Hollenbeck, K., Schroeder, D., King, C., & Huang, W. (2005). Net impact estimates for services provided through the Workforce Investment Act. ETA Occasional Paper 2005-06. Washington, DC: U.S. Department of Labor, Employment and Training Administration. [WIA Dislocated Worker]
- The study’s objective was to examine the impact of the Workforce Investment Act (WIA) Dislocated Worker Program’s core, intensive, and training services on the employment rate, earnings, and benefits receipt of low-income dislocated workers ages 22 to 64.
- The authors established three treatment groups based on the level of WIA services used and matched them to three comparison groups that participated in Employment Services (ES) and/or the core WIA services.
- The study found that the employment rate and average quarterly earnings were significantly higher for those in each of the treatment groups compared with their matched comparison groups. Benefit receipt was also significantly lower for those in the treatment groups than in their comparison groups.
- 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 Dislocated Worker Program; other factors are likely to have contributed.
The Workforce Investment Act (WIA) Dislocated Worker Program
Features of the Intervention
The WIA Dislocated Worker Program was authorized by Title I of the Workforce Investment Act of 1998 and was superseded by the Workforce Innovation and Opportunity Act (WIOA), effective in July 2015.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 Dislocated Worker 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 Dislocated Worker Program served people who had been laid off from employment, including those whose employers had closed permanently and who were unlikely to return to their previous industry of occupation. Eligible workers could receive three tiers of services through WIA. Core services were available to everyone and included job placement assistance, skills assessments, and provision of information on the labor market, among other services. 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. 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 study included a sample of dislocated workers who received core, training, or intensive services through the WIA Dislocated Worker Program from among 92,787 workers who received services from either the WIA Adult or WIA Dislocated Worker programs. These dislocated workers were ages 22 to 64 and exited the program from July 2000 to June 2002 and were observed for up to eight quarters after program exit. Their earnings were also below the top 0.5 percent of all earners in all quarters of the study period.
The authors used administrative data sources, including WIA Standardized Record Data, ES and Unemployment Insurance records, and Temporary Assistance for Needy Families (TANF) records from each state to compare the number of quarters employed, quarterly earnings, and months of receipt of TANF benefits of WIA participants with those of the ES participants who exited the program at the same time.
The authors established three treatment groups based on the level of WIA services used: (1) workers who received any of the employment-related services available through the WIA Dislocated Worker Program, (2) workers who received the training services available through the WIA Dislocated Worker Program, and (3) workers who received the intensive or training services available through the WIA Dislocated Worker Program. The respective three comparison groups were (1) workers who participated in the ES program, (2) WIA Dislocated Worker Program participants who did not receive the available training services, and (3) ES participants combined with workers who received only core services available through the WIA Dislocated Worker Program.
The study used administrative data from the following states:
- The percentage of quarters employed after program exit was significantly higher for dislocated workers who took part in WIA Dislocated Worker Program services compared with those in the comparison groups, with estimates across the three contrasts ranging from 5.9 to 13.5 percentage points.
Earnings and wages
- Average quarterly earnings were significantly higher for dislocated workers who took part in WIA Dislocated Worker Program services compared with those in the comparison groups, with estimates across the three contrasts ranging from $386 to $951.
Public benefits receipt
- Those who took part in the WIA Dislocated Worker Program services received TANF benefits for a significantly lower percentage of months after program exit compared with those in the comparison groups, with estimates across the three contrasts ranging from 1.0 to 1.9 percentage points.
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 and ES participants were on identical wage trajectories before receiving services from their respective programs and that the average length of participation in WIA services was six months, whereas that for Employment Services 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 participants’ earnings about 12 months after they started receiving services and ES 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 participants earned more 6 months after their exit dates. However, this would not be attributable to receiving WIA services; it would have been caused by the different elapsed time across the groups (12 months for WIA participants versus 7 months for ES participants). Therefore, studies defining the groups based on exit date, rather than entry date, cannot receive a moderate causal evidence rating. This would also be true when comparing employment rates and benefits receipt.
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 Dislocated Worker Program; other factors are likely to have contributed.
Hollenbeck, Kevin. (2009). Workforce Investment Act (WIA) net impact estimates and rates of return. Presented at European Commission-sponsored meeting, “What the European Social Fund Can Learn from the WIA Experience,” Washington, DC. Retrieved from http://research.upjohn.org/confpapers/2.