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Net impact and benefit-cost estimates of the workforce development system in Washington State. (Upjohn Institute Technical Report No. 13-029). [WIA Youth] (Hollenbeck & Huang 2014)

Citation

Hollenbeck, K., & Huang, W-J. (2014). Net impact and benefit-cost estimates of the workforce development system in Washington State. (Upjohn Institute Technical Report No. 13-029). Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. Retrieved from W.E. Upjohn Institute for Employment Research website: http://dx.doi.org/10.17848/tr13-029. [WIA Youth]

Highlights

  • The study’s objective was to examine the impact of the Workforce Investment Act (WIA) Youth Program, held on community and technical college campuses, on the employment rate and earnings of low-income youth in Washington State.
  • 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 and earnings between those who took part in the WIA Youth program relative to those who registered for services at the Labor Exchange (Employment Services).
  • The study found that, compared with those who registered for services at the Labor Exchange, WIA Youth participants had higher employment and earnings.
  • The quality of causal evidence presented in this report is low because the authors did not ensure that the groups being compared were similar before program participation. This means we are not confident that the estimated effects are attributable to the WIA Youth 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) Youth Program

Features of the Intervention

The WIA Youth Program was authorized by Title I of the Workforce Investment Act of 1998 and was superseded by the Workforce Innovation and Opportunity Act (WIOA), effective in July 2015.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 Youth Program services, which remained essentially the same under WIOA, were designed to provide quality employment and training services to eligible workers. Administered through local workforce investment areas, the Youth Program served people ages 14 to 21 years old through a set of core services; these included job placement assistance, skills assessments, and provision of information on the labor market. 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 qualified.

Features of the Study

The authors used a nonexperimental statistical approach called propensity score matching to create a comparison group of people who registered for services at the Labor Exchange and were similar to WIA Youth Program participants in terms of demographic characteristics, including gender, age, educational attainment, race, and employment and program participation history. The authors then compared the two groups on employment, hourly wages, hours worked per quarter, and quarterly earnings before and after participation. The authors collected Unemployment Insurance records for those who had exited the WIA Youth or Labor Exchange program from July 2005 to June 2006 to estimate the long-term impacts of the WIA Youth program in quarters 9 to 12 after program exit. They also collected Unemployment Insurance records for those who exited the program from July 2007 to June 2008 to estimate the short-term impacts in the 3 quarters following program exit. There were 3,045 WIA Youth participants who exited in 2005–2006 and 2,250 who exited in 2007–2008.

Findings

Employment

  • The study found 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 Youth Program significantly increased by 8.0 percentage points in the third quarter and by 4.3 percentage points in quarters 9 to 12 after program exit. The average number of hours worked per quarter significantly increased for the WIA Youth group relative to the comparison group by 39.5 hours in the third quarter and by 27.8 hours in quarters 9 to 12 after program exit.

Earnings

  • The study found that average quarterly earnings significantly increased by $330 in the third quarter after program exit and by $343 in quarters 9 to 12 after program exit for those who took part in the WIA Youth program compared with those who registered at the Labor Exchange. Average hourly wages significantly increased by $0.41 in both the third quarter and quarters 9 to 12 after program exit for the WIA Youth relative to the comparison group.

Considerations for Interpreting the Findings

Although the authors accounted for many underlying characteristics of the groups being compared, which could also influence their outcomes, the authors’ decision to define the groups based on their date of program exit rather than program entry is problematic. For example, suppose that the WIA Youth program and Labor Exchange participants were on identical wage trajectories before receiving services from their respective programs and that the average length of participation in the WIA Youth program was six months, whereas that for Labor Exchange was one month. At the conclusion of participation, they exited the program.

If we compared the groups’ earnings 6 months after their recorded exit dates, we would observe WIA Youth participants’ earnings about 12 months after they started receiving services and Labor Exchange participants’ earnings about 7 months after they started receiving services. If both programs were completely ineffective and everyone stayed on their original upward-sloping wage trajectory, it would appear as though the WIA Youth participants earned more 6 months after their exit dates. However, this would not be attributable to receiving WIA Youth classes; it would be caused by the different elapsed time across the groups (12 months for WIA Youth participants versus 7 months for Labor Exchange participants). Therefore, studies defining the groups based on exit date, rather than entry date, cannot receive a moderate causal evidence rating.

Causal Evidence Rating

The quality of causal evidence presented in this report is low because the authors did not ensure that the groups being compared were similar before program participation. This means we are not confident that the estimated effects are attributable to the WIA Youth Program; other factors are likely to have contributed.

Reviewed by CLEAR

January 2017