By Francisco Alvarado Arce,
Citizen Initiative
In Chilean labor legislation, there is a strategy to train, promote and link companies with young people: improve employability and enhance career paths, through an integrated and quality offer of policies, programs and instruments, aimed at employed, unemployed and those who do not participate in the labor market, with special attention to accompanying vulnerable people for their insertion and continuity in the labor market, through three areas of service for people and employers: training, labor intermediation and subsidies.
1) Youth Employment Subsidy Program. Through the transfer of a monetary subsidy, the Chilean State grants to the young opportunity a “benefit” that improves the income of young people and working women.
- Coverage is 33%, which is channeled through companies to encourage formal employment.
- The subsidy is granted in 12 monthly payments and is aimed at secondary school students, focusing on the 40% of vulnerable families.
- The program benefits young people aged 18 to 25, and can be implemented up to the age of 29.
Through this program, 287,594 young people have benefited and 40,431 companies have been covered.
2) Apprenticeship Program. It is a 12-month job training and development program.
- It is a subsidy aimed at training and possible hiring, which aims to promote the entry into the labor market of young people aged 15 to 25.
It does not generate a social benefit, since it is aimed at training young people who have interrupted their educational process.
A subsidy is transferred for a minimum of three months, which can be extended to 12 months, depending on the training period.
The State contributes 50% of the subsidy and the other 50% is contributed by the company, which must assign a trainer - through the State granting the company a training bonus of up to $400,000 - to provide job training to the apprentice, with the aim of inserting him into a training process for formal work.
There is an option for the training company to hire the young people once the training period has concluded.
The program has a high level of success, as its impact is 64% in the placement of already trained young people in stable and continuous jobs.
3) Tax Franchise Pre-contract. The contract program takes place in the context of tax exemption, whose active training policy is verified under a tax benefit.
- In this Program, the State is willing to forgive up to 50% of taxes to training companies.
The latter and the state invest up to 1% of the payroll in the training program, an amount that is forgiven in taxes to the company.
The pre-contract refers to the possibility that the company hires the young person who has been trained, or that he or she chooses to be hired by another company. Hiring by either party is not obligatory at the end of the program.
The successful impact of this program benefits 71% of trained young people under the age of 29.
The program undertaken by the Chilean government is an incentive to hiring, which generates fiscal resources and is a mechanism for companies to train young people at the expense of fiscal taxes, accompanied by a contract scheme through a tax exemption that provides the work experience of the young opportunity at the expense of the State.
It is a successful public employment policy because it combines subsidy schemes with training financing schemes, which is reflected in the fact that 7 out of 10 young people have access to acceptable jobs.
From being a temporary program, in practice it has shown that subsidizing the young opportunity for more than a year, it climbs to a higher employability rate.
For further information on the subject, see: Rodrigo Valdivia (Head of the Employment Department of the Ministry of Labor and Social Security-Chile) in “Apprentices, youth employment subsidy and SENCE”. Available at: https://www.sijalo.mx/