What the European Social Fund Can Learn from the WIA Experience Ten Years of the Workforce Investment Act: Interpreting the Research on WIA and Related Programs November 2009 What the European Social Fund Can Learn from the WIA Experience Paul Decker

Research Related to WIA WIA Implementation Studies Impact Studies WIA and other programs Adults and dislocated workers Experimental and nonexperimental Individual Training Account (ITA) Research Implementation ITA Experiment Related voucher programs

WIA Implementation Service coordination Customer empowerment Universal access Accountability Engaging the private sector Local flexibility Youth program improvement

Impacts of WIA on Adults Post -1995 Evidence National JTPA Study (Experimental) Increase in earnings modest but persistent Similar for men and women (in dollar terms) Services were cost effective for society Recent WIA Studies (Nonexperimental) WIA increases earnings; impacts persistent Effects of training positive and growing Effects of core/intensive positive and declining

Impacts of WIA on Dislocated Workers Post-1995 Evidence Job Search Assistance/WPRS (Experimental and Nonexperimental) Reduces UI spells Increases earnings modestly, impact fades Customized or one-size-fits all can work Cost effective Studies of Training (Nonexperimental) Trade Adjustment Assistance no effect Community college increases earnings for older workers, cost-effective

Impacts on Dislocated Workers (cont.) Recent WIA Studies (Nonexperimental) Small earnings gains, at best, for WIA overall Evidence particularly disappointing for training Nonexperimental estimates are flawed in this case Estimated social net benefits are negative

Structure of ITA Experiment ITA Experiment tested three models, including the common “guided choice” model

Findings From ITA Experiment Abolishing counseling requirements reduces counseling but increases pursuit and take up of ITAs; no significant impact on training part. Local counselors reluctant to be too prescriptive in guiding training decisions, even when given clear authority; denials extremely rare When ITA amounts are customized, counselors are generous and average ITAs increase substantially; Most prescriptive, generous ITA approach generates higher earnings than least prescriptive