Report

US – Few rigorous evaluations exist to measure the success of government-funded training programs the Council of Economic Advisers says

For the first time since the Government began tracking job openings nearly 20 years ago, there are more job openings in the United States than unemployed people looking for work. In fact, there are over 1.6 million more job openings than unemployed people. Because of the Trump Administration’s pro-growth policies, the American worker is in great demand. In a 2019 survey by the National Federation of Independent Businesses, a quarter of small businesses reported that their single most important problem is finding workers with the skillset employers need. In an effort to address this issue, the Trump Administration is striving to connect job seekers with the resources and tools necessary to find employment. This includes ensuring that those seeking employment have the skills and training necessary to fill available jobs. In an effort to satisfy employer needs, the Trump Administration has launched initiatives like the Pledge to America’s Workers. In less than a year since introducing the Pledge, companies and trade groups have committed to provide almost 10 million Americans with education and training opportunities over the next five years and close the skills gap that currently exists in the American labor market.
In accordance with the Executive Order Establishing the President’s National Council for the American Worker, the Council of Economic Advisers has prepared this report examining the evidence available on the effectiveness of government employment and training programs. According to the Office of Management and Budget, the Federal Government has 47 different employment and training programs spread across 15 different government agencies. Aggregate spending on these programs totaled $18.9 billion in 2019 alone.

This report sets out to assess how effective public programs are at increasing the wages and employment rates among program participants, but unfortunately, few rigorous evaluations exist to measure the success of government-funded training programs. Until recently, many job training programs frequently failed to track metrics that allow researchers to evaluate program returns to taxpayer dollars expended. Many public training programs have not undergone rigorous evaluation and therefore a framework needs to be established for evaluating trainee success, both by incorporating randomized control trials into program design and by improving data collection and long-term tracking of participant outcomes.
Among the training programs with available data and rigorous impact studies, the evidence shows that most government training programs are not effective at securing higher paying jobs for participants. For example, in an evaluation of the Workforce Investment Act training program using administrative data, two years after receiving training, workers who received intensive job search assistance had quarterly earnings that were $310 above that for workers who did not receive the intensive assistance. Yet in the first two years, no further wage gains were achieved among those who also were offered job training. While the benefits of services like job search assistance and career guidance are important, these services alone will not help workers who require new skills to compete in today’s economy. With the exception of the Registered Apprenticeship program, government job training programs appear to be largely ineffective and fail to produce sufficient benefits for workers to justify the costs. This highlights the importance of efforts such as those of the National Council for the American Worker to work with both public and private organizations to update and improve the nature of America’s job training programs as well as their evaluations.

The National Council for the American Worker is not only addressing these issues, but has set out to go even further by connecting State and local government resources with those of the Federal government. Enhanced transparency regarding outcomes will allow job seekers, policymakers, and program administrators to better understand which programs are working. Additionally, with better data, there are opportunities to learn from the successes and failures across public programs and shift resources to the types of programs that show the greatest returns.
With the creation of the National Council for the American Worker, the Trump Administration remains committed to developing a National strategy for training and retraining the workers needed across high-demand industries. The following report assists decision makers as they seek to ensure that America’s workers are well-equipped with the skills and training needed to excel in our nation’s booming economy.

 

Chosen excerpts by Job Market Monitor. Read the whole story at CEA – Government Employment and Training Programs: Assessing the Evidence on their Performance

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