Citation
McEntaffer, M. J. (2015). The promise of worker training: New insights into the effects of government funded training programs. (Doctoral dissertation). Retrieved from http://digitalcommons.unl.edu/businessdiss/51.
Highlights
- The study’s objective was to examine the impact of participation in a Workforce Investment Act (WIA) occupational skills training (OST) or on-the-job training (OJT) program on employment and earnings.
- In a nonexperimental analysis, the author compared average employment rates and earnings for people who received OST or OJT to those who did not receive either employment service. Employment and earnings data came from payroll tax records.
- The study found that individuals participating in OST or OJT were more likely to be employed and had higher earnings in the first and third quarters after exiting the program.
- The quality of causal evidence presented in this report is low because the author 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 employment training programs; other factors are likely to have contributed.
Intervention Examined
The WIA Employment Training Programs
Features of the Intervention
The intervention involved participation in one of two WIA employment training programs: OST or OJT. OST builds skills for specific occupations and includes participating in seminars, certification programs, or degree programs. OJT usually requires an individual’s placement on a job site for 480 hours of temporary employment; the firm can then choose to hire the employee. Job seekers who registered for employment services at a South Dakota local office system (SDLOS) from January 2002 to December 2011, were ages 20 to 65 at registration, and had earned no higher than a bachelor’s degree were eligible for services. After several meetings with the job seeker, SDLOS recommended OST, OJT, or other services including career counseling and interview coaching.
Features of the Study
In a nonexperimental analysis, the author compared the outcomes of individuals who received OST or OJT to those who did not receive either. Of the 6,322 eligible cases, 2,263 received OST, 344 received OJT, and 3,715 received neither OST nor OJT (but may have received other services). The author used quarterly data from payroll tax records to establish employment status (at the beginning of each quarter) and earnings (across the entire quarter) for the first and third quarters after exiting the SDLOS program.
Findings
Employment
- The study found that individuals participating in the WIA OST or OJT employment training programs were significantly more likely than individuals who did not participate to be employed in the first quarter after exiting the training program by 3 percentage points for OST and 9 percentage points for OJT. Individuals participating in OST or OJT were significantly more likely to be employed in the third quarter after exiting the training program by 3 and 7 percentage points, respectively.
Earnings and wages
- Individuals participating in OST or OJT had significantly higher earnings in the first quarter after exiting the training program by $505 and $819, respectively. Individuals participating in OST or OJT had significantly higher earnings in the third quarter after exiting the training program by $708 and $567, respectively.
Considerations for Interpreting the Findings
The author showed that OST and OJT participants were similar to the comparison group in terms of employment status and earnings for two quarters before the program, except that OST participants had lower earnings than the comparison group. However, because earnings of workers receiving employment services tend to dip in the year before they enter the program, it is necessary to show that program and comparison groups are similar on pre-program measures for more than one year before program entry to ensure that existing trends in outcomes will not lead to incorrect conclusions about program effectiveness.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the author 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 employment training programs; other factors are likely to have contributed.