the program is of value to the interns in making the transition to work, with employers giving the YIC program a somewhat lower rating in this area. This may be due to sponsored projects tending to be more comprehensive, with various modules and often a training component, whereas employers in many cases provided only work experience.

3.5 The Characteristics and Needs of YIC Participants

The survey of YIC participants provided an interesting profile of the characteristics of youth accessing this program. The complete profile is presented in Appendix A.

Highlights of characteristics include:

• slightly more males than females (58% versus 42%) participated in YIC;
• 66% of YIC interns had some or had completed post-secondary education or training;
• 12% of YIC interns had less than a high-school education;
• the majority (93%) of YIC interns were within the prime target age group for YES (under age 30), about 6% of the interns were over the age of 30; and,
• at the time of the interview, some 13% of YIC participants reported leaving their projects prior to completion — the most commonly cited reason was to return to school —reported by 9% of early leavers. Employers terminated only 2% of interns. Approximately, 56% of the interns interviewed had completed their project, but 31% were still ongoing.

3.6 Internships in Science and Technology

A survey of participants (43 in total) and interviews with senior personnel for each participating sector council were undertaken for the Internships in Science and Technology Program. The following profile of interns in Science and Technology was obtained from this survey.

The age of participants interviewed is included in the table below:

According to one of the nine key informants from the sector councils, the age restriction posed a difficulty because people are returning to school for upgrading or training in science and technology programs. In many instances, these "older" graduates were not eligible under this program.

The educational level of most interns was at the university level (38) with three interns having a college education and two interns who reported having graduated from high school. Interviews with the key informants from sector councils revealed that, for the most part, interns had an educational background in science and technology.

Due to the large differences between sectors, the employment-related needs of youth vary considerably between sectors, according to key informants. In some of the sectors, youth with science and technology training are in high demand and are recruited directly out of school. As a result, their needs are fairly minimal. This is in comparison to other sectors where youth need specific additional skill enhancement, which requires additional resources from their employer or sponsor. In some instances, the sector council is able to match interns with employers. This indicates that this contact link is important for those youth who wish to be employed in the sector but are unable to find an employer or sponsor.

Similar to the variety of needs of youth, the needs of employers and sponsors of youth appear to vary greatly according to sector. In some sectors, the cost of developing a new position for a science and technology graduate is very high. This program allows for some compensation. In other sectors, the employers need to invest in on-the-job skill enhancement, which takes senior resources for training and monitoring. As a result, the program is able to compensate for some of the expense. One possible indicator of the usefulness of the program for employers and sponsors is that some of the sectors’ key informants report that most of the employers who signed up for the program had not previously participated in HRDC programming.

In some of the sectors where science and technology skills are in high demand, small and medium enterprises (SMEs) reported to the sector councils that the funding from the program made them more competitive with larger companies. Using the program subsidy, they are able to add to their starting salary for graduates. This makes these companies more attractive to new graduates. It should be noted that making smaller companies more competitive for already scarce graduates may not be within the objectives of this program. In these cases, there appears to be more positions than candidates. This raises the question of the actual need for a program among some of these sectors.

HRDC finances a wide range of activities under the youth internship programs aiming to help youth make a successful transition from school to work. The employment needs of the youth participants in the internship programs vary greatly. This is why it will be important to examine to what extent the interventions offered under the youth internship programs have met youth employment needs and have improved labour-market prospects for young Canadians. This will be further investigated by the summative evaluation.

Footnotes

4	Employers can be private, public and not-for-profit organizations. For international activities, employers must have an international focus and expertise.
5	Sponsors can be businesses, organizations (including not-for-profit, employer, professional and labour associations), public health and educational institutions, band or tribal council, and municipal governments.