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. [Private career school programs]
Highlights
- The study’s objective was to examine the impact of the Private Career School program on the employment rate, earnings, and public benefit receipt of adults with a high school education.
- The authors used a nonexperimental method to compare the short-term (3 quarters after program exit) and long-term (9 to 12 quarters after program exit) employment, earnings, and public benefits of those who took part in the Private Career School program relative to those who registered for services at the Labor Exchange.
- The study found that, compared with those who registered for Labor Exchange services, Private Career School program participants had higher employment and earnings, and lower receipt of several types of public benefits.
- The quality of causal evidence presented in this report is low because the authors did not ensure that the groups compared were similar before program participation. This means we are not confident that the estimated effects are attributable to the Private Career School 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 Private Career School Programs
Features of the Intervention
Participants in the Private Career School program were adults who had a high school education and were unemployed. The Private Career School program facilitated training for specific occupations, including cosmetology, truck driving, and computer programming. Private institutions operated the programs and the Washington State Workforce Training and Education Coordinating Board monitored them.
Features of the Study
The authors used a nonexperimental statistical approach called propensity-score matching to create a comparison group of people who registered at the Labor Exchange and who were similar to Private Career School program participants in terms of demographic characteristics, including gender, age, educational attainment, race, and employment and earnings history. The authors collected Unemployment Insurance records for those who had exited a Private Career School program or Labor Exchange from July 2001 to June 2002 to estimate the long-term impacts of the Private Career School program in quarters 9 to 12 after program exit. They also collected Unemployment Insurance records for those who exited the Private Career School program or Labor Exchange from July 2003 to June 2004 to estimate the short-term impacts in the 3 quarters following program exit. The 10,363 Private Career School participants who exited in 2001–2002 were matched to a sample of 8,003 comparison group members, which was drawn from the 179,691 adults who registered at the Labor Exchange. The 11,603 Private Career School participants who exited in 2003–2004 were matched to a sample of 8,732 comparison group members, which was drawn from the 151,842 adults who registered at the Labor Exchange. The authors then compared the employment, hourly wages, quarterly hours worked, quarterly earnings, and public benefits receipt of the Private Career School and comparison groups before and after participation. Program participants were on average 30 years old; about 57 percent of participants were female and about 30 percent were minorities.
Findings
Employment
- The study found that, compared with those registered for Labor Exchange services, the employment rate for Private Career School participants increased by 4.8 percentage points more 3 quarters after exit and 4.3 percentage points more 9 to 12 quarters after program exit. In addition, compared with those registered for Labor Exchange services, the number of hours worked per quarter for Private Career School participants increased by 40.7 hours more 3 quarters after exit and by 21 hours more 9 to 12 quarters after program exit.
Earnings
- The study found that average quarterly earnings increased by $624 more 3 quarters after program exit and $312 more 9 to 12 quarters after program exit for those who took part in the Private Career School program compared with those registered for Labor Exchange services. Compared with those registered for Labor Exchange services, the average hourly wage for Private Career School participants increased by $1.69 3 quarters after exit and 94 cents 9 to 12 quarters after program exit.
Public benefits receipt
- The study found that, compared with those who registered for Labor Exchange services, the percentage of Private Career School participants who received Unemployment Insurance benefits decreased by .9 percentage points more 3 quarters after program exit and by 2.1 percentage points more 9 to 12 quarters after program exit. Compared with those registered in the Labor Exchange program, the amount of Unemployment Insurance benefits received among Private Career School participants decreased by $17.70 more 9 to 12 quarters after program exit. The study also found that, compared with those registered in the Labor Exchange program, the receipt of Temporary Assistance for Needy Families benefits among the Private Career School participants decreased more 3 quarters (by 0.9 percentage points and $22.90 less) after program exit, but increased more 9 to 12 quarters after program exit (by 0.7 percentage points and $11.90 more). The findings were similar for food stamp benefits as the rate of receipt and benefit amount decreased more for Private Career School participants 3 quarters after exit (by 5.0 percentage points and $41.70 less), but the amount received increased by $7.60 more 9 to 12 quarters after exit compared with the Labor Exchange group. Compared with those registered in the Labor Exchange program, the percentage of participants in the Private Career School group who were enrolled in Medicaid decreased by 3.3 percentage points more 3 quarters after program exit.
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 Private Career School 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 Private Career School 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 Private Career School participants earned more 6 months after their exit dates. However, this would not be attributable to receiving Private Career School services; it would be caused by the difference in elapsed time across the groups (12 months for Private Career School 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 Private Career School 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.