President George W. Bush's proposed U.S.
Department of Labor (DOL) budget for fiscal year (FY) 2003 is
intended to promote effective programs while reducing or
eliminating programs that are unproven or duplicative. The
Administration proposes $4.975 billion for job-training programs
authorized under the Workforce Investment Act of 1998 (WIA)--a $505
million reduction when compared to FY 2002. The budget also proposes
decreasing funding for Youth Formula Funds, Youth Opportunity
Grants, and Adult Employment and Training Activities.
Given the absence of empirical evidence
supporting the effectiveness of these programs, the
Administration's request for decreases in funding for WIA programs
is a move in the right direction. However, the Administration's
budget still requests nearly $5 billion in funding for questionable
DOL job-training programs, including $1.54 billion for
the Job Corps (which it has deemed a "highly successful" program despite
evidence to the contrary. Job Corps program has failed
to increase participants' wages to any substantial degree or to
move participants into full-time employment.
President's goal of linking funding to program effectiveness has
been further compromised by the U.S. Senate's Labor, Health and
Human Services, Education Appropriations Bill (S. 2766). This bill
continues the federal government's long history of funding
job-training programs without regard to effectiveness.
Senate intends to spend over $5.6 billion on Labor Department
job-training programs--a 13.2 percent increase over the
Administration's request. Rather than continuing to
spend tax dollars on job-training programs that are unproven or
have negligible positive effects on participants, the funding could
be more effectively allocated to reduce the federal government's
budget deficit (which is projected to be $145 billion for FY 2003 ) or to
support vital homeland security efforts.
crafting their version of the Labor, HHS, Education Appropriations
Bill for FY 2003, Members of the House now have an opportunity to
rectify the failure of both the Administration and the Senate to
curb wasteful spending. The call for reduced funding for federal
job-training programs is justified by the inability of these
programs to bring about substantial increases in the incomes of
participants and move participants into full-time employment. While
WIA programs have yet to be rigorously evaluated, similar programs
that were funded under the Job Training Partnership Act (JTPA) of
1982 were found to be largely ineffective.
the return of budget deficits and the high cost of combating
terrorism, Congress should reaffirm its commitment to de-fund
ineffective programs by:
- Further reducing funding for WIA programs
beyond the Administration's request, and
- Eliminating funding for the Job
Evolution of Federal Job-Training
Federal programs that were intended to
improve the lives of the economically disadvantaged through
work initiatives, including the Works Progress Administration (WPA)
and the Civilian Conservation Corps (CCC), were originally created
during the 1930s. Despite the fact that
civilian unemployment just prior to World War II was about the same
as it was when the WPA and CCC were created, support for job
programs continued to build after the war.
During the 1960s, the federal government
established job-training programs for the unemployed and
economically disadvantaged. These programs provided a combination
of remedial education, vocational training, on-the-job training,
subsidized work experience, basic life-skills training, and job
search assistance. Programs funded under the Manpower Development
and Training Act (MDTA) of 1962 were originally intended to
re-train workers dislocated by technological advances, but MDTA was
converted into a job-training program for economically
1973, MDTA programs were superseded by the Comprehensive Employment
and Training Act (CETA), which was designed to decentralize control
of federally sponsored job-training programs. Nearly a decade later,
charges of corruption and mismanagement contributed to Congress's
decision to replace CETA with the JTPA.
1998, the Workforce Investment Act (WIA), which superseded the
JTPA, was signed into law. WIA emphasized a "one-stop" approach in
which an array of job-training, education, and employment services
were provided to communities. In contrast to the JTPA,
state and local governments were given authority to tailor the
content of job-training programs to meet their specific needs.
Measuring the Impact of Job Training
There is still no consensus regarding the
ability of MDTA programs to increase the incomes of the
economically disadvantaged. Some evaluations of MDTA have found
that the program increased incomes, while other studies
reported a combination of outcomes--including positive, negative,
and/or no effect on income.
lack of consensus over the effectiveness of job-training programs
continued with regard to CETA, where evaluations again indicated
mixed results. Some studies found that CETA programs raised incomes
in some cases, while, in other cases, the programs had no effect on
participants' income. Other studies found that
the incomes of some CETA participants actually declined.
While the evaluations of major
job-training legislation such as MTDA and CETA have reported mixed
results, all of these studies suffered from methodical flaws that
reduced their ability to measure the impact of the programs they
researched. All of the studies cited above were quasi-experimental
in design and, as such, were likely
to exhibit selection bias. Selection bias occurs when there are
pre-existing differences between the intervention and control
groups that affect outcome measures. The evaluations of MTDA and
CETA were not rigorous enough to inform policymakers adequately
about the effectiveness of job training for the disadvantaged.
Determining the impact of social programs
requires comparing the conditions of those who had received
assistance with the conditions of an equivalent group that did not
experience the intervention. Experimental studies in which eligible
participants are randomly assigned either to intervention or to
control groups represent the "gold standard" of evaluation designs.
Random assignment allows the evaluator to test for differences
between the experimental and control groups that are due to the
intervention and not to pre-intervention discrepancies between the
federal government has sponsored experimental evaluations of at
least two major federal programs--JTPA and the Job Corps.
The National JTPA Study
JTPA evaluation tracked program effects for adult men and women,
and male and female out-of-school youths, over the course of 30
Three types of job-training activities were examined. The first,
classroom training, consisted mainly of occupational skills
instruction and basic education. The second intervention was
a combination of on-the-job training and job-search assistance. The third
type of training, "other services," offered different services to
participants on the basis of their age.
Adults mainly received job-search
assistance, customized occupational-skills training, and on-the-job
training. Youths were enrolled in
basic education courses along with "tryout employment," where
participants were hired on a probationary status to learn the job,
and "job shadowing," where they observed regular employees during
Income. Members of the intervention and control groups
were tracked over 30 months, and results were reported for three
periods: months 1-6, months 7-18, and months 19-30. Classroom
training for adult men and women failed to raise the incomes of
participants over the course of 30 months, and the other JTPA
interventions--on-the-job training and "other services"--failed to
raise the incomes of adult male participants.
Although, initially, the incomes of adult
women participating in on-the-job training/job search assistance
increased by an average of $484 (about $81 per month), this impact
was fleeting. During the subsequent
measurement periods of months 7-18 and 19-30, the incomes of the
women who received training did not differ from the incomes of the
women in the control group. Only the effect on the
income of women in the "other services" category was positive and
lasting. Women participants earned, on average, $478 more than
non-participants during the first six months, while the impact
increased to over $1,700 during the two subsequent time periods.
general, JTPA training had no significant positive impact on the
incomes of female and male youths. Of the three intervention types,
only female youths participating in on-the-job training/job search
assistance experienced an income increase during the first six
The average income increases of $762 during the first time period
faded away during the remaining 24-month follow-up period. For male
youths, the three types of intervention had no impact on income.
sum, JTPA programs were ineffective in raising the incomes of adult
males or male and female youths, while only the "other services"
elements appear to have had a sustainable impact on adult
JTPA's Effect on
Hourly Wages. A program's effect on participants' hourly
wages is an important indicator in any evaluation of job-training
programs. Human capital theory suggests that if job-training
programs do, in fact, increase the skills of participants, then
employers would be willing to pay program graduates higher hourly
wages in return for increased productivity. The JTPA programs did
not have a statistically measurable effect on the wages of adult
men and women (hourly wages of youths were not measured). This
indicates that, in the opinion of employers, JTPA did not increase
the skills of participants.
question may arise regarding how the incomes of some adult women in
certain programs increased in comparison to the control group if
their wages did not increase. This contradiction may be explained
by the fact that adult women participants worked more hours than
adult women in the control group. For adult women and men,
JTPA appears to be ineffective in boosting the skills of
participants to a level that would allow them to secure
The National Job Corps Study
Created in 1964, the Job Corps is a
residential job-training program that serves disadvantaged youths
aged 16-24 in more than 100 sites across the nation. In 2001, the
National Job Corps Study was published. Its primary hypothesis
relating to employment and earnings is that "youth who obtain Job
Corps education and training will become more productive and,
hence, will have greater employment opportunities and higher
earnings than those who do not."
While the Job Corps was founded to raise
the incomes of participants, its limited impact has not justified
the Administration's declaration that the program is effective. The
estimated average increase in the weekly incomes of participants
was never more than $25.20.
Participants responded to the Job Corps
differently by age, race, and ethnicity. The Job Corps did not
increase the earnings of 18 and 19-year-olds, who represent 32
percent of the population served by the program. During the fourth year of
the follow-up period, whites and blacks experienced small increases
in average earnings per week, while the Job Corps had no impact on
income for Hispanics and other minorities. These findings are
alarming, given that Hispanics comprise 18 percent of all youths
served by the program.
the course of the 48-month study period, Job Corps participants
actually worked less than the control group. Measured in the number
of weeks employed over the course of the study, Job Corps
participants were employed 45.2 percent of the time, while
non-participants were employed 46.9 percent of the time--a
difference of 1.7 percent. Despite being enrolled in
the Job Corps, participants failed even to put in a full year's
worth of work.
Impact of Job
Corps on Hourly Wages. Again, the best way to determine
whether the Job Corps raises the skills of its participants is to
look at the hourly wage of its graduates. If the Job Corps is
effective in improving the skills of its participants, then it
should have substantially raised the hourly wages they received.
The National Job Corps Study measured hourly wages during two time
periods. During the 10th quarter, Job Corps participants earned
$0.24 more per hour than non-participants. By the 16th quarter, this
difference had decreased to $0.22 per hour.
study revealed that the Job Corps also had little impact on
increasing the number of hours worked per week. During the course
of the study, the average time participants spent working each week
never rose above 28.1 hours. Participants never averaged
working more than two hours per week more than the control group.
Those who did benefit from the Job Corps
experienced only slight gains in income. The Job Corps appears to
be incapable of providing the skills and training needed to bring
about substantial increases in the wages of participants. Despite
costing the taxpayer $16,500 per participant over an average of
eight months, the program has failed to move a significant number
of participants into full-time employment.
enhance the impact of every taxpayer dollar spent on job-training
programs, Congress and the Administration should continually review
programs and reduce funding for those that are ineffective.
Especially at a time when the budget is strained and the need for
security heightened, Congress should redirect the funding of any
program that has been unproductive (i.e., has not achieved its
stated or implied goals). Research indicates that this will mean
reducing funding for a number of job-training programs.
date, no evaluations of the effectiveness of WIA programs in
improving the lives of participants have been conducted. Given the
history of federally funded job-training programs, it would be
unwise to increase funding for these programs as the Senate has
recommended until credible evaluations of WIA have been conducted.
Congress should reduce funding for WIA programs beyond the
Given the poor performance of the Job
Corps, the spending recommendations of both the Administration and
the Senate seem unreasonable. The Job Corps is not performing as
the "highly successful" program it is touted to be. Congress should
move to eliminate this wasteful and unproductive program.
Muhlhausen is a Senior Policy Analyst in the Center for Data
Analysis at The Heritage Foundation.