Citation
Hollenbeck, K., & Huang, W-J. (2006). Net impact and benefit-cost estimates of the workforce development system in Washington State. (Upjohn Institute technical report no. TR06-020). Kalamazoo, MI: W. E. Upjohn Institute for Employment Research. [WIA Dislocated Workers]
Highlights
- The study’s objective was to examine the impact of the Workforce Investment Act (WIA) Dislocated Worker Program on the employment rate, earnings, and public benefit receipt of dislocated workers in Washington State.
- The authors used a nonexperimental design to compare the short-term (3 quarters after program exit) and long-term (9 to 12 quarters after program exit) employment, earnings, and public benefit receipt between those who took part in the WIA Dislocated Worker Program and those who registered for employment services at the state Labor Exchange.
- The study found that, compared with those who registered for services at the Labor Exchange, participants in the WIA Dislocated Worker Program had higher employment and earnings, although the findings for public benefit receipt were mixed.
- The quality of causal evidence presented in this report is low because the authors compared the treatment and comparison groups at different follow-up points and the groups were therefore not equivalent. This means we are not confident that the estimated effects are attributable to WIA Dislocated Worker Program; other factors are likely to have contributed.
Intervention Examined
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The WIA Dislocated Worker Program was authorized by Title I of the Workforce Investment Act of 1998 and was superseded by the Workforce Innovation and Opportunity Act (WIOA), effective in July 2015.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 all people ages 18 and older through core services; these included job placement assistance, skills assessments, and provision of information on the labor market, among other services. In addition, 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. Recipients of public assistance and other low-income people received priority for intensive and training services in Local Workforce Investment Areas in which program funds were limited. 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 authors used a nonexperimental statistical procedure called propensity-score matching to create a comparison group of people who registered for services at the Labor Exchange and were similar to WIA Dislocated Worker participants in terms of gender, race, ethnicity, age, educational attainment, location, and employment history. The authors collected Unemployment Insurance records for those who had exited the WIA Dislocated Worker or Labor Exchange program from July 2001 to June 2002 to estimate the long-term impacts of the WIA Dislocated Worker program in quarters 9 to 12 after program exit. They also collected Unemployment Insurance records for those who exited the WIA Dislocated Worker or Labor Exchange program from July 2003 to June 2004 to estimate the short-term impacts in the 3 quarters following program exit. The 2,989 WIA Dislocated Worker participants who exited in 2001–2002 were matched to a sample of 2,556 comparison group members, which was drawn from the 174,958 adults who registered at the Labor Exchange. The 5,608 WIA Dislocated Worker participants who exited in 2003–2004 were matched to a sample of 4,394 comparison group members, which was drawn from the 147,600 adults who registered at the Labor Exchange. The authors then compared the employment, quarterly hours worked, quarterly earnings, hourly wages, and of public benefits of the WIA Dislocated Worker and comparison groups. Program participants were on average 41 years old; 37 percent of participants were female and 14 percent to 24 percent were minorities.
Findings
Employment.
- The authors reported that, compared with those who registered for services at the Labor Exchange, the percentage of quarters employed for those who took part in the WIA Dislocated Worker Program increased by 11.6 percentage points 3 quarters after program exit and by 6.4 percentage points 9 to 12 quarters after program exit. The average number of hours worked increased for the WIA Dislocated Worker group, with an average increase of 70.1 more hours worked 3 quarters after exit and 48.8 hours more worked 9 to 12 quarters after program exit.
Earnings.
- The authors reported that average quarterly earnings increased for those who took part in the WIA Dislocated Worker Program compared with those who registered at the Labor Exchange, with an average increase of $990 3 quarters after program exit and $684 9 to 12 quarters after program exit. The hourly wage also increased for the treatment group, with an average increase of $1.75 more per hour 3 quarters after exit and $0.86 more per hour 9 to 12 quarters after program exit.
Public benefits receipt
- The authors reported that, compared with those who registered with the Labor Exchange, the percentage of WIA Dislocated Worker program participants receiving Unemployment Insurance increased by 2.1 percentage points and the amount of benefits received increased by $39.70 three quarters after program exit. The amount of Unemployment Insurance benefit received 9 to 12 quarters after program exit also increased by $39.70. Temporary Assistance for Needy Families and food stamps benefits decreased for the WIA Dislocated Worker group compared with the Labor Exchange group (0.2 percentage points lower and $6.40 less for Temporary Assistance for Needy Families and 1.2 percentage points lower and $9.90 less for food stamps) 3 quarters after program exit. The amount of food stamps received 9 to 12 quarters after exit also decreased by $7.80.
Considerations for Interpreting the Findings
Although the authors accounted for many characteristics of the treatment and comparison groups in their analysis, the decision to define the groups based on their date of program exit rather than program entry is problematic. For example, if the average length of participation was 6 months for the WIA Dislocated Worker group compared with one month for the Labor Exchange group and we compared the groups’ earnings 6 months after their recorded exit dates, we would see WIA Dislocated Worker participants’ earnings about 12 months after they started receiving services and Labor Exchange participants’ earnings about 7 months after they started receiving services. If everyone stayed on their original upward-sloping wage trajectory, it would appear as though the WIA Dislocated Worker participants earned more 6 months after their exit dates. However, this would not be attributable to receiving WIA Dislocated Worker program services; it would be caused by the difference in elapsed time across the groups (12 months for WIA adult participants versus 7 months for Labor Exchange participants). Therefore, studies defining the groups based on exit date instead of entry date without accounting for program length can receive only a low evidence rating.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the authors compared the treatment and comparison groups at different follow-up points and the groups were therefore not equivalent. This means we are not confident that the estimated effects are attributable to WIA Dislocated Worker Program; other factors are likely to have contributed.
Additional Sources
Hollenbeck, K. (2011). Short-term net impact estimates and rates of return. In D.J. Besharov & P.H. Cottingham (Eds.), The Workforce Investment Act: Implementation experiences and evaluation findings (pp. 347-370). Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.