Report

The Training System in US – Complicated, hard to navigate, and under-funded

The American job training, or human capital development, system is complicated, hard to navigate, and under-funded. Yet at the same time it has significant strengths and many best practice and effective models.

The United States does not have a training system for adults if what is meant by the term “system” is a well-articulated set of programs or opportunities that fit together in a logical stepwise way and which are readily accessible to all those who are interested or need assistance. What the United States does have is a diverse set of opportunities, some large and some small, and for some of these we know what is best practice and for some we are in the dark about effectiveness. In this section we review each of these components.24 Before getting into the details it is worth emphasizing several important conclusions that will emerge.

First, the historical division of labor between firms and public training organizations that has underwritten the U.S. system appears to be in doubt. Although the data are weak there is at least reason to believe that firms are expecting public training institutions to play a greater role than they have in the past in providing specific vocational training. Whether this is a good thing or not is an open question.

Second, the view, often expressed by skeptics that training programs are ineffective is wrong. For intermediaries (a job training model) and community colleges there is strong reliable evidence that best practice programs pay off substantially for people who participate. The correct policy question is not whether anything works but rather how to diffuse best practice at scale.

Third, recent years have witnessed a proliferation of new models such as boot-camps, on-line options, and other institutions that deliver certification and training. We have very little information on the scope of these and which models if any are effective.

Community Colleges

Community Colleges, of which there are nearly 1,200, are America’s premier training institution. They enroll about six million students in credit courses of whom 40 percent are over age 24 and the strong majority of these older students are in vocational programs.26 In addition another six million people take non-credit courses and although these are poorly tracked it is reasonable to think that most are vocational and mostly populated by adults. Community college students in credit courses are disproportionally minority, first generation college and lower income. Among full time students 62% work as do 72% of part time students.27 Finally, in addition to traditional courses many community colleges offer customized training programs for firms aimed at either assisting them with their hiring needs or upgrading incumbent workers.

The scale of community colleges and the extensive vocational components make community colleges central to any training initiatives. In some sense the scale also implies that they add up to a “system” but in reality governance is highly decentralized not simply in the sense that States have far more control than the Federal government but also because in many States each community college has its own governing board and in some cases its own tax base.

The good news about community colleges is that when students complete a degree or certificate the rate of return is good. While RCTs are not available for standard programs sophisticated fixed effect modeling, sometimes using survey data and sometimes using administrative data, support this conclusion. For example an assessment using administrative data from six states found that completing an AA degree improved earnings by between $4,640–$7,160 compared to entering the college and not obtaining the credential. Smaller but positive results were also reported for completion of a certificate.28 Other studies reach similar conclusions.

All this said, there are important concerns regarding community colleges the most central of which is retention and graduation. Reported rates are weak—nationally 39.2 percent of community college full or part-time students who enrolled in 2012 earned a credential from either a two or four year school within six years of initial enrollment30—but these need to be taken with a grain in salt in part because they fail to take into account the inherent part-time nature of many students and in part they fail to accurately track transfers. This said, no one doubts that retention is a serious challenge and the explanations range from the fact that community colleges are underfunded relative to non-research four year schools, that community colleges are open enrollment and many students arrive unprepared for college level work, and community colleges often are confusing and lack clear pathways for students.

Intermediaries

Since the War on Poverty public policy has supported a web of job training programs, often income targeted and aimed at people in labor market difficulty. Too often these programs were short term, connected neither to employers nor to labor market demand, and of highly variable quality. All of this was reflected in the discouraging evaluation literature. The good news is that in the past decade or so a new model, often termed intermediaries or sectoral programs, has emerged and been shown via RCTs to be substantially more successful in connecting people to good jobs and raising earnings.

The core best practice components of intermediaries are close relationships with employers (the so-called dual customer model), support services and counseling for clients, and substantial investments in training. Depending on the specific program the actual training is either done by the intermediary itself or by a community college. If the training is the responsibility of the community college the intermediary works closely with that institution around issues of scheduling and support. In order to achieve the close relationship with employers intermediary staff become knowledgeable about the nature of the industry and the needs of employers. Intermediaries which adhere to this broad model may be sponsored by community groups, business associations, or unions. There are several national support organizations for intermediaries including the Aspen Institute Economic Opportunities Program, The National Fund For Workforce Solutions.
High quality evaluations show a substantial payoff to this model. A strong example is Project QUEST in San Antonio which was subject to an RCT with a nine year follow up. QUEST exemplifies the best practice elements described above. From year three to year nine participants earned significantly more than the control group and by year nine the gap was over $5,000 per year in annual earnings. These impacts are not unique to QUEST and other rigorous evaluations of best practice intermediaries also find positive results.

Employer Training

Firms have long been at the center of the American system of job training and the classic model has been that schools provide general skills training while the skills for specific jobs are provided by employers. A problematic aspect of this arrangement is the longstanding observation, supported by data, that the distribution of firm based training is tilted towards those at the higher end of the educational distribution. But this important qualification aside, from the overall perspective of the U.S. human capital system the division of labor between firms and schools has seemed workable and effective.

It is difficult to assess the extent to which this arrangement continues because reliable data on the firm based training are simply not available with the last national survey a decade old. Table 4 below shows what we know from national surveys and the conclusion is discouraging.

Suggestive as these data are it is important to note that they are old and more recent anecdotal evidence points in conflicting directions. On the one hand well publicized announcements by firms such as Amazon as well as broad interest in apprenticeship programs suggest a renewed commitment to training. On the other hand conversations with community colleges and intermediaries suggest that even in today’s tight job market getting the attention of employers, much less obtaining their cooperation, is very hard. In a review of the literature on employer involvement with public training programs Barnow and Spaulding also expresses concerns about its uneven and generally ineffective character.35 Other indicators also point down: in 2018 51 percent of firms surveyed by the Society For Human Resource Management (SHRM) provided undergraduate tuition assistance benefits and 49 percent graduate assistance and both these rates are down from 66 percent and 61 percent respectively in 2008.

The rhetoric of the employer community regarding the importance of public training systems, especially community colleges, suggests a possible effort to shift training costs to the public sector. A benign explanation would be shorter job tenures which make recouping of training costs more difficult or, alternatively, that skills are becoming more general, perhaps due to the increased importance of computer skills. A less benign explanation is simply cost shifting. Until we have better data we will not have an answer about trends or explanations.

Chosen excerpts by Job Market Monitor. Read the whole story at Employment and training for mature adults: The current system and moving forward

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