Job Training Programs

1. Job Training Programs

2. Job Training Programs • What has been tried? How well does it work?

3. Job Training Programs • Started in the 1960s (war on poverty) with Manpower Training and Development Act (MTDA) • Implemented a variety of job training programs including Job Corps • Updates include Comprehensive Employment and Training Act (CETA) in 1970s, Job Training Partnership Act (JTPA) in 1980s. • Both moved control over programs away from Federal Government toward state governments. • In 1998, Workforce Investment Act (WIA) • DOL was to provide “one-stop” service • These have generally been available to disadvantaged and other workers needing assistance, but all voluntary.

4. Job Training Programs • There were also a variety of training programs aimed at aid recipients that were mandatory. • Work Incentive Program (WIN) - 1967 • Required single parent recipients of AFDC who did not have pre-school aged kids to participate (consensus is that program had little effect) • Job Opportunities and Basic Skills (JOBS) – 1988 • More extensive than WIN, but still quite limited. • Welfare-to-work (WtW) - 1996 • Part of welfare reform (AFDC to TANF) • State based, with matching funds from Federal govt.

5. Job Training Programs • In addition to those mentioned, there are also numerous smaller state programs and federal pilot programs, or more specialized targeted programs. • In 1999, GAO identified 16 government sponsored training programs aimed at the economically disadvantaged, costing $16.2 billion and serving almost 3 million people. • Should we expect these programs to have an effect? • Largest program (under TANF) served almost 1 million people at a cost of about $1000/person • Second largest (Food Stamp Employment and Training Program) served around ¾ million people at cost of $266/person.

6. Job Training Programs • In 1999, US spent an average of $6500/student in school in 1 yr. • Typical estimates of return to a year of education are roughly 8% • So to get an increase of 10% in each trainee’s earnings capacity, govt would have to spend roughly $8000. • Of all programs, only WtW, Job Corp, and a couple of local programs spend anywhere near that much (cover only 200,000 participants) • Most training programs focus on resume/application writing, interviewing, job search skills. • Not really new “productive” skills, rather skills that help participants distinguish themselves over other low-skilled workers.

7. Job Training Programs • Evaluating job training programs • What makes this so hard?

8. Job Training Programs • Schochet, Burghardt, and McConnell. (2009). “Does Job Corps Work? Impact Findings from the National Job Corps Study.” American Economic Review. • Job Corps • 16-24 yr old • Legal US resident • Economically disadvantaged • Live in environment characterized by disruptive homelife, high crime neighborhood, limited job opportunities • Need additional education, training, and job skills • Free of serious behavior problems

9. Job Training Programs • Program focused around residential job training centers. • Training available for a variety of trades and academic skills (including GRE) • Length of training varied, but on average 8 months. • After completion, Job Corps placement services helps with job search. • In 1995, services cost about $16,500 per participant.

10. Job Training Programs • Study • Interested in the long-term effects of Job Corps on education, earnings, and arrests. • How does this study overcome the selection problem? • Given the sampling methodology, what question can this study hope to help answer? What questions can it not answer?

11. Job Training Programs • Study can answer: • “What is the average effect of being allowed to enroll in Job Corps on outcomes for volunteering eligible individuals above and beyond other available programs?” (Impact per eligible applicant) • “What is the average effect of enrolling in Job Corps on outcomes for volunteering eligible individuals above and beyond other available programs?” (IV estimates) (Impact per eligible participant) • What is difference?

12. Job Training Programs • What study cannot answer: • “What is the average effect of being allowed to enroll or enrolling in Job Corps on outcomes for a randomly chosen individual?” • “What is the average effect of being allowed to enroll or enrolling in Job Corps on outcomes for a random eligible individual?” • Why not?

13. Job Training Programs • Data • Randomization occurred between Nov 1994 and Dec 1995 • Follow-up surveys 12, 30, and 48 months after random assignment. • Response rates for 48 month follow-up were 81% for treated, 78% for controls (what could be an issue here?) • Administrative earnings records • Tax records and • Unemployment insurance records.

14. Job Training Programs • Were those in “treatment” group treated? • 72% enrolled • Avg stay 8 months (though with large variation)

15. Job Training Programs • Impacts on Education and Training

16. Job Training Programs • Impacts on Earnings (using survey data)

17. Job Training Programs • Longer-term impacts on Earnings (all data)

18. Job Training Programs • Longer-term impacts by subgroup on earnings and arrests

19. Job Training Programs • In Summary, • Job Corps program seemed to have some effect on short-run • Participants get more training, earn more, and are arrested less in the 4 yrs after enrollment. • However, these effects are relatively small and appear to fade away over time. • The most affected group in the long-term is older youth who get involved. Appears to offer a different type of opportunity than otherwise available to turn life around. • More generally, most evidence suggests that tackling poverty via job training seems to be hard and expensive (should this really be surprising though?)