The Interaction of Workforce Development Programs and Unemployment Compensation by Individuals with Diabilities in Washington State

The report addresses a gap in the research literature by considering the following question: With so many people with disabilities unemployed, to what extend do individuals with disabilities receive Unemployment Insurance benefits? As a means of building a more complete understanding of the rate at which people with disabilities access the UI benefits system, the report examines the extent to which people with disabilities in Washington State use the public workforce system and the rate at which those who use it become employed after receiving services

Sectoral Initiatives and Opportunity Youth

An estimated 6.7 million individuals in the United States are between the ages of 16 and 24 and are not employed, not in school, and have not earned a postsecondary credential. An acronym that is applied to these individuals is NEET (not employed or in education and training). A more hopeful appellation is opportunity youth (OY). This article is based on a recent policy paper that reviews policies targeted at OY and examines the extent to which sectoral initiatives, which operate on the demand side of the labor market, can help to facilitate pathways into productive careers

The Economic Payoffs to Workplace Literacy

This paper focuses on one of the potential benefits to improving the Nation's literacy the economic payoffs. A more literate workforce provides economic benefits to the members of the workforce themselves, to employers, and to society. Workers who improve their basic skills through participation in workplace literacy programs should be more productive and hence earn higher wages and have greater job security. Employers with more productive workers will be more competitive in their industries and will be more profitable. Society gains by having a more productive and stable economy, by having more individuals employed with higher earnings and thus paying more in taxes, and by having fewer individuals unemployed who would otherwise be drawing transfer income from the government. The key nexus in the argument that workplace literacy engenders significant economic benefits is that a more literate worker will be more productive on the job. Were that not the case, the economic benefits to workplace literacy programs would all but evaporate. Whereas literacy advocates would easily accept the notion that more literate workers are more productive, the evidence is far from clear. In fact, the status quo provides a strong counterargument. The business sector is characterized by a very low incidence of workplace literacy programs despite the fact that there is a substantial need, as measured by the percentage of the workforce who are deficient to some extent in basic skills (see Hollenbeck 1993). It can be legitimately asked why, if workplace literacy programs are so beneficial economically, is there such a paucity of programs? Why haven't more employers increased their profits by adopting such programs? This paper presents findings that suggest that there are substantial productivity payoffs to workplace literacy programs. The answer to the question as to why there is such a low incidence of programs is that there must be market failures such as inaccessible capital, lack of information, or uncertainty about costs or payoffs that are dampening more widescale adoption of programs. In the next section of the paper, I review prior literature on the economic payoffs to workplace literacy programs and suggest a model for determining their payoffs. The third section describes the data that I use to analyze the issue, which come from two national surveys of individuals. The fourth, fifth, and sixth sections of the paper present my empirical findings. In the fourth section, I analyze participation in workplace literacy programs the characteristics of the individuals who participate. The fifth section presents tabular analyses of program characteristics as reported by the participants and in the sixth section, I analyze the economic benefits to workers from participation. The final section presents conclusions.workplace, literacy, programs, productivity, Hollenbeck

A Framework for Assessing the Economic Benefits and Costs of Workplace Literacy Training

Many individuals are grappling with the issue of whether to provide workers with training that upgrades the workers' basic academic skills. The corollary questions that flow from this issue are how to provide the training, how much training should be provided, and who should pay for the training. Workers are interested in this issue because they want to sustain productive, well-paying careers that will support adequate standards of living. Not receiving training may jeopardize their careers and earning power. Employers are interested in this issue because their economic role is to maximize corporate profits for stockholders. In most companies, worker productivity is the most important factor in determining output levels and profitability. Public policy makers are interested in the issue because if productive workers lose their jobs, the public may end up supporting them through income maintenance payments and financing job searches through the employment service. On the other hand, if basic skills-deficient workers get training and keep their jobs, they will continue to pay taxes that support government activities. Educators are interested in the issue because they want to improve the educational system to reduce future basic skill deficiencies and because they may be involved in the upgrading of current workers. The question that is at the core of this issue is easy to state. What should an employer do about a factor of production, be it physical capital such as a plant or machine or be it human capital, that has become unprofitable? For human capital, that is, skills and knowledge, the lack of profitability may stem from the fact that the worker's basic skills were never adequate or it may be the case that technology or workplace demands have surpassed the worker's skill levels. For both physical and human capital, the choices that employers face are limited. They can invest in upgrading the factor of production; they can continue to employ the factor and bear the losses; (Note: I am using the economic cost concept of opportunity costs. A basic skills deficient worker may be paid $8.00 an hour and be productive enough to produce$8.50 worth of product per hour. However, a trained employee or a younger employee may be willing to work for $8.00 an hour and be able to produce$10.00 worth of product. The opportunity cost of not training the worker would be $1.50 per hour even though the firm would not be losing money on the worker.) or they can replace the factor. From an economic and business management theoretical point of view, the answer is easy. Employers should choose the option that maximizes their rate of return. That is, they should choose the option where the difference between the (discounted) future benefits and the costs is the greatest. From a practical point of view, estimating the benefits and costs may be extremely difficult. Furthermore, it is undoubtedly the case that the best option will differ for different situations. There may be cases in which employers would reap large returns from modest investments in workplace literacy training. On the other hand, there may be cases in which employers would be better off by accepting the turnover and hiring costs of replacing workers. In short, it is impossible a priori to prove that it is to a firm's advantage to provide workplace literacy training. It, too, is impossible to prove a priori that it is to a firm's advantage to shed workers with basic skills deficiencies. From a public policy point of view, it should be recognized that society may benefit or bear costs from employers' decisions about inefficient or outmoded factors of production. Thus it may be the case that from a firm's profit-maximizing perspective, it is not advantageous to provide workplace literacy training. But from the rest of society's perspective, provision of the training, is beneficial. In such cases, public policy should facilitate financial subsidies to firms. The purpose of this paper is to present these arguments theoretically to identify the key factors that influence the employer's and society's choices; to discuss some empirical evidence from earlier studies about the payoff to individuals and firms; and to provide policy recommendations.unemployment, labor, market, programs, self-employment, Hungary, Poland, O'Leary

Is There a Role for Public Support of Incumbent Worker On-the-Job Training?

States have begun to use training subsidies as a policy tool for employment retention and business competitiveness. This paper summarizes a survey of states concerning their investments in incumbent worker training. Altogether, states are investing about $550 to$800 million, which is perhaps one percent or less of total private sector training costs. The paper further discusses a study conducted for one state in which we found significant fiscal returns implying that underinvestment of public funds for incumbent worker training may be occurring. In this state, primary sector jobs were created or retained at a public cost of less than $9,000 per job; a cost that rivals or bests most economic development initiatives.incumbant, worker, on-the-job training, ojt, hollenbeck

Some Reflections on the Use of Administrative Data to Estimate the Net Impacts of Workforce Programs in Washington State

The purpose of this paper is to reflect on the results, methodology, and processes used in a series of net labor market impact studies done for the State of Washington over the past six years. All of the studies relied on administrative data and used a technique referred to as quasi- experimental evaluation. The program interventions were the federal- and state-funded workforce development programs. The paper sets out eight "reflections" for analysts and policy makers to consider. These reflections identify lessons learned and uncertainties or issues that need more consideration and scrutiny.evaluation, Washington, workforce, development, data, investment, act, Hollenbeck, Upjohn

Postsecondary Education as Triage: Returns to Academic and Technical Programs

This paper examines the labor market outcomes of individuals with various types of postsecondary educational experiences. In particular, it examines differences between students who have pursued technical education programs from those who have pursued academic programs and from those individuals who have not pursued any type of postsecondary education. Empirical evidence is presented concerning the relationship between economic outcomes and grades earned and the degree to which the labor market rewards credentials. Wage and earnings models yield different structural parameter estimates when based on the three different populations. The differences are most dramatic for high school background effects and for postsecondary characteristics. The empirical results from the technique used to correct for self-selection suggest that individuals' choices into the three postsecondary tracks are not the result of absolute advantage.postsecondary, education, labor, market, outcomes, Hollenbeck

A Review of Retirement Income Policy Models

Public policymakers and program administrators often face decisions that impact the retirement incomes of individuals. An important question that these decision-makers may wish to address concerns the distributional impacts of the programmatic changes under consideration. Who (what population groups) would gain income and how much? Who would be unaffected? Who would lose and by how much? The question that this paper investigates is the extent to which computer models and associated policy analysis capability are available to provide decisionmakers with this kind of information. Specifically, the paper reviews a class of models that may be designated as retirement income policy models. The review is limited to existing models of programs within the U.S. retirement income system. The paper presents a general discussion of the components of such models. It describes features of models that are in the current portfolio and assesses components of those models. It furthermore presents examples of how the existing models might analyze two policy initiatives changing the "bend points" of the Social Security old-age and survivors insurance benefits and increasing the maximum allowable contributions to IRAs. The paper finds that the current capacity is not great, nor is it fully utilized. However, a foundation exists to be able to examine distributional impacts of retirement policy changes. Three concerns that need to be addressed now to assure that this foundation will be useful in the future are (1) assessing whether the existing modeling capacity is substantive enough and flexible enough to gear up in a short amount of time, (2) assessing whether decisionmakers will have adequate resources to support the necessary development and refinement of models, and (3) assuring that appropriate recent data sources are available to support the models.retirement, income, policy, Hollenbeck

The Returns to Education and Basic Skills Training for Individuals with Poor Health or Disability

This paper examines linkages between disability and health status and the returns to education and basic skills training. It bases analyses on two separate data sources: wave 3 from the 1993 panel of the Survey of Income and Program Participation (SIPP) and the 1992 National Adult Literacy Survey (NALS). The data sets have been used to estimate standard wage equations with education and basic skills training among the independent variables. The NALS data set allows us to control for prose, quantitative, and document literacy. The wage equations rely on Heckit corrections for labor force participation, and we stratify by sex. We also estimate the wage equations stratifying by disability status (also with an appropriate econometric correction) to permit the coefficient estimates on all the regressors to vary by disability status. Overall, we find that the returns to education for individuals with a disability or poor health are positive, although of moderate size and equal to the returns for the nondisabled population. The findings suggest supply side policy options that maintain or improve access to and retention in educational opportunities are indicated. Basic skills training seems to be especially advantageous for some individual

The Returns to Education and Basic Skills Training for Individuals with Poor Health or Disability

This paper examines linkages between disability and health status and the returns to education and basic skills training. It bases analyses on two separate data sources: wave 3 from the 1993 panel of the Survey of Income and Program Participation (SIPP) and the 1992 National Adult Literacy Survey (NALS). The data sets have been used to estimate standard wage equations with education and basic skills training among the independent variables. The NALS data set allows us to control for prose, quantitative, and document literacy. The wage equations rely on Heckit corrections for labor force participation, and we stratify by sex. We also estimate the wage equations stratifying by disability status (also with an appropriate econometric correction) to permit the coefficient estimates on all the regressors to vary by disability status. Overall, we find that the returns to education for individuals with a disability or poor health are positive, although of moderate size and equal to the returns for the nondisabled population. The findings suggest supply side policy options that maintain or improve access to and retention in educational opportunities are indicated. Basic skills training seems to be especially advantageous for some individuals.disability, education, returns, Hollenbeck, Kimmel