During his Presidential radio address to the nation on April 18,
2009, President Barack Obama declared that:
In the coming weeks, I will be announcing the elimination of
dozens of government programs shown to be wasteful or ineffective.
In this effort, there will be no sacred cows, and no pet projects.
All across America, families are making hard choices, and it's time
their government did the same.
President Obama is correct to call for wasteful and ineffective
programs to be placed on the chopping block. One such program is
Job Corps, a job-training program for disadvantaged youth. The
federal government spends about $1.5 billion per year on Job Corps
and scientific evaluations have demonstrated that the federal
government gets little in return on its investment. Based on this
evidence, President Obama and Congress should move to eliminate
this wasteful and unproductive program.
Evaluations of Job Corps
A recent impact evaluation of Job Corps ("2008 outcome study"),
published in the December 2008 issue of the American Economic
Review, is a follow-up to previous evaluations of the
program. The 2008 outcome study is based on a
randomized experiment-the "gold standard" of scientific research-to
assess the impact of Job Corps on participants compared to similar
individuals who did not participate in the program.
For a federal taxpayer investment of $25,000 per Job Corps
participant, the 2008 outcome study found:
- Compared to non-participants, Job Corp participants were less
likely to earn a high school diploma (7.5 percent versus 5.3
- Compared to non-participants, Job Corp participants were no
more likely to attend or complete college;
- Four years after participating in the evaluation, the average
weekly earnings of Job Corps participants was $22 more than the
average weekly earnings of the control group; and
- Employed Job Corps participants earned $0.22 more in hourly
wages compared to employed control group members.
If Job Corps actually improves the skills of its participants,
then it should have substantially raised their hourly wages.
However, a $0.22 increase in hourly wages suggests that Job Corps
does little to boost the job skills of participants.
Other impact evaluations of Job Corps have found similar
results. In 2001, The National Job Corps Study: The Impacts of
Job Corps on Participants' Employment and Related Outcomes
("2001 outcome study"), measured the impact of Job Corps on
participants' employment and earnings. While the 2001 outcome study
found some increases in the incomes of participants, the gains were
trivial. For example, compared to non-participants, the estimated
average increase in the weekly incomes of all participants over
four years was never more than $25.20.
Another evaluation, The National Job Corps Study: Findings
Using Administrative Earnings Records Data ("2003 study"), was
published in 2003, but the Labor Department withheld it from the
general public until 2006. The 2003 study found that Job Corps
participation did not increase employment and earnings. Searching
for something positive to report, the 2003 study concludes that
"There is some evidence, however, of positive earnings gains for
those ages 20 to 24."
Why Withhold the 2003 Study?
Based on survey data, the 2001 cost-benefit study contained in
the 2001 outcome study assumed that the gains in income for
participants will last indefinitely, a notion unsupported by the
literature on job training. But included in the 2003
study is a cost-benefit analysis that directly contradicts the
positive findings of the 2001 cost-benefit study.
The 2003 study used official government data, instead of
self-reported data, and used the more reasonable assumption that
benefits decay, rather than last indefinitely. Contradicting the
2001 cost-benefit study, the 2003 study's analysis of official
government data found that the benefits of Job Corps do not
outweigh the cost of the program. Even more damaging, the 2003
study re-estimated the 2001 cost-benefit study with the original
survey data using the realistic assumption that benefits decay over
time. According to this analysis, the program's costs again
outweighed its benefits.
Is Job Corps Worth $1.5 Billion Per
Some argue that Job Corps is worth $1.5 billion per year because
there is "some evidence" of positive income gains for those aged 20
to 24. This belief is based on the findings that
these participants had consistently higher annual incomes from 1998
to 2001 than non-participants of similar age. But this
conclusion is questionable. In 1998, participants aged 20 to 24
experienced an average increase in annual income of $476 that, by
traditional scientific standards, is statistically
significant, meaning that the income gains are very likely
attributable to Job Corps. For the remaining years, the income
gains were positive, ranging from $429 to $375, but
statistically insignificant, meaning that the findings
cannot be attributed to participation in Job Corps. Thus, it cannot
be concluded that Job Corps consistently raised the incomes of
participants aged 20 to 24.
By the logic of the 2003 study, a stronger case can be made that
Job Corps consistently reduced the incomes of female participants
without children. In 1998 and 1999, childless female participants
earned $1,243 and $1,401 less, respectively, than similar
non-participants. These findings are statistically
significant, suggesting that Job Corps had a harmful effect. In
2000 and 2001, the earnings of childless female participants were
still beneath those of their counterparts, but the differences are
statistically insignificant, indicating that the declines in income
are not attributable to Job Corps-just like most of the income
gains for participants aged 20 to 24 in the 2003 study.
A Predictable Failure
The findings of the 2008 outcome study are not surprising
because previous research has consistently found Job Corps to be
ineffective at substantially increasing participants' wages and
moving them into full-time employment.
The 2001 outcome study revealed that Job Corps had little impact
on 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. Average participants never worked more
than two hours longer per week than those in the control group.
Job Corps does not provide the skills and training necessary to
substantially raise the wages of participants. Costing $25,000 per
participant over an average participation period of eight months,
the program is a waste of taxpayers' dollars.
An Ideal Candidate for the Budget Chopping
Given the program's poor performance and President Obama's call
for "the elimination of dozens of government programs shown to be
wasteful or ineffective," Job Corps is an ideal candidate for the
budget chopping block.
Muhlhausen, Ph.D., is Senior Policy Analyst in the Center for
Data Analysis at The Heritage Foundation.