Realigning Incentives and Funding to Improve Job Training and Creation
Realigning Incentives and Funding to Improve Job Training and Creation
The expert testimony, research, scholarship, and lived experience collected by the Commission revealed the following:
- Federal Reserve economists conducted an analysis of factors impacting per capita income growth and the growth of metropolitan areas at large for nearly 120 metropolitan areas throughout the U.S. as part of a report for the Fund for Our Economic Future based in Northeast Ohio (Eberts et al., 2006). The researchers identified eight key variables that influence economic growth on the regional level, including a region’s skilled workforce, active small businesses, ethnic diversity and minority business ownership, level of racial inclusion, costs associated with a declining industrial base, income inequality (measured by income disparity and number of children living in poverty), quality of life variables (including universities, recreation, and transportation), and concentrated poverty in core cities (Eberts et al., 2006).
- Although unemployment rates have gone down in the St. Louis region in the past five years, finding employment still remains an issue for many, specifically low and very-low income residents (U.S. Bureau of Labor Statistics, 2015).
- The State of St. Louis Workforce annual survey showed that a shortage of workers with knowledge or skills is the most frequently cited (by area employers) barrier to expanding employment–a trend that has consistently grown over the past several years (St. Louis Community College:Workforce Solutions Group, 2015).
- In the tightening labor market, employers’ flexibility in selecting a qualified workforce has diminished, and they are increasingly required to address training and development of their workforce and/or pay higher wages (St. Louis Community College:Workforce Solutions Group, 2015).
- There are jobs available for people with a lower level of education and work experience, and there exists on-the-job training and tuition reimbursement programs provided by employers, but there also remain barriers to effective job training and creation in the region. Considering the large disparities facing the poor, minorities, and the long-term unemployed, direct job creation may help to generate net increases in labor demand, though with a high price over the short term (Holzer 2012a; King 2011).
- At times, tax credits, such as the Targeted Jobs Tax Credit and the Work Opportunity Tax Credit, have been used to incentivize hiring of certain groups of disadvantaged workers. But research suggests that these public tax credits for private-sector employment have failed to provide necessary returns on investment (Holzer 2012a). Estimated outcomes of these credits suggest positive employment effects on employment while such programs are in place, but few lasting effects for workers over time (Holzer 2012a).
- A review of workforce programs enacted since 2000 has “demonstrated the value of training and workforce services, especially for disadvantaged individuals” (Ridley & Kenefick, 2011).
- One size does not fit all in terms of job training programs and models, especially for disadvantaged men (age 25 or older) (Greenberg 2003; Holzer 2012a). And a consistent thread through previous research indicates that existing employment training programs fail to serve job seekers with particular challenges, including severe mental illness, long-term employment, or very little education (Holzer 2012a; Holzer 2012b).
- Research has identified factors that make a job training program more likely to be successful (U.S. Department of Labor, 2014).
These findings prompted the Commission to draft several calls to action that address incentives for job training and creation.
To that end, the Commission issues the calls to action found below.
Suggested Reading List
Greenstone, M., & Looney, A. (2011). Building America’s job skills with effective workforce programs:A training strategy to raise wages and increase work opportunities. Washington, DC:The Brookings Institute. Retrieved from:
- Barnow, B. S., & Smith, J. (2015). Employment and training programs. Cambridge, MA:National Bureau of Economic Research. Retrieved from: https://www.nber.org/chapters/c13490.pdf
- Bloom, D. (2010). Transitional jobs:Background, program models, and evaluation evidence. New York:MDRC. Retrieved from: https://www.acf.hhs.gov/sites/default/files/opre/tj_09_paper_embed.pdf
- Bloom, D. & Butler, D. (2007). Overcoming Employment Barriers:Strategies to Help the “Hard to Employ”. In Holzer, H.J. & Nightingale, D.S. (eds) Reshaping the American Workforce in a Changing Economy. Washington, D.C.:The Urban Institute Press.
- Bloom, D.; Rich, S.; Redcross, C.; Jacobs, E.; Yahner, J.; & Pindus, N. (2009). Alternative welfare-to-work strategies for the hard-to-employ:Testing transitional jobs and pre-employment services in Philadelphia. New York:MDRC. Retrieved from: https://www.mdrc.org/sites/default/files/full_19.pdf
- Burchfield, E. (2002). Community Jobs Program Moves People from Welfare to a Career Track:Outcomes Assessment Summary, April 2002.Economic Opportunity Institute Blueprint:New Tools for Building the Middle Class. Retrieved from: https://www.eoionline.org/wp/wp-content/uploads/state-economy/CJProgramMovesPeople-Apr02.pdf
- Bureau of Labor Statistics (2015). Database, tables & calculators by subject. U.S. Department of Labor. Retrieved from: https://data.bls.gov/pdq/SurveyOutputServlet.
- Derr, M.K.; Pavetti, L.; & KewalRamani, A. (2002). Georgia GoodWorks!:Transitional work and intensive support for TANF recipients nearing the time limit. Washington, DC:Mathematica. Retrieved from: https://www.mathematica-mpr.com/~/media/publications/PDFs/goodworks.pdf
- Eberts, R., Erickcek, G., & Kleinhenz, J. (2006). Dashboard Indicators for the Northeast Ohio Economy:Prepared for the Fund for Our economic Future, Working Paper 06-05. Cleveland:The Federal Reserve Bank of Cleveland. Retrieved from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1022345
- Greenberg, D. H., Michalopoulos, C., & Robins, P. K. (2003). A meta-analysis of government-sponsored training programs. Industrial and Labor Relations Review, 57(1), 31-53. DOI:10.1177/001979390305700102
- Greenstone, M., & Looney, A. (2011). Building America’s job skills with effective workforce programs:A training strategy to raise wages and increase work opportunities. Washington, DC:The Brookings Institute. Retrieved from: https://www.brookings.edu/~/media/research/files/papers/2011/11/training-greenstone-looney/11_training_greenstone_looney.pdf
- Heckman, J. J., & Smith, J. A. (2003). The determinants of participation in a social program:Evidence from a prototypical job training program (NBER Working Paper No. 9818). Cambridge, MA:National Bureau of Economic Research. Retrieved from: https://www.nber.org/papers/w9818.pdf
- Holzer, H. J. (2012a). Going, going… gone? (Draft). The evolution of workforce development programs for the poor since the War on Poverty. Ann Arbor, MI:National Poverty Center. Retrieved from:https://npc.umich.edu/news/events/war-on-poverty-june-conference/holzer.pdf
- Holzer, H. J. (2012b). Good workers for good jobs:Improving education and workforce systems in the US. IZA Journal of Labor Policy, 1(5). DOI:10.1186/2193-9004-1-5
- Hotz, V. J., Imbens, G., & Klerman, J. A. (2006). Evaluating the differential effects of alternative welfare-to-work training components:A re-analysis of the California GAIN program (NBER Working Paper No. 11939). Cambridge, MA:National Bureau of Economic Research. Retrieved from: https://www.nber.org/papers/w11939.pdf
- Jacobs, E. (2012). Returning to work after prison:Final results from the transitional jobs reentry demonstration. New York:MRDC. Retrieved from: https://www.mdrc.org/sites/default/files/full_626.pdf
- Jacobs, E. & Bloom, D. (2011). Alternative employment strategies for hard-to-employ TANF recipients:Final results from a test of transitional jobs and preemployment services in Philadelphia. OPRE Report 2011-19. Washington, DC:Office of Planning, Research and Evaluation, Administration for Children and Families, U.S. Department of Health and Human Services.
- King, C. T., & Heinrich, C. J. (2011). How effective are workforce development programs? Implications for U.S. workforce policies. Paper presented at Association for Public Policy Analysis and Management Fall Research Conference. Retrieved from:
- Kirby, G.; Hill, H.; Pavetti, L.; Jacobson, J.; Derr, M.; & Winston, P. (2002). Transitional jobs:Stepping stones to unsubsidized employment. Washington, DC:Mathematica. Retrieved from:
- LaLonde, R., & Sullivan, R. (2010). Vocational training. In P. B. Levine & D. J. Zimmerman (Eds.), Targeting investments in children:Fighting poverty when resources are limited (pp. 323-349). Cambridge, MA:National Bureau of Economic Research. Retrieved from: https://www.nber.org/chapters/c11732.pdf
- Office of Planning, Research and Evaluation (OPRE). (2015). Enhanced Services for the Hard-to-Employ Demonstration and Evaluation Project, 2001-2012. Retrieved from: https://www.acf.hhs.gov/programs/opre/research/project/enhanced-services-for-the-hard-to-employ-demonstration-and-evaluation
- Redcross, C.; Millenky, M.; Rudd, T.; & Levshin, V. (2012). More than a job:Final results from the evaluation of the Center for Employment Opportunities (CEO) transitional jobs program. OPRE Report 2011-18. Washington, DC:Office of Planning, Research and Evaluation, Administration for Children and Families, U.S. Department of Health and Human Services.
- Ridley, N. & Kenefick, E. (2011). Research shows the effectiveness of workforce programs. Center for Law and Social Policy. Retrieved from: https://www.clasp.org/resources-and-publications/files/workforce-effectiveness.pdf
- Schochet, P. Z., Burghardt, J., & McConnell, S. (2008). Does Job Corps work? Findings from the National Job Corps Study. American Economic Review, 98(5), 1864-1886. DOI:10.1257/aer. 98.5.1864
- St. Louis Community College:Workforce Solutions Group (2015). State of St. Louis Workforce. Bridgeton, MO:Retrieved from: https://www.stlcc.edu/Workforce-Solutions/St-Louis-Workforce/Reports/State-of-St-Louis-2015-Workforce-Report.pdf
- U.S. Department of Labor (2014). What works in job training:A synthesis of the evidence. Retrieved from: https://www.dol.gov/asp/evaluation/jdt/jdt.pdf
- UMSL (2013). Skills Gap Report. Retrieved from: https://www.umsl.edu/divisions/business/files/pdfs/skillsgap13_14.pdf
- Visher, C.A.; Winterfield, L.; & Coggeshall, M.B. (2005). Ex-offender Employment Programs and Recidivism:A Meta-Analysis. Journal of Experimental Criminology, 1:295-315.
- Wilson, D.B.; Gallagher, C.A.; & MacKenzie, D.L. (2000). A Meta-Analysis of Corrections-Based Education, Vocation, and Work Programs for Adult Offenders. Journal of Research in Crime and Delinquency, 37(4):347-368.