A new paper by Burt Barnow of George Washington University and Jeffrey Smith of the University of Michigan provides an extensive overview of education and training programs for low-income populations in the United States. They focus on programs administered by the Department of Labor primarily oriented toward unemployed adults, dislocated workers (for example, workers laid-off due to closure or downsize), and youth. The federal government spends roughly $12 billion per year on these programs, or about 0.5% of GDP.
Two main take-aways from the paper are worth noting: Evaluation evidence should be given greater consideration in funding programs and more program evaluations are needed.
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In reviewing the evaluation evidence that exists (even though it’s limited), they find positive results for workforce programs for adults, suggesting public investments in these programs are worthwhile. But little evidence points to the effectiveness of programs for dislocated workers. And Job Corps (a large federal program for youth) was not found to be cost-effective even though it resulted in positive outcomes for participants.
Yet, these latter two programs continue.
And many other programs go untested because of problems with data accessibility. The authors highlight problems with underreporting program participation in survey data, making it almost impossible to study programs using typical methods. The lack of publically available agency data is also apparently a problem unique to the United States. From the study:
The last two decades have seen a major “data gap” emerge between the United States and 123 various central and northern European countries. The administrative data available for research on government-subsidized training programs in the United States pales in comparison to that available in e.g. Germany, Sweden, or Denmark in its quality (i.e. richness of individual characteristics, temporal fineness of outcome variables, lack of measurement error in the timing and incidence of service receipt and enrollment, etc.), the ease with which serious researchers can gain access to it, and the ease with which they can use it if they do gain access.
These limitations associated with administrative data in the United States mean that much policy relevant research that would improve our understanding of training programs does not get done.
A key aspect in controlling the growth of spending in means-tested programs over the next several years is ensuring that programs are effective. This paper highlights the difficulties of this task, at least for education and training programs. But the lessons likely apply to other programs too and policymakers should take notice.
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