Throughout the Middle East, unemployment rates of educated youth have been persistently high and female labor force participation, low. This paper studies the impact of a randomized experiment conducted between 2010 and 2011 in Jordan, designed to assist female community college graduates in finding employment. One randomly chosen group of graduates was given a voucher that would pay an employer a subsidy equivalent to the minimum wage for up to 6 months if they hired the graduate; a second group was invited to attend 45 hours of employability skills training designed to provide them with the soft skills employers claim are often lacking in graduates; a third group was offered both interventions; and the fourth group formed the control group.

The analysis finds that the job voucher led to a 40 percentage point increase in employment in the short-run, but that most of this employment was not formal. The average effect was much smaller and no longer statistically significant 4 months after the voucher period had ended. The voucher appeared to have persistent impacts outside the capital, where it almost doubled the employment rate of graduates; this may be a reflection of displacement effects. Soft-skills training had no average impact on employment.

The results suggest that wage subsidies can help increase employment in the short term, but are not a panacea for the problems of high urban female youth unemployment.