Job Training Programs

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Job Training Programs

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Job Training Programs

• What has been tried? How well does it work?

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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.

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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.

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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.

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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 trainees
  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.

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Job Training Programs

• Evaluating job training programs
• What makes this so hard?

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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

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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.

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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?

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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?

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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?

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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.

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Job Training Programs

• Were those in treatment group treated?
• 72 enrolled
• Avg stay 8 months (though with large variation)

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Job Training Programs

• Impacts on Education and Training

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Job Training Programs

• Impacts on Earnings (using survey data)

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Job Training Programs

• Longer-term impacts on Earnings (all data)

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Job Training Programs

• Longer-term impacts by subgroup on earnings and
  arrests

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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?)