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). Retrieved from W.E. Upjohn Institute for Employment Research website: http://dx.doi.org/10.17848/tr13-029%20 [Community and Technical College Worker Retraining Program]
Highlights
- The study’s objective was to examine the impact of the Community and Technical College (CTC) Worker Retraining (WR) program on employment, earnings, and benefit receipt of long-term unemployed and dislocated workers who are eligible for or have exhausted their unemployment benefits in Washington State.
- The authors assigned workers to the treatment group if they received training through the CTC WR program and exited from July 2005 to June 2006 or from July 2007 to June 2008. The comparison group comprised workers who registered at the Labor Exchange.
- The study found that both short- and long-term employment and earnings increased for those who participated in the WR program compared to those in the Labor Exchange.
- 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 CTC WR program; other factors are likely to have contributed.
Intervention Examined
Community and Technical College Worker Retraining (CTC WR) Program
Features of the Intervention
The CTC WR program in Washington state offers skills and technical training at community and technical colleges for those who have been unemployed for a long time or are dislocated workers. This program provides training for jobs that do not require a bachelor’s degree, and also offers training in basic skills, literacy, and apprentice instruction when funds are available. The program offers financial aid to offset the cost of tuition, child care, and transportation. To be eligible for the WR program, workers must be eligible for Unemployment Insurance benefits or have exhausted their Unemployment Insurance benefits within the last 24 months.
Features of the Study
The study included a sample of 5,679 participants in Washington State who exited the WR program from July 2005 to June 2006 and 4,154 who exited from July 2007 to June 2008. Participants had to be unemployed or have received notice that they were about to be laid off, and they had to be eligible for Unemployment Insurance benefits or have exhausted their Unemployment Insurance benefits within the last 24 months. The sample of participants was 41 years old on average, 56 percent female, and 28 percent of ethnic minority. The comparison group comprised those who registered at the Labor Exchange and were ages 16 to 60.
The authors used administrative data from unemployment insurance records to compare the employment rate, average quarterly earnings, and receipt of benefits for those who participated in the WR program to those who registered for services at the Labor Exchange.
Findings
Employment
- The percentage of quarters employed increased significantly by 8.8 percentage points in the third quarter after program exit and 7.5 percentage points in quarters 9–12 after program exit for those who took part in the WR program compared to those who registered at the Labor Exchange. The hours per quarter worked by the treatment group increased significantly relative to the comparison group—by 47.1 hours in the third quarter after program exit and 44.0 hours in quarters 9–12 after program exit.
Earnings and wages
- Average quarterly earnings increased significantly by $705 in the third quarter after program exit and $959 in quarters 9–12 after program exit for those who took part in the WR program compared to those who registered at the Labor Exchange. The average hourly wage of the treatment group increased significantly relative to the comparison group—$1.17 in the third quarter after program exit and $2.01 in quarters 9–12 after program exit.
Public benefits receipt
- The study found no significant differences in the rate of benefit use or benefit value among WR program participants and those who registered at the Labor Exchange.
Considerations for Interpreting the Findings
Although the authors accounted for many underlying characteristics of the groups being compared, their decision to define the groups based on date of program exit rather than program entry is problematic. For example, suppose that the WR program participants and the Labor Exchange participants were on identical wage trajectories before receiving services from their respective programs, and suppose that the average length of participation in the WR 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 be looking at WR program 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 WR program participants earned more 6 months after their exit dates. However, this would not be attributable to receiving WR program training; it would be caused by the difference in elapsed time (12 months for WR program 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 treatment is confounded with systematic differences in outcome measurement follow-up length for treatment and comparison group members. This means we are not confident that the estimated effects are attributable to CTC WR program; other factors are likely to have contributed.