Academic Literature

Individual Training Accounts in US – Programs do not accommodate workers from nonstandard work arrangements

This paper was commissioned by the Organisation for Economic and Co-operative Development (OECD) to describe the use of Individual Training Accounts (ITAs) under the Workforce Innovation and Opportunity Act and under its predecessor the Workforce Investment Act (WIA).

An ITA is a voucher that an individual who has met the requirements to establish an ITA can use to pay for a training program of his or her choice. Customers who are granted an ITA may use the funds assigned to their account to contract with a third-party training provider. However, an ITA is not an entitlement. Those who are granted an ITA must first be determined to be eligible for the WIOA programs, must work directly and in person with a career counselor to determine whether they need training, must develop an individual employment plan, and must choose a program that provides training in an occupation that is in demand by local employers and is offered by a qualified training provider. The amount of money available to a holder of an ITA may vary depending on need and available public funding, and that amount may change during the time an individual holds an ITA.

Particular interest is in the use of ITAs by WIOA participants from nonstandard work arrangements. The study provides detailed information about the use of ITAs by participants of the two adult programs under WIOA, Disadvantaged Adult Programs and Dislocated Worker Programs, and in two states, Michigan and Washington. Information for the WIOA programs is gathered and analyzed from the public-use version of the WIOA Participant Individual Record Layout (PIRL).

One of the unique features of the ITAs is the use of an informed choice model, in which participants, once determined eligible for training, have final say as to the training program they choose, but they must consult with WIOA counselors and standard information available through WIOA about the programs before making that choice.

The study finds that even between the two states, the use of training and ITAs varies widely across the two WIOA programs. That trend continued prior to WIOA when WIA was in effect. The study concludes that the two WIOA programs do not accommodate workers from nonstandard work arrangements, except for those who fit the eligibility criteria established by the WIOA Adult Program for low-income workers. The study points out that low-income workers are equally, if not more, likely to come from nonstandard work arrangements, such as self-employment, as from more traditional arrangements. However, both programs are geared to placing participants in standard work settings once they have completed the training or other services provided by the WIOA programs. The study informs current policy by pointing out the neglect of current public workforce programs to focus more on nonstandard work arrangements that exist within today’s workforce.

Chosen excerpts by Job Market Monitor. Read the whole story at “Individual Training Accounts and Nonstandard Work Arrangements” by Randall W. Eberts

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