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Training program impacts and the onset of the Great Recession. [Dislocated worker sample] (Heinrich & Mueser 2014)

Citation

Heinrich, C.J., and Mueser, P. (2014). Training program impacts and the onset of the Great Recession. Columbia, MO: Department of Economics, University of Missouri-Columbia, unpublished. [Dislocated worker sample]

Highlights

  • The study’s objective was to examine whether participation in the Workforce Investment Act (WIA) Dislocated Worker Program services increased participants' earnings and if so, whether those gains were greater during a recessionary period than in periods before and after the recession.
  • The authors analyzed administrative data to compare the quarterly earnings of participants receiving services through the WIA Dislocated Worker Program with those of a matched comparison group that received Wagner-Peyser Employment Services (ES). The study presented impacts separately by gender and program year.
  • The study found that males receiving services through the WIA Dislocated Worker Program from July 2007 to December 2007 (before the recession), from January 2008 to June 2008 (at the beginning of the recession), and from July 2008 to June 2009 (during the worst of the recession) earned less than males in the comparison group in most of the 16 follow-up quarters examined. In no quarter did females participating in the WIA Dislocated Worker Program before, during, or after the recession earn more than females in the comparison group.
  • The quality of causal evidence presented in this report is moderate because it was based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to the WIA Dislocated Worker Program services, but other factors might also have contributed.
  • The report also examined the impacts of WIA Adult Program services; that profile is available here.

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The WIA Dislocated Worker Program was authorized by Title I of the Workforce Investment Act of 1998 and was superseded by the Workforce Innovation and Opportunity Act (WIOA), effective in July 2015.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 workers who had been laid off from employment, including those whose employers had closed permanently and who were unlikely to return to their previous industry of occupation. Eligible workers could receive three tiers of services through WIA. Core services were available to everyone and included job placement assistance, skills assessments, and provision of information on the labor market, among other services. 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. 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 treatment group included workers who participated in WIA Dislocated Worker Program services in Missouri from July 2007 to June 2010, regardless of the tier of services they received. The authors used a statistical technique called propensity-score matching to create a comparison group of workers who received ES services, which included job search assistance. Those selected for the comparison group were as similar as possible to the treatment group on demographic characteristics and previous earnings history. The resulting sample included 13,946 treatment group members and matched comparisons.

The authors used WIA and ES administrative data and wage/earnings data from Missouri’s Department of Labor and Industrial Relations. They estimated differences in quarterly earnings between the treatment and comparison groups after adjusting for demographic characteristics and pre-program employment and earnings history. They presented results by gender and program year.

Findings

  • Male dislocated workers who received WIA services from June to December 2007 (before the recession) earned $500 to $1,000 less, on average, than the comparison group in almost every quarter.
  • Male dislocated workers who received WIA services from January to June 2008 (at the beginning of the recession) earned less, on average, than the comparison group in quarters 1 through 6 and quarters 8 through 10, whereas males receiving services from July 2008 to June 2009 (during the worst of the recession) earned less, on average, than the comparison group in quarters 1 through 11.
  • Male dislocated workers who received services through the WIA Dislocated Worker Program from July 2009 to June 2010 (at the beginning of the recovery) earned more, on average, than the comparison group in quarters 9 through 12 after program entry.
  • Female dislocated workers who received WIA services earned less, on average, in most quarters than females in the comparison group. This held regardless of whether they received services before, during, or after the recession.

Considerations for Interpreting the Findings

The authors included in the treatment group workers who had received any tier of WIA services. All participants received core services, although 70 to 90 percent (depending on the year examined) received either intensive or training services, and about 30 to 50 percent received training. The authors noted that the results from Missouri, where the effects of the recession were greater and the recovery slower than in other states, might not be representative of the United States as a whole.

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 means we are somewhat confident that the estimated effects are attributable to the WIA Dislocated Worker Program services, but other factors might also have contributed.

Reviewed by CLEAR

December 2016