In this paper, data from the first Youth Cohort Study (YCS) are used t
o analyse the effectiveness of the Youth Training Scheme (YTS) in Engl
and and Wales in terms of its impact, at an individual level, on the e
mployment prospects of young people. The analysis goes beyond previous
work in that it explicitly deals with sample selection bias and heter
oscedasticity. A switching bivariate probit model is estimated and is
found to be preferred to both the univariate probit model and the biva
riate probit model with a YTS participation dummy. The analysis sugges
ts that previous studies of YTS may have underestimated both the size
and variability of the effect that the scheme had on participants' cha
nces of finding employment.