Economic Costs of Inadequate Investments in Workforce Development

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Abstract

In testimony on the ramifications of inadequate investments in workforce development, Senior Fellow Harry Holzer told a House Appropriations subcommittee that the very low earnings and employment of millions of Americans generate high poverty rates and impose huge costs on the U.S. economy. The research evidence, while somewhat mixed, shows that many public investments in workforce development are cost-effective at raising the earnings of low-income workers.

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Testimony

Subcommittee on Labor, Health and Human Services, Education and Related Agencies Committee on Appropriations
U.S. House of Representative:

I am very pleased to testify today on the economic and social costs to the United States associated with investing too little public funds in workforce development efforts.

I’d like to emphasize the following four points today:

• The very low earnings and employment of millions of Americans generate high poverty rates and impose huge costs on the U.S. economy;
• Federal investments in workforce training to raise the earnings of these low-income Americans have declined dramatically;
• The research evidence, while somewhat mixed, does show that many public investments in workforce development are cost-effective at raising the earnings of low-income workers, and many more are very promising; and
• The federal government should make major new investments in workforce development, while encouraging greater efforts by state and local governments and the private sector, and evaluating new approaches to improve our knowledge of what works.

(End of excerpt. The entire testimony is available in PDF format.)

The views expressed are those of the author and should not be attributed to the Urban Institute, its trustees, or its funders.

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

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