Policy Background: The Workforce Investment Act

1. The Effects of Customer Choice:First Findings from the Individual Training Account (ITA) ExperimentMathematica Policy Research, Inc.Social Policy Research AssociatesPresenter: Irma Perez-JohnsonDOL Workforce Innovations ConferencePhiladelphia, PA – July 11-13, 2005

2. Policy Background:The Workforce Investment Act • Key objective was to promote informed customer choice • Required use of ITAs to give customers choice of training program • Customer selections to be made from Eligible Training Provider lists • Established Consumer Report Systems to provide information on programs

3. Overview of the ITA Experiment • Goal was to assess important tradeoffs in the design of ITA approaches • Tested 3 approaches side-by-side in 8 LWIAs • Customers randomly assigned to approaches • Approaches selected to: • Reflect spectrum of emerging ITA approaches • Promote innovation in ITA program design

4. Approaches Tested

5. Evaluation Data Sources • Implementation Study* • Study Tracking System* • Analyzed data for 7,922 study participants • Follow-Up Survey • Unemployment Insurance Records * Data sources for interim report

6. Methodology • Estimate impacts on intermediate and final training outcomes • Intermediate outcomes: • Participation in counseling and training • Training choices • Final outcomes: • Completion of training • Customer satisfaction • Employment and earnings • Receipt of UI, public assistance • Cost of counseling, training

7. Responses to the ITA Approaches • Most customers came in with strong ideas about training • When counseling was voluntary, few customers used it • Counselors tended to defer to customer preferences • Local staff preferred Approach 2 (Guided Choice) • Private vendors repackaged their programs in response to caps • Little response from community colleges, universities

8. Mandatory Counseling Discouraged Use of ITAs *** Difference relative to A2 is statistically significant at 0.01 confidence level

9. Training Costs Highest Under Approach 1, Lowest Under Approach 2 NOTE: Cost estimates do not include WIA administrative costs or cost of ITA counseling. *** Difference relative to A2 is statistically significant at 0.01 confidence level

10. Limited Differences in Training Choices by Approach • ITA customers chose similar occupations • Private schools were the dominant provider regardless of approach • Approach 3 customers slightly more likely to choose community colleges • Approach 1 customers chose slightly longer programs

11. Remaining Questions • Do more counseling and/or higher caps lead to better customer outcomes? • Does lack of counseling lead to poorer customer outcomes? • What is the most cost-effective approach to structuring ITAs?

12. Remainder of ITA Experiment • Follow-up survey • Administrative records • Final report (summer 2006)