The American Recovery and Reinvestment Act: The Role of Workforce Programs

9 Data Analysis of the Implementation of the Recovery Act Workforce Development and Unemployment Insurance Provisions

267 9 Data Analysis of the Implementation of the Recovery Act Workforce Development and Unemployment Insurance Provisions Randall W. Eberts Upjohn Institute Stephen A. Wandner Urban Institute OVERVIEW This chapter uses administrative data to examine the response of the nation’s workforce system to the needs of workers during the recent recession and the Recovery Act funding period.1 The Recovery Act provided funds so that states could respond to worker needs at two levels. The first level expanded the short-term capacity of the workforce system to meet the surge in demand for reemployment services and training. This required more staff and office space and often an upgrade of telephone and Internet capabilities. The second level of response required strategic decisions to improve the infrastructure of the nation’s workforce development system. This included reshaping and improving the capacity of the system to meet future needs more efficiently and developing innovative service delivery systems that attempt to anticipate the changing structure of the workforce and the economy (USDOL 2009). Using state-level administrative data, this chapter examines the response of state workforce agencies in providing public workforce and unemployment insurance services to unemployed workers before, during , and after the recent recession. It tracks participant flows, service receipts, expenditures, and outcomes of the major workforce programs 268 Eberts and Wandner during this period. It also compares changes in the flow of services with changes in expenditures. In particular, it analyzes total expenditures and expenditures per participant, highlighting the reduction in expenditures per participant compared with prerecession levels, as the workforce programs were inundated with new participants. While the analysis is conducted at the state level, the results are aggregated to the national level in order for the chapter to fit within the page constraints.2 The chapter begins with a short review of the programs and data used for our analysis, described in the next section. The third section traces the flow of workers through the unemployment insurance (UI) system, the Employment Service, and the two adult WIA programs. The fourth section examines program expenditures and participation for the various programs. It specifically analyzes the difference between expenditures before the recession and during the Recovery Act period. The final section offers concluding remarks. Appendix B, starting on page 391, contains tables of the data used in the figures and tables in this chapter. WORKFORCE PROGRAMS AND DATA SOURCES During an economic downturn, the unemployed rely heavily on three basic workforce services for assistance in finding reemployment—1) unemployment compensation, 2) labor exchange and reemployment services, and 3) job training. The federal government, in partnership with states and local entities, provide these services through the Unemployment Insurance (UI) system, the Wagner-Peyser Act Employment Service (ES), and the Workforce Investment Act (WIA) programs. The UI system offers eligible unemployed workers cash assistance for up to 26 weeks in normal times and longer during recessions while they look for work. The Wagner-Peyser Act Employment Service provides job search assistance, such as help with writing résumés and accessing job postings. The WIA programs provide more intensive job search assistance and job training to dislocated workers and economically disadvantaged adults. Additional federally funded programs, including WIAYouth and Job Corps for youth, Trade Adjustment Assistance programs for workers displaced by foreign competition, and the Commu- Data Analysis of the Implementation of the Recovery Act 269 nity Service Employment Program for Older Americans (also known as the Senior Community Service Employment Program) for low-income workers over the age of 55, offer assistance, but these are not included in the analysis.3 This chapter uses administrative data from the U.S. Department of Labor’s reporting system.4 The data set covers participant and expenditure data for the three largest federally funded workforce programs: Unemployment Insurance (UI), the Wagner-Peyser Act Employment Service (ES), and the Workforce Investment Act (WIA) programs for Adults and for Dislocated Workers (DW).5 The data are collected quarterly for each state, the District of Columbia, and territories and are compiled in a database called the Public Workforce System Dataset (PWSD). For this analysis, the original database was updated to 2011Q3 for UI and the Employment Service and to 2011Q1 for the two adult WIA programs, the most recent data available at the time. TRACKING THE FLOW OF PARTICIPANTS THROUGH THE WORKFORCE SYSTEM This section provides a framework for tracking the flow of participants through the...