New Estimates of Public Employment and Training Program Net Impacts: A Nonexperimental Evaluation of the Workforce Investment Act Program
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This paper presents nonexperimental net impact estimates for the Adult and Dislocated Worker programs under the Workforce Investment Act (WIA), the primary federal job training program in the U.S. The key measure of interest is the difference in average quarterly earnings or employment attributable to WIA program participation for those who participate, estimated for up to four years following entry into the program. These estimates of WIA program impact are based on administrative data from 12 states, covering approximately 160,000 WIA participants and nearly 3 million comparison group members. Propensity score matching methods are used to compare WIA program participants with comparison groups of individuals who are observationally equivalent across a range of demographic characteristics, social welfare benefit receipt, geographic area, and prior labor market experiences but who either did not receive WIA services or did not receive WIA training. The results for the average participant in the WIA Adult program show that participating is associated with a several-hundred-dollar increase in quarterly earnings. The marginal benefits of training may exceed $400 in earnings each quarter three years after program entry. Dislocated Worker program participants experience smaller benefits than for those in the Adult program. Although it is not possible to rule out the possibility that some of our estimates may be influenced by systematic selection, we undertake a variety of robustness tests suggesting that the general pattern of the results almost surely reflects actual program impacts on individual participants.
Department of Economics, 2009