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. [Adults ONLY]
Highlights
- The study’s objective was to examine the impact of the Workforce Investment Act (WIA) adult program’s training services on the employment and earnings of low-income adults.
- The authors used statistical analysis to compare the earnings and employment outcomes of WIA-registered low-income adults who received training services to the outcomes of those who were registered in WIA but did not receive training services.
- The study found that total earnings in the third year after WIA registration were significantly higher for the treatment group than the comparison group. Individuals in the treatment group earned $1,257 and $1,703 more 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, but other factors might also have contributed.
Intervention Examined
Workforce Investment Act (WIA) Program Training Services
Features of the Intervention
The WIA adult program training services involved classes in occupational skills and on-the-job training provided by private firms. Selection into the training services could have occurred in a variety of ways, including referral from a training provider or program staff member, individual choice, or natural progression through prior services offered by WIA. There were no specific eligibility criteria for registering in the WIA program itself.
Features of the Study
The study implemented a nonexperimental analysis of the employment and earnings of WIA adult program participants in two states. State A, a medium sized state located on the East Coast, had 15,532 WIA adult program participants of whom 4,640 received the training services. State B, a large state located in the Midwest, had 23,182 WIA adult program participants of whom 11,380 received training services. Using data from the Workforce Investment Act Standard Record Data (WIASRD) and Longitudinal Employer-Household Dynamics (LEHD), the authors used a statistical technique (regression analysis 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
- In State A, the treatment group earned significantly less in the first three quarters and was significantly less likely to be employed in the first two quarters after WIA registration than those in the comparison group.
- Similarly, in State B, the treatment group earned significantly less in the first four quarters and was significantly less likely to be employed in the first three quarters after WIA registration than the comparison group.
- From quarters 6 through 12 after WIA registration, earnings and employment were significantly higher in every quarter for the treatment group in State A compared to the comparison group, with the exception of the quarter 8 in which employment was higher but the difference was not statistically significant.
- In State B, earnings and employment were higher for the treatment group than for the comparison group in every quarter starting in quarters 6 and 4 after WIA registration, respectively.
- Treatment group members in State A and State B earned $1,257 and $1,703 more, respectively, in the third year after WIA registration than those in the comparison group.
Considerations for Interpreting the Findings
The program was designed such that WIA participants would 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.
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 training services received but other factors might also have contributed.