Citation
Hollenbeck, K., & Huang, W-J. (2006). Net impact and benefit-cost estimates of the workforce development system in Washington State. (Upjohn Institute technical report no. TR06-020). Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. [WIA Adult]
Highlights
- The study’s objective was to examine the impact of the Workforce Investment Act (WIA) Adult Program on the employment rate, earnings, and public benefit receipt of low-income adults in Washington State.
- The authors used a nonexperimental design to compare the short-term (3 quarters after program exit) and long-term (9 to 12 quarters after program exit) employment, earnings, and public benefit receipt between those who took part in the WIA Adult Program and those who registered for employment services at the state Labor Exchange.
- The study found that, compared with those who registered for services at the Labor Exchange, participants in the WIA Adult Program had higher employment, earnings, and public benefit receipt.
- The quality of causal evidence presented in this report is low because the authors compared the treatment and comparison groups at different follow-up points and the groups were therefore not equivalent. This means we are not confident that the estimated effects are attributable to the WIA Adult Program; other factors are likely to have contributed.
- This study also examined the effectiveness of other workforce development programs. Please click here to find CLEAR profiles of those studies.
Intervention Examined
The Workforce Investment Act (WIA) Adult Program
Features of the Intervention
The WIA Adult Program was authorized by Title I of the Workforce Investment Act of 1998 and was superseded by the Workforce Innovation and Opportunity Act (WIOA), effective in July 2015. The Adult Program services, which remain essentially the same under WIOA, were designed to provide quality employment and training services to eligible workers. Administered through Local Workforce Investment Areas, the Adult Program served all people ages 18 and older through core services; these included job placement assistance, skills assessments, and provision of information on the labor market, among other services. In addition, those unable to obtain a job through core services alone could receive intensive services—which included counseling and specialized assessments—and vouchers for attending training. Recipients of public assistance and other low-income people received priority for intensive and training services in Local Workforce Investment Areas in which program funds were limited. In addition, some local areas provided supportive services such as child care, transportation, and work-related financial assistance to those who qualify.
Features of the Study
The authors used a nonexperimental statistical procedure called propensity-score matching to create a comparison group of people who registered for services at the Labor Exchange and were similar to WIA Adult participants in terms of gender, race and ethnicity, age, educational attainment, location, and employment history. The authors collected Unemployment Insurance records for those who had exited a WIA Adult Program or Labor Exchange from July 2001 to June 2002 to estimate the long-term impacts of the WIA Adult Program in quarters 9 to 12 after program exit. They also collected Unemployment Insurance records for those who exited the WIA Adult Program or Labor Exchange from July 2003 to June 2004 to estimate the short-term impacts in the 3 quarters following program exit. The 2,295 WIA Adult participants who exited in 2001–2002 were matched to a sample of 1,709 comparison group members, which was drawn from the 156,296 adults who registered at the Labor Exchange. The 4,328 WIA Adult participants who exited in 2003–2004 were matched to a sample of 3,080 comparison group members, which was drawn from the 130,350 adults who registered at the Labor Exchange. The authors then compared the employment, hourly wages, quarterly hours worked, quarterly earnings, and public benefit receipt of the WIA Adult Program and comparison groups before and after participation. Program participants were on average 36 years old; 60 percent of participants were female and 20 to 30 percent were minorities.
Findings
Employment
- The authors reported that, compared with those who registered for services at the Labor Exchange, the percentage of quarters employed for those who took part in the WIA Adult Program increased by 9.1 percentage points more 3 quarters after exit and by 6.6 percentage points more 9 to 12 quarters after program exit. The average number of hours worked increased for the WIA Adult participants, with an average increase of 59.8 more hours worked 3 quarters after exit and 35.7 more hours worked 9 to 12 quarters after program exit.
Earnings and wages
- The authors reported that average quarterly earnings increased for those who took part in the WIA Adult Program compared with those who registered at the Labor Exchange, with an average increase of $725 more 3 quarters after program exit and $403 more 9 to 12 quarters after program exit. The hourly wage also increased for the WIA Adult group, with an average increase of $1.90 more per hour 3 quarters after exit and $0.59 more per hour 9 to 12 quarters after program exit.
Public benefit receipt
- The authors reported that, compared with those who registered with the Labor Exchange, the percentage of WIA Adult participants receiving Unemployment Insurance, Temporary Assistance for Needy Families benefits, food stamps, and Medicaid increased (by 1.7, 0.5, 5.1, and 6.2 percentage points more, respectively) 3 quarters after program exit. The amount of Unemployment Insurance and food stamps received also increased during this period by $21.90 and $20.80 more. The percentage of WIA participants receiving Unemployment Insurance and food stamps increased by 4.0 and 2.8 percentage points more 9 to 12 quarters after program exit, and the amount of Unemployment Insurance received also increased by $36.40 more compared with the Labor Exchange group
Considerations for Interpreting the Findings
Although the authors accounted for many characteristics of the treatment and comparison groups in their analysis, the decision to define the groups based on their date of program exit rather than program entry is problematic. For example, if the average length of participation was 6 months for the WIA Adult group compared with one month for the Labor Exchange group and we compared the groups’ earnings 6 months after their recorded exit dates, we would see WIA Adult participants’ earnings about 12 months after they started receiving services and Labor Exchange participants’ earnings about 7 months after they started receiving services. If everyone stayed on their original upward-sloping wage trajectory, it would appear as though the WIA Adult participants earned more 6 months after their exit dates. However, this would not be attributable to receiving WIA Adult program services; it would be caused by the difference in elapsed time across the groups (12 months for WIA Adult participants versus 7 months for Labor Exchange participants). Therefore, studies defining the groups based on exit date instead of entry date without accounting for program length can receive only a low evidence rating.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the authors compared the treatment and comparison groups at different follow-up points, and the groups were therefore not equivalent. This means we are not confident that the estimated effects are attributable to the WIA Adult Program; other factors are likely to have contributed.
Additional Sources
Hollenbeck, K. (2011). Short-term net impact estimates and rates of return. In D.J. Besharov & P.H. Cottingham (Eds.), The Workforce Investment Act: Implementation experiences and evaluation findings (pp. 347-370). Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.