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Net impact evaluation of retraining under ESHB 1988. (Jacobson & LaLonde 1997)

Absence of conflict of interest.

Citation

Jacobson, L., & LaLonde, R. (1997). Net impact evaluation of retraining under ESHB 1988. Retrieved from https://files.eric.ed.gov/fulltext/ED413525.pdf

Highlights

  • The study's objective was to examine the impact of the Washington State Employment and Training Act of 1993 (ESHB 1988) on earnings.
  • The study used a nonexperimental design to compare the earnings of displaced workers who received re-training to those who did not receive re-training. Using administrative data from Washington State's Employment Security Department and transcript data from the community colleges, the authors conducted statistical models to examine the differences between groups.
  • The study found that participation in the re-training program increased long-term earnings; however, the authors did not provide a test of statistical significance.
  • The quality of causal evidence presented in this report is moderate because it was based on a well-implemented nonexperimental design; this is the highest causal evidence rating possible for a nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to the Washington State Employment and Training Act of 1993 (ESHB 1988), but other factors might also have contributed.

Intervention Examined

Washington State Employment and Training Act of 1993 (ESHB 1988)

Features of the Intervention

The Washington State Employment and Training Act of 1993 (previously the Workforce Employment and Training Act of 1988 - ESHB 1988) was implemented in Washington State to provide employment and training, which included re-training at colleges, specifically for displaced individuals who claimed unemployment insurance. The re-training included basic skills training or occupational training and the state also funded financial assistance and child care as a part of the Act.

All 32 of the community and technical colleges across the state provided training through the Act. Activities under the funding included the expansion of training programs or new training programs that included courses that were vocational, support or basic skills related, or part of “New Chance” programming that supported students entering into a new line of work. In order to receive the program, participants had to be currently receiving unemployment insurance benefits, have been eligible for them in the last 24 months, or received notice of an impending job loss from their employer and be eligible for unemployment benefits upon lay off. The program targeted displaced workers as the priority group.

Features of the Study

The study used a nonexperimental design to compare the earnings of displaced workers who received re-training under ESHB 1988 to displaced workers who did not receive re-training. The authors used administrative data from the Washington State's Employment Security Department quarterly earnings history merged with transcript data from Washington's community colleges. The study sample included a subset of displaced workers who were included in the Washington State wage and salary workforce, and specifically, those who had some wage or salary in the state during each year from 1984 through 1995 with the exception of the two years post-job loss. The sample included 37,932 individuals who were in community college programs in the state with 9 percent of those who were a part of the ESHB 1988 program. Using statistical models with control variables, the authors examined the difference in earnings between displaced workers who completed the re-training program and those who did not.

Findings

Earnings and wages

  • Compared to non-trainees, the study found that the re-training was associated with increased long-term earnings ($51 more per quarter on average) for displaced individuals who completed at least one course. The authors did not report the statistical significance of this difference.
  • In the short-term, displaced workers who participated in the re-training earned $367 less in the first quarter after re-training than their non-participating counterparts. However, by 12 quarters post-completion of the re-training, individuals who participated in re-training made $175 more per quarter than the comparison group. The authors did not report the statistical significance of these differences

Considerations for Interpreting the Findings

The authors note that their findings on earnings and re-training may be overstated due to unobserved characteristics, such as motivation to enroll in community college courses.

Causal Evidence Rating

The quality of causal evidence presented in this report is moderate because it was based on a well-implemented nonexperimental design; this is the highest causal evidence rating possible for a nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to the Washington State Employment and Training Act of 1993 (ESHB 1988), but other factors might also have contributed.

Reviewed by CLEAR

January 2021

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