The first public employment programs in the United States were created in response to the Great Depression. Although successful, these efforts, notably the Civilian Conservation Corps and the Work Projects Administration, were largely terminated when the country entered World War II and the Depression ended. The federal government did not become involved in training programs until 1961, with the enactment of the Area Redevelopment Act, followed quickly by the Manpower Development and Training Act in 1962. Subsequent legislation included the Economic Opportunity Act in 1964, the Comprehensive Employment and Training Act in 1973, the Job Training Partnership Act in 1982, and the Workforce Investment Act and the Carl D. Perkins Vocational and Technical Education Act in 1998. Over time, the groups targeted by federal programs have changed, from a focus on dislocated workers to economically disadvantaged adults, youth, and welfare recipients.

Today, the United States finds itself in a global, highly interdependent economy in which labor market events in one nation have immediate and often pronounced implications for workers in another. The U.S. economy currently supports a labor market that by nearly all accounts is more robust than it has been in nearly three decades, with unemployment rates averaging at or below 4.5 percent, strong employment growth, and very modest rates of inflation, both in terms of consumer and producer prices. This remarkable set of circumstances is bolstering consumer confidence, leading to earlier-than-expected reductions in the federal deficit and allowing the traditionally conservative leadership of the Federal Reserve Board to maintain low interest rates.

As this volume was being prepared, the nation was giving considerable thought to how our employment and job training system should be structured, which groups of workers should be targeted, and what types of activities should be offered. Some of the biggest changes so far have been in programs for welfare recipients.

A dramatic round of welfare reforms swept the nation in 1996 and late 1997. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 has largely "ended welfare as we know it." It drastically changed the way welfare is financed, imposed lifetime limits on receipt of benefits, and added work requirements far greater than those in any other program in the nation. The act replaced the Aid to Families with Dependent Children (AFDC) program with Temporary Assistance for Needy Families (TANF) and dropped the Job Opportunities and Basic Skills (JOBS) training program for welfare recipients. The Balanced Budget Act, signed in December 1997, created the Welfare-to-Work Block Grants program, which further changed programs for welfare recipients. The program provides subsidized employment and job-related activities for hard-to-serve welfare recipients. In addition, it stresses post employment services for recipients and can serve noncustodial parents whose children receive TANF benefits. For people who are or even may be on welfare, it is truly a new world.

For the past several years, bills have been introduced in both houses of Congress to replace the Job Training Partnership Act (JTPA) and consolidate many of the smaller training programs. In the latter half of 1998, Congress passed and President Bill Clinton signed into law both the Workforce Investment Act (WIA) and the Carl D. Perkins Vocational and Technical Education Act, commonly referred to as Perkins III, mandating major changes in the nation's job training and vocational and technical education. Included in WIA are reauthorizations of the Adult Education and Family Literacy Act (Title II) and the Rehabilitation Act (Title IV) as well. Finally, after years of reduced funding, there is renewed interest in providing training to disadvantaged youth.

With so many changes under way, the time is ripe for assessing what we know about targeted employment and training programs. Our goal in this volume is to determine how effective current training programs have been and to provide recommendations on how the nation's employment and training system could be improved. We are not just interested in the extent to which the current mix of programs has increased earnings and employment and reduced the receipt of welfare, however. We also want to know what particular approaches to training seem to be most effective. Thus, most of the chapters focus on programs for particular groups or on particularly promising approaches to training.

Training Programs and Their Effects

Frank Bennici, Stephen Mangum, and Andrew Sum provide a context in chapter 2 for our discussion of publicly funded training in the United States. They analyze labor market projections, assess some of the realities of training as it is now conducted in both the public and private sectors, and pose future challenges and possible strategies.

The authors identify familiar trends in the labor market—a changing industrial employment structure, technical advancement and organizational restructuring, and reduced employment security¹—and suggest that these trends have contributed to human resource problems "of critical importance to the ongoing debate over the appropriate direction and structure of future training policies" in the United States today.

Welfare Recipients

In chapter 3, Lisa Plimpton and Demetra Smith Nightingale review experimental and rigorous quasi-experimental evaluations of 14 welfare-to-work programs that have operated around the country from the mid-1970s to the present. They begin with the intensive National Supported Work demonstration of the late 1970s, continue with the Work Incentive program that operated through 1988, and conclude with the labor force attachment and human capital development sites of the ongoing national evaluation of welfare-to-work programs. The authors summarize the evaluations of these efforts, focusing on the programs' impacts on employment, earnings, and welfare receipt, and highlight key design issues.

Jodi Nudelman, in chapter 4, analyzes a sample drawn from the National JTPA Study, consisting of 1,862 adult women who were receiving AFDC at the time they applied to JTPA, between November 1987 and September 1989. She found that a substantial portion of the experimental group did not enroll in JTPA. She examines four issues of interest to policymakers, especially in light of national and state welfare reforms and the recent implementation of the Welfare-to-Work program: (1) JTPA's net impacts on earnings and on welfare receipt; (2) its impacts on various subgroups of welfare recipients; (3) the impacts of various JTPA services; and (4) the relationship between impact on earnings and impact on receipt of welfare.

Disadvantaged Adults and Youth

Chapters 5 and 6 address training and related interventions for disadvantaged adults and out-of-school youth. The first, by Christopher T. King, with colleagues Jerome A. Olson, Leslie O. Lawson, Charles E. Trott, and John Baj, focuses on the effects of training programs for the economically disadvantaged. The authors analyze data on out-of-school youth and adult JTPA participants in Texas and Illinois to identify the demographic characteristics and the program and environmental variables associated with key measures of long-term success. Their field studies of seven of the most successful programs in the two states show the program characteristics and practices that are associated with success. From these the authors develop a series of policy recommendations and practical guidance for local programs.

Drawing on both his own and others' research, Robert Lerman, in chapter 6, describes what we know about out-of-school youth and the serious labor market problems they face. Out-of-school youth—whose numbers may be rising in the immediate future—tend to belong disproportionately to minority groups, are more prone to involvement with the criminal justice system, are more likely to become early parents, are seriously short of job skills, live in areas largely lacking good jobs, and lack either appropriate attitudes, reliability, and basic work preparation or the networks they need to find and retain good jobs. Lerman reviews the effectiveness of the broad types of publicly funded interventions that have served these youth over the past three decades: education, training, and job search and direct job creation.

Customized Training

Customized training is typically characterized by the following features: the curriculum is employer-specific and designed with company input; JTPA pays for some or all of the training cost; trainees are JTPA participants; and JTPA recruits and screens applicants but allows employers to select trainees. Kellie Isbell, John Trutko, and Burt Barnow, in chapter 7, provide findings and recommendations from case studies of nine companies whose customized training was financed in part with JTPA dollars. The projects studied were chosen to represent diversity of industry and occupation, employer size and geographic location, and types of training provided; participation in the study was entirely voluntary for employers.

Dislocated Workers

In chapter 8, Duane E. Leigh reviews what we know about dislocated workers, the various programs and approaches that have been developed since the early 1960s to assist them, and what effects these effects have had. According to Leigh, dislocated workers, probably the least disadvantaged subpopulation served by publicly funded training programs, tend to be distinguished by three interrelated characteristics: they have been laid off from jobs they have held for some time; they have significant work experience and firm-specific skills; and they are unlikely to be recalled to their old jobs or other jobs in the same industry. Leigh finds that dislocation has been and continues to be a large problem, with an average of 2 million full-time workers permanently displaced from their jobs annually between 1984 and 1992. The groups displaced have changed somewhat over time, however, with older, college-educated, white-collar workers from non-goods-producing industries now being disproportionately affected.

Review of Training Evaluation Methodologies

Daniel Friedlander, David Greenberg, and Philip Robins review in chapter 9 the methodologies used to conduct impact evaluations of training programs and offer suggestions for future evaluations based on the lessons learned. The basic problem in conducting impact evaluations is that we cannot observe the participants with and without training at the same time. Evaluators get around that problem by assigning eligible individuals at random to treatment or control groups and ensuring that the groups are similar except for receipt of the treatment. In such an experiment, a training program's impact on earnings can be estimated without bias simply by measuring the difference between the treatment and control groups' mean earnings in the period after the program.

In nonexperimental situations, individuals enter a program on their own or are selected by program officials, or both, and failure to control statistically for the selection process can lead to bias in the impact evaluation. The authors describe a number of ways to deal with nonrandom selection and suggest that more effort be given to implementing differential impact studies, in which the efficacy of various treatment strategies can be compared and the impact of treatment on different subgroups can be compared.

The Long-Term View

In chapter 10, Garth Mangum—one of the founders of what in the 1960s was called simply manpower policy—reflects on almost four decades of federal and state policymaking. He points out that "on average, the only people who maintained the level of their real earnings from the early 1970s to the late 1990s were those with college education, and only those with graduate degrees, again on average, experienced real increases in their standard of living." Mangum then assesses the budgetary consequences of stagnant or falling expenditures on programs serving the disadvantaged and reviews recent programs for disadvantaged adults and youth, as well as dislocated workers. These programs reinforce his observations about patterns in workforce policy since the early 1960s and the "essentiality of occupational preparation."

The concluding chapter, by the book's editors, distills from the research presented earlier a series of strategies that should greatly improve the odds of success—as measured by increased employability and earnings and reduced dependence on public assistance—with publicly funded training. We then offer an agenda for future research in this policy area.

In contrast to the dramatic reforms in welfare policy enacted recently, national workforce policy is continuing on a categorical, program-by-program, target group-by-target group basis, paying little attention to the larger picture. Even when we consider recent programs such as Perkins III, 1994's School-to-Work Opportunity Act, and other federal legislative vehicles for workforce development, the existing framework has been largely ad hoc and fragmented, driven by the perceived needs of specific groups (National Commission for Employment Policy 1991; U.S. General Accounting Office 1993, 1994).

National Workforce Reforms in the 1990s

Serious efforts to reform workforce development programs at the national level were initiated in 1995 with the passage of the Kennedy-Kassebaum bill (S. 143, the Workforce Development Act) and the McKeon-Goodling bill (H.R. 1617, Consolidated and Reformed Education, Employment and Rehabilitation Systems—or CAREERS). The bills approached reform in quite different ways,² but they were left as works in progress when the appointed conference committee was unable to reach consensus.

Workforce reform efforts in the 105th Congress enjoyed greater success, namely, the Workforce Investment Act of 1998, but some of the changes effected may be more apparent than real. Despite the rhetoric of this act, funding streams for the various federal and federal-state programs are kept largely separate, and many restrictions on eligibility and allowable services remain—but in the form of quasi block grants.³ WIA also retains separate national programs, such as those for migrants and seasonal farmworkers and for veterans, and continues the four rural Concentrated Employment Programs.

Yet the act shows promise in several respects. First, it provides states greater leeway in preparing long-term, "unified" plans for their various workforce programs. Second, it builds upon the customer-friendly, one-stop service center approach that has evolved in recent years. Third, it deals more systematically with the wider workforce system, including adult and vocational education, employment and rehabilitation services, and job training programs. And fourth, it is more explicit about accountability, requiring common performance indicators and the disclosure of service provider performance information, among other provisions. Whatever else it may accomplish, however, the act will probably fall short of unifying the nation's workforce programs.⁴

So, what are the major elements of federal workforce reforms in the 1990s?

INCREASED COORDINATION

Both WIA and Perkins III strongly encourage or require increased coordination among the various program actors, especially at the state and local levels.⁵ Examples include provisions for unified state-level planning across job training, labor exchange, adult/vocational education, and other workforce-related programs; one-stop career centers as key entry points for many, if not most, local workforce services; and common performance indicators across programs. For the most part, recent legislation has stopped short of calling for program consolidation or integration;⁶ however, WIA restores once-standard provisions for inducing or rewarding collaborative efforts, including rehabilitation services.

GREATER RELIANCE ON MARKET MECHANISMS

WIA requires that a voucherlike instrument, the individual training account (ITA), be used to deliver services.⁷ In practice, ITAs resemble the individual-referral model (described in chapter 5), in which individuals are assessed and counseled on available service options and their implications before being referred to a qualified provider or providers. Whatever the details of the service selection process, much greater weight is now given to mechanisms that seek to mimic the market. For example, WIA is quite clear about providing accurate, up-to-date performance information on providers to support informed consumer choice, an essential element in fostering reliance on market mechanisms.

UNIVERSAL SERVICE

Universal service, an important element in many recent proposals, is an interesting concept in theory, but it has not been particularly helpful in practice, because it suggests relatively unrestricted eligibility for workforce services. Given the very limited funding for these programs—federal expenditures on all forms of workforce development have never exceeded 0.85 percent of the gross domestic product or 2.4 percent of federal budget outlays (King, McPherson, and Long 1999: 3)—universal service remains largely rehetorical, though stressing it may help to remove some of the stigma associated with such programs over the years, both by potential participants and employers. Under WIA, core services, such as outreach, intake, initial assessment, job search, and provider performance information, are open to all applicants regardless of employment status, income, or other characteristics, while welfare recipients and the poor are given priority for training services.

INCREASED ACCOUNTABILITY AND CUSTOMER ORIENTATION

Workforce reforms in the last decade bear little resemblance to those of earlier periods in terms of accountability. Before 1990, only a few programs (for example, JTPA) had explicit performance management systems. Those that did often defined performance in terms of process rather than outcomes. Since then, there has been greater recognition that accountability, performance measurement, and management must be addressed systematically, across program services, rather than simply on a program-by-program basis.⁸ Passage of the Government Performance and Results Act of 1993 constitutes a major step in this direction, although many agencies define performance in terms of process or change, with little effort to link the measures to program outcomes. In addition, it is no longer unusual to see proposals and provisions referring to both participants (employees or potential employees) and employers as "customers" of workforce services and viewing service providers (such as state and local agencies, community colleges, and community-based organizations) as entities addressing their needs. WIA clearly reinforces this trend, calling for the establishment of a Performance Accountability System for workforce services to maximize return on investment and promote continuous improvement. Interesting features of this new system include requiring indicators of performance (which differ for adults and youth),⁹ emphasizing longer-term (6- and 12-month) measures, disseminating performance information widely, and applying measures at both the local and state levels. For the most part, this approach is also reflected in Perkins III and the associated Adult Education and Family Literacy and Rehabilitation Act reauthorizations.¹⁰

Congress and various administrations have accompanied calls for workforce reform with considerable rhetoric about increased state or local control and greatly diminished federal responsibility. However, given that the federal government is still putting up most of the funding for these services, the federal stakeholders (Congress and the responsible cabinet agencies) still expect substantial control over who gets served, how they get served, and the outcomes resulting from such services.

State Reforms in the 1990s

Not content to wait for action at the federal level, many governors and state legislatures proceeded with their own reforms in the 1990s.¹¹ Such developments can be expected in a dynamic federal system. The states have often served as the nation's laboratories of democracy, piloting numerous reforms that eventually became national law, including many safety and health statutes in the early years of this century, anti-injunction and other laws governing labor-management relations (notably in Wisconsin), and, more recently, welfare-to-work approaches.¹²

State reforms vary considerably in their breadth and scope; the extent to which they appeal to employers or employees; the degree to which they reflect bottom-up, customer orientation or top-down, state direction; and other dimensions. These efforts appear to be driven in part by a desire to rationalize their approach to delivering workforce services—that is, designing and implementing approaches to service delivery that are more appropriate to the skills, aptitudes, and interests of the labor force and to the needs of employers, regardless of the strictures of federal and state funding sources. Some of the more noteworthy reforms from state laboratories, especially reforms that pursued more systemic change, are described here briefly.¹³

FLORIDA

Florida moved decisively toward reforming its workforce programs in 1992 with the creation of the Enterprise Florida initiative, which had a strong economic development emphasis and drew heavily from the high-skills, high-wages focus of the America's Choice report (Commission on the Skills of the American Workforce 1990). Florida worked to establish a single, coordinated, market-driven economic development strategy that would streamline its programs, eliminate customer confusion, increase efficiency, and provide a clear outcomes orientation. The redesign of its local system was well along in 1997, with 25 Jobs and Education Partnership boards formed to oversee, but not directly provide, workforce services with what they referred to as "simulated block grants" in a series of workforce funding "strands." Distinctive features of the system include the annual state Occupational Forecast Conference, which identifies emerging and high-growth, high-wage occupations that require less than baccalaureate-level preparation and for which local programs can train workers; and the Florida Education and Training Performance Improvement Program, which provides the labor market outcomes to support the award of incentive grants from the state's Performance-Based Incentive Fund.

MASSACHUSETTS

Massachusetts has been a leader in welfare and workforce reform since the late 1980s. In 1993, it adopted a comprehensive strategy for workforce development and economic growth aimed at building a highly skilled and educated workforce based conceptually on the reinventing government work of David Osborne. The Massachusetts Jobs Commission was created at the state level, along with strong Regional Employment Boards. This system was designed to be demand-driven, customer-oriented, performance-driven, locally administered, and centrally guided. It gave priority to school-to-work, one-stop, and welfare-to-work programs, all of which continued to be categorical federal-state workforce programs. In 1998, Massachusetts established an Executive Office of Labor and Workforce Development with responsibility for most workforce programs, as well as a new Corporation for Business, Work, and Learning, which replaced the Bay State Skills Corporation, JTPA, and several other program initiatives. Regional Employment Boards also may choose between competitive or collaborative approaches to service delivery.

MICHIGAN

In the late 1980s, Michigan began a series of cutting-edge reforms under former governor James Blanchard—reforms that eschewed the more traditional rewiring-the-state-organization-chart approach in favor of a technologically based, client-driven one featuring the Michigan Opportunity Card. Soon after, in the early 1990s under Republican governor John Engler, the state dove headlong into a sweeping set of top-down reforms. Engler established the Michigan Jobs Commission in 1993 and placed most programs—except for adult and vocational education—under its administrative purview, advised by the Governor's Workforce Commission. More than most other states, Michigan's approach is to serve the needs of its employers first; economic rather than workforce development is in the lead role, while firm-based training is the service of choice. Michigan's workforce system is three-tiered. Tier one services, including JTPA, stops, WorkFirst (under its TANF program), School-to-Work, and some state-funded training, are controlled directly by the local boards. Local boards have less influence over tier two services (including the employment service, adult and vocational education, and several others) in their area and plan jointly for their use. While local boards are expected to affect the provision of tier three services (such as public transit and K-12 public education), their influence is quite limited in practice. Workforce services (especially tier one services) are currently offered under the auspices of 26 local Workforce Development Boards, with service providers competing for subcontracts from the boards.

OREGON

In 1989, Oregon adopted a 20-year strategic plan, Oregon Shines, that set forth a strong human investment framework as the basis for much of its workforce and economic decisionmaking. Oregon was strongly influenced by the high-skills, high-wage vision articulated in the 1990 America's Choice report (Commission on the Skills of the American Workforce 1990) and has continued to pursue this vision under three governors, with widespread bipartisan support. Unlike most other states, Oregon has pursued an economic development strategy based exclusively upon workforce development. It focuses on the supply side of the market in what has been termed a field-of-dreams approach—educate and train them (workers), and they (businesses) will come. Oregon trains with a goal of living wages for all of its workers. A Workforce Policy Cabinet at the state level directs decisionmaking for most workforce development and related programs, while 15 regional Workforce Quality Commissions serve at the regional level. Oregon relies heavily on coordinated decisionmaking at all levels, with some block grant funding, but is ultimately seeking more fully integrated workforce services. A distinctive feature of its approach to workforce as well as other services is the Oregon Benchmarks initiative, instituted in 1991, which established performance goals across a broad array of programs and services. Oregon has since been developing a Shared Information System to support a more realistic (smaller) number of benchmarks.

TEXAS

Texas began confronting the fragmented array of workforce services in the late 1980s and early 1990s with a series of studies, some generated by state agencies and others by the state legislature. In 1993, the legislature created the Texas Council on Workforce and Economic Competitiveness (TCWEC), one of the earliest human resource investment councils, as an independent state agency charged with planning and overseeing most workforce services, as well as developing a plan for consolidating and integrating such services. However, the 1995 legislature passed a bill that created the Texas Workforce Commission (TWC), a superagency for workforce services. The new legislation strongly encouraged establishment of local workforce development boards and demoted TCWEC to advisory status within the governor's office. Some two dozen programs—including JTPA, ES, unemployment insurance, Food Stamp Employment and Training, JOBS, and child care services—were transferred to TWC, and 28 local workforce areas were designated. By the beginning of 1999, 26 of the 28 local boards were under contract to TWC, charged with serving its two primary customers: employers and residents. The Texas workforce system has several interesting dimensions. One is the explicit split—much like that called for in WIA—among the boards, the career centers, and other service providers. Boards are responsible for planning and oversight but cannot provide services directly; career centers, which are competitively bid, handle intake, assessment, and other front-end services before referring participants to service providers for more intensive workforce services. The workforce system in Texas is demand-driven, supported by one of the best labor market information efforts in the nation (see chapter 5), and among the first to have systemwide performance measures.

WISCONSIN

Wisconsin began addressing workforce and welfare reform issues early, having established its one-stop Jobs Centers in 1987; these centers now serve both workers and employers. Although threatened by the recent emphasis on WorkFirst, Wisconsin's workforce system is still considered one of the best in the nation.¹⁴ This systemic approach to workforce development arose from a 1985 study documenting the chaos that existed in the state's various education, training, and related programs. Today's Department of Workforce Development presides over a strongly customer-oriented, demand-driven system with more than 60 local Jobs Centers that offer access to services under the state's W2, JOBS, vocational rehabilitation, JTPA, employment service, and adult and vocational education programs. The State Collaborative Planning Team helps to guide the workforce system at the state level, while its local counterparts do the job at the regional level. With the exception of its state-sponsored Regional Training Partnership programs, Wisconsin's approach to workforce development stresses local control. The state established a human resource investment council (the Council on Workforce Excellence) to address strategic planning and oversight across various workforce programs almost as soon as such councils were encouraged under the 1992 JTPA reform amendments, but only in the past few years has Wisconsin begun to address performance management and measurement in a more comprehensive, systematic way.

As this quick review illustrates, governors and legislatures have not shied away from developing and implementing substantive workforce reforms at the state and local levels, despite sometimes less-than-adequate federal support. Moreover, they have tackled workforce reform in often quite varying ways, even though some of the elements are similar. The United States still operates very much within a federal system for workforce development.

Labor markets have experienced dramatic change in recent decades. Publicly funded training programs, which respond to these market shifts, have been operating for the better part of four decades and have undergone numerous changes in mission, goals and objectives, target populations, service mix, administrative structure, funding, and many other facets of their operations. In the past few years, policymakers at the national and state levels have instituted sweeping reforms in these programs.

This book reviews what we know about many of the leading publicly funded training programs, offering a thorough look at who has been served, the types of services provided, and the impacts of participation in them. It also provides coherent recommendations for enhancing training policies and for improving the odds of success with publicly funded training-especially at the local level, where it matters most.

______. 1994. Multiple Employment Training Programs: Overlapping Programs Can Add Unnecessary Administrative Costs. GAO/HEHS-94-80. Washington, D.C.: GAO.

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