Examining the Effect of Industry Trends and Structure on Welfare Caseloads

Previous studies of the macro-economic determinants of welfare caseloads have had difficulty in explaining changes in welfare caseloads during the last decade or so using the simple macroeconomic measure of unemployment. Because welfare recipients will typically get entry- level jobs, employment variables that are closely related to job vacancies, such as employment growth, are also important in determining welfare caseloads, as we show empirically in this study. Recognizing that welfare recipients face more substantial barriers to employment than those who typically have more education and skills, we constructed several macro-economic variables that reflect the education requirements of industries and the predominance of low-skilled workers hired by various two-digit sectors. Estimates based on a data set of annual time series observations aggregated to the state level suggest that these variables help in explaining welfare caseloads. More specifically, areas with higher concentrations of industries that hire welfare recipients and demand workers with higher education levels have higher caseloads. Based on a separate set of metropolitan-based estimates, we also found that gross job flows are positively correlated with welfare caseloads, with job destruction dominating the effects. While the two sets of results come from different types of estimation and for areas with different levels of aggregation, the results suggest that skill levels required of industries and the dynamics of the local labor market, which go beyond the typical measures of unemployment rate, help to explain the anomalies in changes in welfare caseloads during the past decade. The findings underscore that welfare recipients have barriers to employment that are different from the rest of the labor force and thus variables that more closely reflect their circumstances should be considered in explaining welfare caseloads. These findings are relevant to those attempting to predict caseloads at the national, state, or local level, in that it suggests that economic factors other than unemployment could be used to forecast welfare caseloads. In addition, the findings suggest that policies that can enhance net employment growth, reduce job volatility, and increase the educational credentials of welfare recipients may all help to reduce welfare caseloads.welfare, reform, industry, trends, Bartik, Eberts, labor, supply

Estimating a Performance Standards Adjustment Model for Workforce Programs that Provides Timely Feedback and Uses Data from Only One State

The purpose of this paper is to describe a methodology for adjusting performance standards for workforce programs offered by local workforce areas (LWAs). By performance standards adjustment, we mean a model that uses a statistical approach to attempt to better measure the relative performance of different local workforce areas in providing workforce system customers with “value added” in terms of the system’s desired outcomes. Our paper’s approach has four distinguishing features. First, the performance standards are based on the common measures proposed by the U.S. Department of Labor, which include short- and longer-term employment outcomes. Second, the model is estimated using data from only one state, which allows each state greater flexibility in adapting the adjustment model to the state’s needs and available data. Third, the model is estimated using data on individual customers, which offers some estimation advantages, particularly when data from only one state is available. Fourth, since some of the common measures are not available until long after the program year is completed, we include real-time predictions of the current performance of the LWA and an assessment of whether or not it will meet its performance standards when the common measure data is eventually available. This more timely feedback on performance provides administrators the opportunity to better manage their operations and offer services that best meet the needs of their customers.performance standards, workforce programs, local labor markets, vapis, model, michigan

Methodology for Adjusting GPRA Workforce Development Program Performance Targets for the Effects of Business Cycles

The U.S. Department of Labor’s Employment and Training Administration issued Training and Employment Guidance Letter (TEGL) 09-08 Change 1 on June 5, 2009. This guidance letter revises the Government Performance and Results Act (GPRA) performance measures for federal workforce development programs to take into account the effect of the recession on participants’ labor market and educational outcomes. As described in the TEGL, the performance targets of the various workforce development programs have been developed for use for the years PY2008 through PY2010. They are intended to be used for PY2009 performance target negotiations and will appear in the President’s Budget Request for FY2010. The performance targets for future program years, adjusted for unemployment rates, are driven by the economic assumptions of the President’s Budget Request for FY2010. The revised performance targets are based on analysis carried out as part of a study conducted for the U.S. Department of Labor by the W. E. Upjohn Institute for Employment Research. This working paper has two purposes. The first is to describe the methodology used to estimate the relationship between unemployment rates and workforce program performance targets. The second is to describe the procedures used to adjust the GPRA performance targets for changes in unemployment rates during the current recession and over the business cycle. The study described in this working paper is the initial phase of an ongoing analysis of the effect of economic conditions on workforce development program outcomes.performance standards, workforce programs, GPRA

Black Suburbanization: Causes and Consequences of a Transformation of American Cities

Since 1970, the share of Black individuals living in suburbs of larger cities has risen from 16 to 36 percent. We study the causes and consequences of this shift, which involved as many people as the post-World War II wave of the Great Migration. We show that Black suburbanization is widespread across regions and suburban neighborhood types, while Black and total population have declined drastically in historically majority-Black city neighborhoods. A neighborhood choice model suggests that changes in relative housing prices and amenities each explain 30 to 50 percent of the shift to the suburbs, while rising education levels and regional reallocation together explain 10 percent. Next, we find that suburbanization accounts for over half of both the recent increase in within-Black income segregation and the improvement in the average Black household’s neighborhood quality. Suburbanization’s association with stratification is partially explained by low White flight and differentials in the supply of low-cost housing

Estimating a Performance Standards Adjustment Model for Workforce Programs that Provides Timely Feedback and Uses Data from Only One State

The purpose of this paper is to describe a methodology for adjusting performance standards for workforce programs offered by local workforce areas (LWAs). By performance standards adjustment, we mean a model that uses a statistical approach to attempt to better measure the relative performance of different local workforce areas in providing workforce system customers with value added in terms of the system\u27s desired outcomes. Our paper\u27s approach has four distinguishing features. First, the performance standards are based on the common measures proposed by the U.S. Department of Labor, which include short- and longer-term employment outcomes. Second, the model is estimated using data from only one state, which allows each state greater flexibility in adapting the adjustment model to the state\u27s needs and available data. Third, the model is estimated using data on individual customers, which offers some estimation advantages, particularly when data from only one state is available. Fourth, since some of the common measures are not available until long after the program year is completed, we include real-time predictions of the current performance of the LWA and an assessment of whether or not it will meet its performance standards when the common measure data is eventually available. This more timely feedback on performance provides administrators the opportunity to better manage their operations and offer services that best meet the needs of their customers

Methodology for Adjusting GPRA Workforce Development Program Performance Targets for the Effects of Business Cycles

The U.S. Department of Labor\u27s Employment and Training Administration issued Training and Employment Guidance Letter (TEGL) 09-08 Change 1 on June 5, 2009. This guidance letter revises the Government Performance and Results Act (GPRA) performance measures for federal workforce development programs to take into account the effect of the recession on participants\u27 labor market and educational outcomes. As described in the TEGL, the performance targets of the various workforce development programs have been developed for use for the years PY2008 through PY2010. They are intended to be used for PY2009 performance target negotiations and will appear in the President\u27s Budget Request for FY2010. The performance targets for future program years, adjusted for unemployment rates, are driven by the economic assumptions of the President\u27s Budget Request for FY2010. The revised performance targets are based on analysis carried out as part of a study conducted for the U.S. Department of Labor by the W. E. Upjohn Institute for Employment Research. This working paper has two purposes. The first is to describe the methodology used to estimate the relationship between unemployment rates and workforce program performance targets. The second is to describe the procedures used to adjust the GPRA performance targets for changes in unemployment rates during the current recession and over the business cycle. The study described in this working paper is the initial phase of an ongoing analysis of the effect of economic conditions on workforce development program outcomes

The impact of COVID-19 on small business outcomes and expectations

To explore the impact of coronavirus disease 2019 (COVID-19) on small businesses, we conducted a survey of more than 5,800 small businesses between March 28 and April 4, 2020. Several themes emerged. First, mass layoffs and closures had already occurred—just a few weeks into the crisis. Second, the risk of closure was negatively associated with the expected length of the crisis. Moreover, businesses had widely varying beliefs about the likely duration of COVID-related disruptions. Third, many small businesses are financially fragile: The median business with more than $10,000 in monthly expenses had only about 2 wk of cash on hand at the time of the survey. Fourth, the majority of businesses planned to seek funding through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. However, many anticipated problems with accessing the program, such as bureaucratic hassles and difficulties establishing eligibility. Using experimental variation, we also assess take-up rates and business resilience effects for loans relative to grants-based programs. © 2020 National Academy of Sciences. All rights reserved