Absence of conflict of interest.
Citation
Andersson, F., Holzer, H. J., Lane, J. I., Rosenblum, D., & Smith, J. (2013). Does federally-funded job training work? Nonexperimental estimates of WIA training impacts using longitudinal data on workers and firms (Discussion paper no. 7621). Bonn, Germany: IZA. [Dislocated Worker Program ONLY]
Highlights
- The study’s objective was to examine the impact of the Workforce Investment Act (WIA) dislocated worker program’s training services on the employment and earnings of dislocated workers. The authors investigated similar research questions in another study. The other study examined the effects of WIA’s adult program’s training services on the employment and earnings of low-income adults.
- The authors used a regression model with inverse propensity weights to compare the earnings and employment outcomes of WIA-registered dislocated workers who received training services to the outcomes of those who were registered in WIA, but did not receive training services.
- The study found that employment was initially significantly lower for the treatment group than for the comparison group in the quarters after WIA registration (Quarters 1 and 2 in State A and Quarters 1–4 in State B), but later became and stayed significantly higher in general in Quarters 6 through 12 in both states. The treatment group earned significantly less than the comparison group in the three years after WIA registration. People in the treatment group earned an average of $5,567 and $5,227 less than those in the comparison group in State A and State B, respectively.
- 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 training services received from the WIA dislocated workers program, but other factors might also have contributed.
Intervention Examined
The Workforce Investment Act (WIA) Dislocated Worker Program
Features of the Intervention
The WIA Adult and Dislocated Worker Programs were authorized by Title I of the Workforce Investment Act of 1998 and superseded by the Workforce Innovation and Opportunity Act (WIOA), which became effective in July 2015. The Adult and 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 Adult Program served all people ages 18 and older, whereas the Dislocated Worker Program served people who had been laid off from their jobs, including those whose place of business had closed permanently and who were unlikely to return to their previous industry. WIA provided a variety of employment services for unemployed people at One-Stop centers, now called American Job Centers. Eligible workers could receive three tiers of services through WIA: core, intensive, and training services. In addition, some local areas provided supportive services such as child care, transportation, and work-related financial assistance to those who qualified.
Core services were provided to all customers who sought employment, educational information, or upgrades to their skill sets or employment. Core services were the first ones customers received from a One-Stop location. They included needs assessments, screening for service and program eligibility, a review of the customer’s occupational level and skill level, and career planning. In addition, customers may have received assistance with job searches or placement, and could engage in workshops and discussions. They could also access a list with detailed information on eligible training providers. Core services were typically activities that people did on their own with the help of software, online supports, and employment resources.
Intensive services were offered to people who could not find employment through core services. Intensive services included career assessments, counseling (individual or group), support services such as child care and mileage reimbursement, and an individual employment plan, which was used to determine if the person would require more services.
Training services were offered to those who could not receive employment through core and intensive services. The training services involved classes in occupational skills and on-the-job training provided by private firms. People could be selected for training services in a variety of ways, including being referred by a training provider or program staff member, entering by their own choice, or progressing through the prior core and intensive services offered by WIA. Training was provided in areas with employment growth and had to be completed in two years. People who completed the training received an educational credential such as a diploma, degree, or skill certificate.
Features of the Study
The study implemented a nonexperimental analysis of the employment and earnings of people who participated in the WIA dislocated worker program in two states. State A, a medium-sized state on the East Coast, had 10,836 program participants, of whom 4,347 received the training services. State B, a large state in the Midwest, had 28,246 participants, of whom 16,187 received training services. Using data from the Workforce Investment Act Standard Record Data (WIASRD) and Longitudinal Employer-Household Dynamics (LEHD), the authors estimated a regression model using inverse propensity weighting that compared the treatment group of participants who received training services to the comparison group of participants who did not receive training services. The comparison group was selected to match the treatment group in terms of demographic characteristics and prior employment and earnings.
Findings
Employment
- In State A, the treatment group was significantly less likely than the comparison group to be employed in Quarters 1 to 3 after WIA registration, but was significantly more likely to be employed in Quarters 6 to 12.
- In State B, the treatment group was significantly less likely to be employed than the comparison group in Quarters 1 through 7 after WIA registration, but was significantly more likely to be employed in Quarters 11 and 12.
Earnings and wages
- In State A, the treatment group earned significantly less in Quarters 1 through 6 and Quarter 9 after WIA registration than the comparison group did.
- In State B, the treatment group earned significantly less in Quarters 1 through 7 than the comparison group. However, in Quarters 10 through 12, people in the treatment group earned significantly more than those in the comparison group.
- In the three years after WIA registration, treatment group members in State A and State B earned an average of $5,567 and $5,227 less, respectively, than those in the comparison group. These findings are statistically significant.
Considerations for Interpreting the Findings
The program was designed for WIA participants to receive core and intensive services, followed by training if they were still not employed. However, in practice, some participants received training without receiving core or intensive services. Thus, the treatment in this study can be understood as training plus the opportunity to receive core and intensive services, whereas the comparison condition is the opportunity to receive core and intensive services only.
The authors made a large number of comparisons in the earnings and employment domains without adjusting for these multiple comparisons. A large number of comparisons increases the probability that some impacts are found to be statistically significant by chance. After CLEAR adjustments, the impact of training services on third-year earnings in State A was no longer statistically significant.
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 WIA’s program training services for dislocated workers, but other factors might also have contributed to the effects.