Solving the Reemployment Puzzle: From Research to Policy

Ch 7 - Public Job Training and Training Vouchers

239 7 Public Job Training and Training Vouchers As a result of post–World War II economic and trade policies, the U.S. Department of Labor has operated public job training programs for over five decades. The goal of national job training programs has been to improve the operation of labor markets by enhancing the skills of individuals facing barriers to employment. The programs have been unstable, with changing objectives, different target populations, varying program components, changing administration and operational methods, and fluctuating funding levels. Early programs reflected concern about the loss of jobs resulting from automation. The Area Redevelopment Act of 1961 provided loans to businesses in depressed regions of the country as well as loans for job training. In 1962, the Manpower Development andTrainingAct program began and was administered as an intergovernmental partnership with the states. Initially funds were provided for dislocated workers, but after the enactment of the Economic Opportunity Act in 1964, the emphasis shifted to alleviating poverty by providing training to disadvantaged adults and youth. The Comprehensive Employment and Training Act (CETA) was enacted in 1973 under President Nixon. Under the new act the administration and operation of training programs devolved to the states and local entities, consistent with that administration’s revenue sharing policy. CETA also provided work experience to unemployed workers in the form of public service employment. In 1982, the Reagan administration shifted course, supporting the enactment of the Job Training Partnership Act (JTPA). JTPA further decentralized training programs to the local level and eliminated public service employment. Program coordination between JTPA’s locally administered Private Industry Councils and its partner workforce development agencies— the state-administered Employment Service (ES) and Unemployment Insurance (UI) programs—became even more difficult. Under JTPA, programs for disadvantaged adults and youth were retained, and a dis- 240 Wandner located worker program was added, but funding levels for the programs were reduced (LaLonde 1995). Since the mid-1990s, two major factors have altered the nature of training programs in the United States: 1) the introduction of OneStop Career Centers, which further linked training programs with the ES and other partner agencies, and 2) the enactment of the Workforce InvestmentAct (WIA), with its introduction of training vouchers. These developments have taken place in the context of stagnant nominal funding throughout the 1990s and funding declines during the Bush II administration. (See Table 6.1.) These two developments were accompanied by further sharp declines in real funding levels. As a result, both the concept of universal access to workforce services (a concept central to the One-Stops) and the expectation of substantial availability of training services following core and intensive services have proven to be highly unrealistic. This chapter examines both of these developments, concentrating on research and policy relating to the One-Stop centers and training vouchers. The chapter begins with a brief overview of selected research and evaluation findings regarding training programs, and then summarizes more recent research and evaluations. It then looks at recent training policy relating to the impact of One-Stops and training vouchers and assesses the extent to which policy has followed the lessons learned from research. Much of this chapter analyzes training vouchers, including the Individual TrainingAccounts (ITAs) that were implemented under the WIA. Attention is also paid to new research findings from studies completed since WIA’s implementation in 2000. Particular emphasis is placed on studies completed between 2001 and 2008 that were withheld by the U.S. Department of Labor and not published until the end of the Bush administration. COST-EFFECTIVENESS OF U.S. TRAININg PROgRAmS: AN OVERVIEW OF EVALUATION RESULTS Researchers have found a fundamental problem in the public provision of training by employment and training programs: the training that Public Job Training and Training Vouchers 241 is provided is not extensive enough to have an economic impact equivalent to education and prolonged training. A comprehensive review of the evidence for government-sponsored training’s effectiveness for low-income and dislocated workers in the United States and in other countries concludes that it is unlikely that short-term training programs could significantly increase the skills of the American labor force, even if they were significantly better funded. Government-sponsored training programs fail because they consist of short-term, low-cost training. The authors point out that a 10 percent rate of return on training would be very high. Thus, if training has an average cost of...