improving skills through americas workforce development system

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1 Improving Skills Through America’s Workforce Development System Kevin Bauman and Cody Christensen SEPTEMBER 2018 AMERICAN ENTERPRISE INSTITUTE

2 Executive Summary olicymakers at the state and federal levels have - of individuals leveraging the workforce system com bine available Department of Labor training funds expressed concern over the emerging “skills P with money from other federal and state programs— - gap”—the mismatch between the job skills employ despite that many more might qualify for additional ers are looking for and the skills that applicants in the aid. Incongruent bureaucratic processes commonly labor market possess. The skills gap is most acute for middle-skilled inhibit the effectiveness of workforce training, and jobs; that is, jobs that require training four-year beyond high school but less than a policy requirements are not clearly communicated to college degree program. According to analysis by the National - training seekers, financial aid administrators, and pri - jobs account for 53 per middle-skilled Skills Coalition, vate entities. - cent of the United States labor market, yet only 43 per If the goal is to increase the number of job seek - middle-skill - cent of the labor force is trained to the ers that participate in high-quality training pro grams, more can be done to improve the coordination level. Some estimates have concluded the skills gap costs the US economy $160 billion annually in terms between the Department of Labor and these groups. This report offers recommendations for enhanc - of unfilled labor output, reduced productivity, and depressed earnings. ing the federal workforce development system by reviewing and identifying inefficiencies in the current To address these labor market challenges, many have turned to America’s workforce development system. It concludes by forwarding several policy sug - system. Recent efforts from Congress and the White gestions aimed at improving the way that Workforce Innovation and Opportunity Act funding is used by House confirm that policymakers are serious about expanding job seekers and training providers. job-training opportunities. But even with the heightened focus, a shockingly small percentage 1

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4 Improving Skills Through America’s Workforce Development System Kevin Bauman and Cody Christensen olicymakers at the local and federal level have are not easily automated, and usually necessitate 7 more training than a high school education. expressed concern over the “skills gap”—the P - mismatch between the job skills employers are look Employers and workers would do well to begin ing for and the skills that applicants in the labor mar thinking about the coming shifts in the economy - ket possess. Economists have cited many reasons for since the shortage of qualified workers can create 1 - real economic costs. Some estimates have concluded Jobs that require routine tasks are increas the gap. ingly automated, technological innovations have con the skills gap costs the US economy $160 billion - annually in terms of unfilled labor output, reduced tributed to a greater demand for specialized workers, 8 - and globalization trends have led some companies to Technolog productivity, and depressed earnings. ical innovation and more globalized markets could relocate oversees. The skills gap is most acute for the jobs; that is, jobs that require training middle-skilled displace a growing number of workers if they are not college beyond high school but less than a four-year retrained with skills needed for the modern econ - 2 Co-operation degree program. omy. The Organisation for Economic and Development estimates that in the next two Even with today’s historically low unemployment decades, roughly 35 percent of American jobs could - rate, approximately 6.3 million unemployed indi viduals are looking for work, and another 4.6 mil be at risk of being automated or requiring markedly - 9 different skill sets. While automation can create lion workers are in part-time jobs even though they 3 new jobs, those jobs commonly require higher levels Meanwhile, the employment. full-time would prefer Department of Labor reports over 6.7 million unfilled of training. 4 With these labor market challenges, many have job openings in the economy today. Why are inter - - turned to America’s workforce development sys ested job seekers unable to fill these available jobs? Researchers at Harvard University find that many tem to reequip job seekers with needed skills to - of these job openings—such as health care, transpor put them back to work. In fact, policymakers have tation, retail, and production—require workers with already taken some actions to address the skills gap. 5 - In 2014, Congress reauthorized the Workforce Inno Estimates from the National Skills middle skills. vation and Opportunity Act (WIOA), the primary Coalition suggest that up to 53 percent of jobs require federal legislation that supports workforce training. middle-skills workers but that only 43 percent of the 6 In the years labor force has that level of training. Recent efforts from the White House confirm that ahead, the Department of Labor estimates that health policymakers and business leaders are serious about care jobs will be among the occupations in highest expanding job-training programs. President Don - ald Trump has increased annual federal funding for demand. These jobs often require interpersonal skills, 3

5 BAUMAN AND CHRISTENSEN IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM policy requirements are not clearly communicated to training seekers, financial aid administrators, and What Is Workforce Development? private entities. orkforce development refers to job- If the goal is to increase the number of workers training programs, more W participating in high-quality training services to enhance the skills and can be done to improve the coordination between the employment opportunities of workers. Work - - force development can be offered through pub Department of Labor and these groups. Accordingly, this report offers recommendations for enhancing lic programs (such as American Job Centers) and private entities (such as employer-sponsored the federal workforce development system. It begins training). Workforce development attempts by describing the workforce development system, including its size, number of participants, available to connect job seekers to educational classes, -job training on-the services, eligibility requirements, and program pro - apprenticeships, and other viders. In the second section, the report identifies programs. It also provides information on local inefficient and counterproductive policies and offers job openings, application assistance, interview preparation, employer engagement, and job possible improvements. With a balanced approach, two-pronged WIOA can be enhanced so that job seekers better referral programs. Together, this system—providing both technical training and use available funding and engage in a healthy mar - ketplace of workforce development and training labor market information—helps equip Ameri - providers. cans with the skills and information needed to participate in the labor force. Origins of the Federal Workforce Development System apprenticeships from $90 million to $200 million, - The federal workforce development system sup established an apprenticeship task force, and signed several executive orders to help strengthen partner ports state and local agencies with the collective goal - of training (or retraining) workers with industry- or ships among employers, training providers, and job 10 skills. The federal government has had - seekers. More recently, Trump proposed combin trade-specific a long history of providing workforce training. The ing the Departments of Education and Labor to be the “Department of Education and the Workforce,” impetus for federal involvement dates back to the reiterating the administration’s vision that the pur - market failure during the Great Depression, when 12 pose of education is to not only learn but also pre - over 20 percent of the workforce was unemployed. 11 pare workers to participate in the labor force. Congress enacted the Wagner-Peyser Act of 1933, - which established the first federal workforce training While more focus is now on the workforce devel 13 programs. opment system, training seekers still face difficulties - In that era, funding for training was chan combining federal aid available through the Depart - neled to small, employment centers hyper-localized ment of Labor for training with other sources of to help displaced and unemployed workers transition funding. A shockingly small percentage of individuals to new occupations. - The workforce development system has been mod leveraging the workforce development system com - bine Department of Labor training funds with stu ernized throughout the 20th century. This includes - dent aid programs issued through other federal and the Manpower Development and Training Act of state agencies, even though many more might qual 1962, the Comprehensive Employment and Training - ify for additional aid, such as Pell Grants or career Act of 1973, and the Job Training Partnership Act of job-training 1982. These laws united many different and technical education state grants. In many cases, programs while also decentralizing services to give this is because incongruent bureaucratic processes inhibit the effectiveness of workforce training, and states and local agencies more freedom to design 4

6 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN 14 and operate training programs that fit local needs. The Benefits of Training During this time, training providers began to focus workforce development services for jobs that were 15 in high demand by employers. raining can create large benefits for firms and T The current federal workforce development sys - employees, but those benefits largely depend on the quality of training offered. The strongest tem has roots in the Workforce Investment Act (WIA), economic research shows that training can lead to passed in 1998, which consolidated local workforce 20 higher worker productivity and reduced turnover. development centers throughout the country into a nationalized network, now called the American Job This reduces costs for firms and results in higher production and revenue. Training can also lead to Centers. WIA also created a voucher system in which training seekers could use federal funding to pay for higher hourly wages for workers, but this is not 16 always the case. eligible training services of their choice. Research is mixed on how training affects work In 2014, Congress reauthorized WIA as the - 21 WIOA to improve “the structure of and delivery ers’ earnings and job placement. Recent reporting of services through the United States workforce has called attention to federally sponsored training programs that consistently report poor outcomes for development system to better address the employ - participants, and, in many cases, training participants ment and skill needs of workers, job seekers, and 17 WIOA attracted bipartisan support, from these programs land in jobs that they could employers.” 22 18 Encouraging have qualified for without training. passing the Senate with 95 votes. - The reauthori zation made several notable improvements to the programs is not what low-quality the proliferation of workforce system, such as allowing states to pro anyone has in mind when advocating for expanding - workforce training and development services. duce a single unified workforce plan and enabling At the same time, programs that help chron - providers to report common performance metrics. ically unemployed individuals reenter the labor WIOA took effect on July 1, 2015, and is authorized market play a valuable service, even if outcomes through 2020. In the Consolidated Appropriations Act of 2018, about $4.8 billion was allocated for might be lower than what some would desire. 19 As one specialist explained, “If these popula WIOA programs and services. - tions were easily employable, they would already 23 have jobs.” Offering skills to individuals with Private Workforce Development no earnings that helps move them into relatively and Training - jobs is still upward mobility that soci low-income - The current federal workforce development sys ety should reward. These jobs can start workers on career paths, take them off state welfare rolls, and - tem aims to provide training services in a com prehensive manner, but the government is not the potentially provide skills necessary for a changing labor market. only sponsor. In fact, the majority of spending that A point of contention is how much we should goes toward workforce training comes from private 24 Seventy percent of US firms report employers. spend per training recipient for these outcomes and long-term if certain types of training actually lead to offering some type of formal employee training, 25 benefits for workers. With that in mind, this report collectively costing them $177 billion per year. training programs occur in a work - primarily focuses on the amounts, types, and recip These - formal ients of training, rather than the quality of training place setting, are planned in advance, and follow a and outcomes of participants—although both the defined format or curriculum. - In addition to formal training, employers report amount and quality matter for improving America’s - workforce development system. informal train edly spend another $413 billion in 26 Unsurprisingly, informal training ing programs. 5

7 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN happens much more frequently, since it is unstruc - employees) offer training between 10 and 25 percent - - more often than small firms (50 or fewer employ tured, unplanned, and often occurs through com 35 training programs for Employee-sponsored ees). monplace work experiences. Researchers find that - basic or remedial skills are extremely rare, while train roughly 70 percent of all employer-sponsored employee-sponsored training for management, ing is informal training, while the rest is offered in a 27 formal setting. computer skills, safety, teamwork, and sales are 36 more common. - Despite some reports suggesting that employ Training programs offered by private compa ers are cutting back on workforce training, employer - nies remain an important component of Amer - spending on formal training programs has actually 28 ica’s workforce development system, but it is After controlling for infla increased over time. - - tion, analysis from Georgetown University’s Center necessary to recognize their shortcomings. By defini employer-sponsored on Education and the Workforce found that private tion, trainings only benefit those with jobs. Just a small fraction of employers report spending on training increased by 26 percent between 29 1994 and 2013. offering training for prospective hires, meaning that While employer spending on training has gone up in recent decades, fewer employees seem job seekers looking to reenter the labor force or shift industries are usually precluded from receiving to be taking advantage of it. 37 A 2015 Council of Economic Advisers report training. employer-sponsored Employer-sponsored found that, on average, the percentage of workers jobs middle-skills apprenticeships and internships for remain uncommon. In a Harvard survey, less than half employer-sponsored training declined who received 38 by 8 percent between 1996 and 2008. That report of companies reported offering such opportunities. found that only 11 percent of workers received As discussed, employers rarely sponsor training for 30 basic or remedial skills, suggesting that privately pro - However, training in 2008. employer-sponsored vided training is unlikely to help job seekers who have a 2014 joint report from the Departments of Labor, been chronically out of the workplace. Commerce, Education, and Health and Human Services reported that approximately a quarter of - Economic theory and research also reveal limita tions of private training. all employees received formal training from their - train Employee-sponsored 31 employer. ing often results in a suboptimal level of training Other older estimates have found that 39 between 35 and 65 percent of all workers received For services, for both employers and employees. 32 training. employer-sponsored some type of formal example, some low-income workers might not be - The incidence, intensity, and availability of pri able to participate in private training programs that -pocket costs—even though the firm vate training can greatly vary. Researchers have require out-of found that the incidence of employer-sponsored and employee would be better off from receiving the training is positively correlated with income and training. Employees also might avoid training if they educational attainment. The best available sur are unsure that it will lead to tangible benefits, such - vey data suggest that employees in the top income as higher wages. - quartile receive employee-sponsored training Similarly, companies might pull back from offer 22 percent more often than do employees in the training if they suspect the ing employer-sponsored training will cause their workers to be poached away bottom income quartile. Those high-income work - ers go through approximately 23 hours of training by other firms. In some markets, it is easier for firms every six months, compared to only four hours for to poach qualified workers from other companies 33 - low-income workers. if there are not policy or political barriers to pre 40 Similarly, employees with bachelor’s degrees or vent such behavior. Survey data suggest that US employers overwhelmingly prefer to hire a qualified higher receive employee-sponsored training about employee from another firm instead of training up 30 percent more often than workers with only high 34 41 Large firms (500 or more school diplomas or less. a current under-skilled employee. Together, these 6

8 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN - trends suggest that employers and workers rarely fac tor in the external benefits of training. A Necessary Government Role The remainder of this report focuses on federal overnment involvement continues to be workforce training programs authorized through WIOA, with a particular focus on Adult Services and G - necessary for encouraging workforce devel opment, since the private market alone commonly Dislocated Worker programs, since these services results in a “suboptimal” level of training partici - largely focus on providing skills to workers to reenter pation. In particular, the government is uniquely and stay in the labor force. situated to provide training subsidies for job seek - ers who have been chronically unemployed or lack WIOA Training Programs and Funding basic skills. Government funding for training can encourage those with income constraints to par - WIOA offers six core programs that help job seek - ticipate in workforce development programs. ers access workforce development and training However, policymakers should act with cau - tion, since government subsidies can be ripe for opportunities. These programs include education- gaming if not monitored carefully. Government- and skills-based training classes for adults, literacy funded training programs—such as those offered services, worker rehabilitation services, and more through WIOA—can result in windfalls for train (Table 1). The Adult Services, Dislocated Workers, - - programs are ing providers if aid is primarily used to fund over Youth Services, and Wagner-Peyser head costs instead of improving the quality or offered through the Department of Labor, while the Adult Education and Literacy and the Rehabilitation scope of training services. Actions to increase - government subsidies for workforce training Services programs are offered through the Depart - ment of Education. should be taken with care to reduce the possibil In addition to the six core programs, WIOA requires ity of gaming, manipulation, and waste. states to coordinate with 12 partner programs autho - rized by other federal legislation. WIOA requires these additional partnerships because individuals seeking - workforce training may not realize they can qualify Not everyone who participates in the federal work for federal benefits through other programs. Partner force development system receives training. Many participants just need information about job open - programs include Carl D. Perkins Career and Techni - cal Education, Community Development Block Grant, - ings and guidance counseling, and much of this infor caseworkers or on-site Temporary Assistance for Needy Families, and Jobs mation is provided through 42 Plus. If they desire, local workforce administrators . Older estimates under WIA, the previous self-service can partner with additional programs beyond the 12 law, found that about only half of participants who required by WIOA, so long as the partnering organiza - exited Adult Services and Dislocated Worker pro - grams received more than core services in 2007. The tion meets basic requirements. same report found that roughly 25 percent of a cen - Individuals interested in workforce training can 44 ter’s budget was spent on actual training programs. receive comprehensive information on all available programs at one of the nearly 3,000 American Job At this time, comprehensive and updated information Centers across the country, which serve as central - on these metrics is unavailable. ized one-stop For those participants who receive actual training, locations for employment and training 43 needs. These centers are staffed with case man - the programs are short term in nature and delivered by 45 caseworkers or through approved outside providers. agers who help counsel individuals on career and Under WIA, expenditure per training participant in employment opportunities and enroll them in train - ing programs. the Adult Services and Dislocated Worker programs 7

9 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN Table 1. WIOA Core Programs Adult Services Program • Offers career and training services to job seekers, including placing participants in a registered apprenticeship program, customized training, or transitional jobs. • Participants must be at least 18 years old. There is no income cap, but priority is given to low-income and low-skilled individuals and individuals receiving other public assistance. Dislocated Worker Program Offers training, job-search assistance, and labor market information for job seekers and workers who have been • laid off. • Provides career counseling and connects participants to job opportunities in their area. Provides supportive services such as transportation and childcare in some circumstances. • Participants must be at least 18 years old. There is no income cap, but priority is given to dislocated workers or • workers in long-term unemployment. Youth Services Program • Offers tutoring, alternative secondary schooling, work experience, occupational skills training, financial literacy training, postsecondary education, and information on local and regional labor market information. Participants must be ages 14–24. Priority is given to dropouts, homeless youth, and youths in foster care. • Wagner-Peyser Program • Provides employment exchange services in the form of job-search assistance, job referral programs, and application assistance. Career guidance and job-search workshops are also available. • All individuals are eligible to participate. Services are provided through staff delivery, online websites, and self-service. Adult Education and Literacy Programs Provide educational classes to help adults learn basic skills, including reading, writing, math, English-language • proficiency, and problem-solving. • Participants must be at least 16 years old. Priority is given to English-language learners, low-income individuals, and immigrants. Rehabilitation Services Program Provides services for individuals with physical or mental disabilities to obtain employment. • • Includes counseling, medical and psychological services, and job training. • Gives priority to individuals with disabilities, low-income and low-skilled individuals, and individuals receiving other public assistance. Source: US Department of Labor, Employment and Training Administration, “General Information,” www.doleta.gov/programs/ general_info.cfm ; US Department of Labor, Employment and Training Administration, “Wagner-Peyser/Labor Exchange,” www.doleta. gov/Programs/Wagner_Peyser.cfm ; US Department of Labor, Employment and Training Administration, “Fact Sheet: WIOA Youth Program,” www.doleta.gov/youth_services/pdf/WIOA_Youth_OWI_Fact-Sheet_12_2016.pdf ; and Zuzana Jerabek, “Fact Sheet: What Is WIOA Title II and Who Does It Serve?,” National Immigration Forum, https://immigrationforum.org/blog/fact-sheet-what- /. is-wioa-title-ii-and-who-does-it-serve 8

10 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN 46 migrants, and seasonal farmworkers. (See Table 1 for ranged from $3,000 to $5,000. Again, more recent more details on eligibility requirements by WIOA numbers for WIOA are currently unavailable. program.) In the Consolidated Appropriations Act of 2018, Congress allocated roughly $2.8 billion in grants to The number of individuals participating in WIOA states to fund the adult, youth, and dislocated worker programs has grown remarkably since the early- 51 - - programs. Specifically, states were given $850 mil In 2015, about six million individuals par 2000s. ticipated in WIOA’s Adult Services programs, and lion for adult employment and training activities, $900 million for youth activities, and $1 billion for - about 500,000 participated in Dislocated Worker pro 52 - dislocated worker employment and training activi This is a slight decline from 2013, when over grams. ties. In addition, Congress allocated about $620 mil - - eight million individuals participated in WIOA ser lion for Adult Literacy and Education programs, $670 vices. Today, participation in the Adult Services and million for Wagner-Peyser Dislocated Workers programs is much higher than in employment exchange the early 2000s, when participation hovered around programs, and another $700 million for national one million participants per year (Figure 1). partner programs, bringing total funding for WIOA Program exit rates have also increased in recent programs to approximately $4.8 billion for the 2018 47 years. “Program exit” simply implies an individual fiscal year. Once states receive the federal subsidies, fund - stops receiving workforce development services or participating in training, meaning the participant ing formulas are used to distribute money to indi - 48 vidual American Job Centers. may or may not have actually completed the program. In general, about More data are needed to determine if increased exit 85 percent of appropriated funding is allocated to - rates are due to a rise in program completion or pro local areas, and the other 15 percent is held back for 49 statewide programs. gram dropouts. (Therefore, policymakers should be The exact funding level for each American Job Center varies by state, but it is cautious when interpreting exit rate increases, since typically based on total infrastructure costs (such they do not necessarily suggest improvements in the as building rent, utilities, and equipment), staff workforce development system.) Regardless, high exit rates suggest there is a constant flow of new expenses, and the number of training participants participants trickling through the workforce devel - enrolled through that center. Additionally, WIOA opment and training programs (Figure 2). - requires that partner programs operating in Amer - ican Job Centers contribute to the infrastructure Demographic information of program partici 53 - costs, although some states cap how much partner Of pro pants also varies across WIOA programs. 50 gram exiters in 2015, about 30 percent of trainees programs are required to contribute. - in the Adult Services and Dislocated Worker pro grams were ages 30–44, which was the largest share of all age groups. Trainees ages 45–54 represented Who Participates in Workforce Training? the share, with a little under 20 per second-largest - cent of program exiters coming from this age range - The majority of workforce programs target dislo (Table 2). The gender breakdown between men and -work adults, and individuals out-of cated workers, unemployment. Individuals are eligible women is fairly balanced. In 2015, 49.6 percent of pro - in long-term gram exiters were women, and 49.7 percent were men for WIOA training services based on various factors, including their age and employment status. Services (Table 3). There is substantial variation in the race and ethnicity. In 2015, over half of all program exiters are widely available to any interested participant, in Adult Services and Dislocated Worker programs but certain programs and funding are prioritized for were white, and approximately a quarter were black and unemployed individuals. Some work low-income - or African American, followed by smaller shares of force programs cater to specific populations such as 54 nontraditional students, Native American workers, Hispanics, Asians, and other groups (Table 4). 9

11 BAUMAN AND CHRISTENSEN IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM Figure 1. Number of Participants in Adult Services and Dislocated Workers Programs, 2000–15 8,000,000 7,000,000 6,000,000 5,000,000 Adult Services Programs 4,000,000 3,000,000 Number of Participants 2,000,000 Dislocated Worker Programs 1,000,000 0 2000 2012 2010 2008 2006 2004 2002 2015 2014 Note: Data for 2012 are not available. The dotted line provides a smoothed estimate between 2011 and 2013. Pennsylvania, Utah, and Texas are excluded due to availability. www.doleta.gov/performance/ Source: US Department of Labor, “National Summary of Annual Performance Data,” 2015, Table M, www.doleta. ; and US Department of Labor, “WIA State Annual Reports and Summaries,” results/AnnualReports/annual_report_15.cfm gov/performance/results/WIASRD_state_data_archive.cfm . Figure 2. Exit Rate of Adult Services and Dislocated Workers Programs, 2000–15 100% 90% 80% og ices rv t Se ul ra ms Pr Ad 70% 60% 50% Pr er rk Wo ed at sl oc Di ms ra og Percentage 40% 30% 20% 10% 0% 2004 2002 2000 20082 010 20122 0142015 2006 - Note: Authors’ calculation based on Department of Labor data on program exiters and program participants. Available data do not dis - tinguish between completion and dropout for reason of exit. Data for 2012 are not available. The dotted line provides a smoothed esti mate between 2011 and 2013. Pennsylvania, Utah, and Texas are excluded due to availability. Source: US Department of Labor, “National Summary of Annual Performance Data,” 2015, Table M, www.doleta.gov/performance/ www.doleta. ; and US Department of Labor, “WIA State Annual Reports and Summaries,” results/AnnualReports/annual_report_15.cfm gov/performance/results/WIASRD_state_data_archive.cfm . 10

12 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN Table 2. Number and Share of Program Exiters costs. from Adult Services and Dislocated Worker WIOA funding operates like a voucher, in which Programs by Age, 2015 funds are directly deposited into an individual’s ITA and can be used on qualified expenses. ITA funds can Dislo - - be used to cover the costs of tuition, fees, and text All WIOA cated Age Adult Worker Categories Services Programs books, along with living expenses such as food, hous - 14–17 63 41,249 534 ing, transportation, childcare, and other support 56 The federal government allows states and services. (0.0%) (0.1%) (3.4%) local boards to set parameters for how ITAs can be 18–21 68,190 124,587 10,685 used. In general, ITA funds can be used to pay for a (7.7%) (10.1%) (2.5%) wide array of educational expenses, but some states 75,146 207,745 254,165 22–29 limit how aid can be used. For example, certain states (23.5%) (20.7%) (17.6%) prohibit using ITA funding for remedial courses or for 144,511 295,472 383,098 30–44 retaking failed classes, among other items. (33.4%) (33.9%) (31.1%) The law does not specify a maximum amount of 45–54 234,320 101,974 172,112 aid an individual can receive per year, although some (23.9%) (19.5%) (19.0%) states have introduced caps. For example, South 139,858 192,648 55 and over 93,620 Dakota limits WIOA funding at $10,400 per year for (22.0%) (15.8%) (15.7%) an individual, and some counties in Illinois have three tiers of funding between $3,000 and $8,000 depend - Not Reported 9 9 2 57 ing on the sector the training is for. Statistics on the (0.0%) (0.0%) (0.0%) average ITA amount is dated, but the best studies find Total Number that in the early 2000s, the modal ITA amount was 426,001 883,920 1,230,076 of Exiters roughly $5,000 and typically ranged between $2,000 58 and $7,500. Source: US Department of Labor, “PY 2015 WIASRD Data Book,” July 13, 2017, www.doleta.gov/performance/results/WIASRD/ PY2015/PY_2015_WIASRD_Data_Book_13July2017.docx . Table 3. Number and Share of Program Exiters from Adult Services and Dislocated Worker Programs by Gender, 2015 Individual Training Accounts - Dislo Individuals enrolled in training programs who Adult All WIOA cated Programs Services Gender Worker meet specified eligibility requirements can apply to receive federal aid through WIOA to offset costs. For Women 204,994 439,815 609,652 training participants in the Adult Services and Dis - (48.1%) (49.8%) (49.6%) located Worker programs, funding is distributed in Men 218,468 438,200 611,175 the form of a payment agreement, known as an Indi - (51.3%) (49.6%) (49.7%) vidual Training Account (ITA), established between 9,249 Not Reported 5,905 2,539 the workforce development board and the training (0.6%) (0.8%) (0.7%) 55 provider on the individual’s behalf. WIOA funding can be combined with other aid (such as Pell Grants, Total Number 1,230,076 883,920 426,001 of Exiters food stamps, career and technical education state grants, and services offered through the Department Source: US Department of Labor, “PY 2015 WIASRD Data Book,” - of Labor’s Employment and Training Administra July 13, 2017, www.doleta.gov/performance/results/WIASRD/ . PY2015/PY_2015_WIASRD_Data_Book_13July2017.docx tion) to cover unmet expenses related to training 11

13 BAUMAN AND CHRISTENSEN IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM An ongoing challenge in the Table 4. Number and Share of Program Exiters from Adult Services and Dislocated Worker Programs by Race, 2015 workforce development system is that comparatively few ITAs are Dislocated Adult All WIOA actually awarded to support skills Worker Race and Ethnicity Programs Services training. With available data today, Hispanic 176,386 104,494 60,605 we cannot see how many train - (14.3%) (11.8%) (14.2%) ing recipients use ITA funding, but 9,747 American Indian or Alaskan Native 11,857 3,047 older reports have found that of (0.7%) (1.0%) (1.1%) those who receive training, roughly 17,572 29,792 13,702 Asian 37 percent of participants in Adult (3.2%) (2.0%) (2.4%) Service programs and 41 percent of participants in Dislocated Workers Black or African American 326,843 238,678 81,028 programs used ITA funds to pay for (26.6%) (27.0%) (19.0%) 59 their training. This suggests that 2,989 1,241 3,786 Hawaiian or Other Pacific Islander the other training participants are (0.3%) (0.3%) (0.3%) enrolled in non-eligible programs 591,094 235,097 White 447,012 or simply do not understand how to (48.1%) (55.2%) (50.6%) use the funds that are available to 9,467 21,335 More Than One Race 27,711 them. Available data do not reveal (2.3%) (2.4%) (2.2%) how money is allocated at Ameri - 21,814 62,607 Not Reported 42,093 can Job Centers, but a significant (5.1%) (5.1%) (4.8%) amount of resources are consumed - in maintaining the WIOA infra 426,001 883,920 Number of Exiters 1,230,076 structure (such as building costs, Source: US Department of Labor, “PY 2015 WIASRD Data Book,” July 13, 2017, www. utilities, and staff ). This problem doleta.gov/performance/results/WIASRD/PY2015/PY_2015_WIASRD_Data_Book_ was documented in a 2001 evalua - . 13July2017.docx tion of the ITA system under WIA. Many of our local sites reported that they have that reduce the availability of aid for training. More much less money to spend on training than they research and evaluation is needed to determine how once did, in part because of the WIA requirement much WIOA funding is spent on overhead costs com - pared to how much is spent on training. system and three levels of One-Stop to establish a service, including core services for the entire labor force. Given this requirement, several states noted Determining Eligible Training Providers that there was not enough money to provide good quality core and intensive services and still have 60 Workforce training can be offered by educational funds available for training. - institutions, employers, and other private provid ers. WIOA requires each state governor to estab - Before the nationalized workforce system of one- lish a State Workforce Development Board (SWDB) stop centers authorized through WIA, workforce offi - cials found that more resources were available to sup - to oversee the providers offering workforce train - ing programs. Board membership includes the port skills training. While this analysis is dated, the nationalized network of one-stop centers (i.e., the state’s governor, representatives of each legislative representatives chamber, and American Job Centers) continues to operate, sug - governor-appointed of business and labor. The SWDB sets eligibility gesting that there could be large overhead costs 12

14 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN Table 5. Eligible Training Provider Requirements from Select States Connecticut (Programs Must Meet One of the Following for All Students) • Median earnings after program exit: $3,459/quarter • Average wage at placement: $9,344 • Credential attainment rate during participation or within one year after exit: 60% • Program completion rate: 60% • Employment rate after completion: 65% • Training-related employment rate: 65% Michigan (Programs Must Meet the Following for All Students) • Unsubsidized employment rate (second quarter after exit): 67% Unsubsidized employment rate (fourth quarter after exit): 67% • • Median earnings: $6,108 Credential attainment: 44% • Indiana (Programs Must Meet One of the Following for All Students) • Employment rate: 30% Credential rate: 50% • Median wage: $10/hour ($28,000/year) • Note: Program requirements are for initial program eligibility. Source: Connecticut Department of Labor, “Workforce Innovation and Opportunity Act (WIOA) Eligible Training Provider and Pro - gram Application Form,” June 25, 2018, www.ctdol.state.ct.us/wia/wioa-trngproviderapps.htm ; Michigan Talent Investment Agency, www.michigan.gov/documents/wda/MiTC_ “Michigan Training Connect (MiTC) Policy Manual Requirements and Guidelines,” ; and Indiana Workforce Development, “Eligible Training Provider List Eligibility and Establishment Under Policy_Manual_575623_7.pdf . www.in.gov/dwd/files/ETPL_Public_Comment.pdf the Workforce Innovation and Opportunity Act (WIOA),” requirements for workforce training providers. the local business community. Local boards have Training providers must meet targets on program - more detailed knowledge on the specific labor mar ket conditions in an area. completion rates, average employment rates two and four quarters after training, and median earn - The LWDB can set additional eligibility require - ing levels two and four quarters after training. In ments for providers located within its geographic addition to these metrics, the SWDB has the discre jurisdiction beyond those stipulated by the SWDB, - tion to set other eligibility criteria. Specific thresh but its requirements cannot fall below the baseline - - olds are set by each SWDB, and providers must also set by the state. Providers that fail to meet local pro gram requirements are ineligible to receive WIOA - include a demonstrated ability to meet local work - funds, even if the program meets the lower require force needs (Table 5). ments set by the SWDB. However, most LWDBs use Depending on their location, a provider may also SWDB eligibility requirements, so this occurrence is - have to meet additional locally determined eligi bility requirements. Under WIOA, states designate relatively rare. a Local Workforce Development Board (LWDB) Higher education institutions, businesses, and pri - for specific geographic areas in the state. In total, vate entities that meet all SWDB and LWDB eligibil - 61 there are 530 LWDBs across the country. Each ity requirements and submit all required information - to WIOA administrators become registered as eligi LWDB is composed of at least 19 individuals, and over half the board must be filled by members of ble training providers (ETPs) on the state’s eligible 13

15 BAUMAN AND CHRISTENSEN IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM Table 6. ETP Requirements from Selected States, Initial and Continued Eligibility Georgia: Initial Eligibility (Must Pass Two of Six for All Continued Eligibility (Must Pass Three of Six for Students) WIOA Students) • • Median earnings after program exit (second quarter): Median earnings: $11.50/hour $11.50/hour • Average wage: $10.70 Average wage at placement: $10.70 • Credential attainment rate: 60% • • Credential attainment rate during participation Completion rate: 70% • or within one year after exit: 60% • Employment rate: 70% • Program completion rate: 70% • Training-related employment rate: 70% • Employment rate after completion: 70% Training-related employment rate: 70% • Arkansas: Continued Eligibility (Must Meet All Three for Initial Eligibility (Must Meet for All Students) WIOA Students) Program completion rate: 19.5% • Unsubsidized employment rate (second quarter after • exit): 61% • Unsubsidized employment rate (fourth quarter after exit): 63% • Median earnings: $5,000/quarter Note: Programs must report on all WIOA outcomes, even if they are not held accountable for performance targets. Source: Georgia Workforce Provisions, “WIOA Training Provider Initial and Continuing Eligibility Determination Provisions,” www. georgia.org/wp-content/uploads/2015/09/Combined-Initial-and-Continued-Eligibility.pdf ; and Arkansas Consumer Report System, . “Initial Eligibility Certification Process,” www.workforce.arkansas.gov/acrs/Guides/ETPL%20Procedures.pdf were not already recognized under WIOA (or the training provider list (ETPL). Only training providers older WIA law) and lasts for one fiscal year. After that, on the state ETPL can receive WIOA funding through - an individual’s ITA account. a program must meet “continuing eligibility require The ETPL is made publicly available, usually in ments” to remain on a state’s ETPL. the form of a centralized search portal on a state In some states, continuing eligibility requirements non-ETPs as government website. Some states list are more stringent than initial eligibility, suggesting for on-ramp - well, with the option to refine searches to one cat that states may want to offer an easier providers and then increase accountability once there - egory or the other. Some providers may offer mul out program-level tiple training programs. For example, a community are sufficient data to report on - comes (Table 6). At all stages of eligibility, training - college (the training provider) may offer an account programs must address a demonstrated labor mar - ing program and a dental assistant licensing pro - ket need in the local area. This also means that WIOA gram. Providers offering multiple programs must meet the SWDB and LWDB eligibility requirements participants must either attend training programs related to the labor needs of their local area or be will for each program seeking to receive WIOA funding - from individual ITAs. The same provider may offer ing to relocate. some programs that are eligible for WIOA funding These eligibility requirements apply to all training - and others that are not. providers, with few exceptions. Registered appren first-time Eligibility may also differ for - and renewed ticeship programs are exempt from WIOA eligibil 62 programs. “Initial eligibility” applies to programs that ity requirements. Institutions of higher education, 14

16 BAUMAN AND CHRISTENSEN IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM Cost: Workforce Investment Act Leaves Many Jobless although they commonly offer training programs and in Debt,” listed many examples of unemployed accredited under Title IV of the Higher Education - workers who participated in expensive training pro Act, must still submit the requisite paperwork for grams and came out with no job and a mountain of each program seeking eligibility for WIOA funds. In some cases, training services can be delivered student debt. The article confused key components of WIOA with the federal student loan program, which to eligible individuals through providers not on a is authorized by the Higher Education Act, not WIOA state’s ETPL if an insufficient number of training 64 (or WIA). - In fact, WIOA does not offer any loan pro providers are in a local area. This is determined on -case basis by LWDBs and requires a waiver a grams for any of its services. case-by 63 Clearly, there is room to improve the public’s from the governor. In these cases, LWDBs provide pay-for -performance contracts to organizations or understanding of basic elements of the workforce development system, the services it offers, and how businesses willing to deliver on-the -job training, cus - funding can be used. At the very least, more can be tomized occupational training, incumbent worker - done to communicate how the workforce develop training, or transitional employment services. States ment system operates to interested job seekers. More can require these providers to report on the outcomes ambitious reforms could streamline information, of training participants. - enrollment, and services to allow for a healthier mar ketplace of training seekers and training providers. Recommendations to Improve the Workforce Development System - Enhance Coordination Between Higher Edu cation Financial Aid Officers and WIOA Case - In the last reauthorization of WIOA, legislators set Improving communication and cross workers. out to improve workforce training and development high-quality coordination between financial aid officers at col to allow more job seekers access to - , affordable training of their choice. While many com - leges and caseworkers at American Job Centers is one ponents of the prior law were improved, the process of the biggest opportunities to get more job seekers can still be unfamiliar and difficult to navigate. Some trained and back to work. Community colleges and job seekers may avoid the federal workforce system vocational schools account for a substantial group of WIOA training providers. In 2013, two-year colleges entirely, sacrificing available federal aid that could be pooled with other sources of funding. spent roughly $60 billion on workforce and education 65 The programs offered at these This section of the report offers recommendations training programs. to improve the federal workforce development sys schools typically lead to a degree or certificate, which - signals employers of a participant’s attainment of cer tem. While it is easy to simply call for more funding to - be spent on workforce development programs, those tain skills. proposals can be unrealistic. Policymakers balance - At the same time, many students attending com munity colleges already receive federal aid through limited federal resources against other competing the Pell Grant program, and some of these students priorities. Therefore, policy ideas to support training could likely benefit through additional financial aid recipients and providers must be more nuanced than offered by WIOA. Students enrolled at higher educa simply calling for “more money.” - tion institutions are eligible to receive federal finan - Clarify Services Offered by the Workforce cial aid through the Department of Education if the - Development System. As it turns out, program par students and the colleges they attend meet basic ticipants are not the only ones confused about WIOA requirements (Table 7). Typically, this aid comes New York Times ran a front-page funding. In 2014, the in the form of grants, scholarships, and subsidized article to critique the workforce development system. loans. Community college students might be enrolled in programs that are eligible for WIOA aid, but that The article, titled “Seeking New Start, Finding Steep 15

17 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN Table 7. Student and Institutional Eligibility to Receive Title IV Funds Through the Higher Education Act Student Eligibility Requirements • Demonstrate financial need (for most programs). • Be a US citizen or eligible noncitizen. • Be enrolled or accepted for enrollment as a regular student in an eligible degree or certificate program. • Complete the Free Application for Federal Student Aid. • Do not be in default on a federal student loan. • Maintain satisfactory academic progress in college or career school. • Be qualified to obtain a college or career school education, typically by having a high school diploma or a recognized equivalent such as a General Educational Development certificate. Institutions Eligibility Requirements • Be licensed or otherwise legally authorized to operate in the state it is located. • Be accredited or pre-accredited by an agency recognized for that purpose by the Department of Education. • Offer a bachelor’s degree program or a two-year program that leads to a bachelor’s degree, offer a degree that is accepted for admission to a graduate or professional program, or provide at least a one-year training program that prepares students for gainful employment in a recognized occupation. Admit only individuals with a high school diploma or its equivalent, individuals beyond the age of compulsory • school attendance, or individuals who are dually or concurrently enrolled in both the institution and a secondary school. Note: This list is not comprehensive. Source: For a full description of eligibility requirements, see Congressional Research Service, “Institutional Eligibility for Partici - pation in Title IV Student Financial Aid Programs,” June 26, 2017, https://www.everycrsreport.com/files/20170616_R43159_ 398f827cad288553bf67c39968994133096bcea7.pdf https://studentaid. ; and Federal Student Aid, “Basic Eligibility Criteria,” . ed.gov/sa/eligibility/basic-criteria training participants can help prospective students information may not be clearly communicated to financial aid counselors and students. better afford training. - Students seeking training (and training provid - In line with executive actions the Trump adminis ers offering the services) often lack the time and tration has already taken, state policymakers should look for creative ways to encourage partnerships resources needed to navigate the bureaucratic pro - between the workforce development and higher edu - cedures to pool WIOA funding with other sources. It cation systems, along with other private businesses. is rare to come across organizational structures that These partnerships can help students obtain available support deep domain expertise between institutions training funds and connect them to prospective com - of higher education and LWDBs. Across the roughly 6,000 Title IV–eligible institutes of higher education panies and career paths. and 3,000 American Job Centers in the workforce system, college financial aid offices and WIOA case Reduce or Modify Reporting Requirements 66 on Outcomes If the Tools Are Not Provided to managers typically remain separate and distinct. Training participants must While a few examples demonstrate collaboration and Deliver the Reports. - attend programs that have met eligibility require expertise, those cases are the exception dual-domain ments set by state and LWDB if they wish to use - and not the rule. Stronger coordination between col WIOA funding to pay for training. To gain and lege financial aid offices and WIOA caseworkers and 16

18 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN because of the performance requirement. In Texas, maintain eligibility, training providers are required to the number of programs dropped statewide by about report information on participants’ earnings, employ - - ment, measurable skills gain, and receipt of a second 80% from initial eligibility, when no performance ary diploma or credential. information was required, to subsequent eligibility. Nearly all of this drop came as a result of the commu - In particular, colleges can be reluctant to track 67 71 and report this information. Students can be diffi - nity colleges’ refusing to participate. cult to track after they leave campus, making accurate The current difficulties and reluctance around pro time-consuming and costly. This is particu - - reporting viding larly relevant at community colleges, where the tech outcome measurements explains student-level - nical infrastructure and support staff needed to track why, when it comes to WIOA funding, higher educa - data might be less developed than the tion institutions that would otherwise be added to a student-level four-year what might be found at flagship institutions state’s ETPL opt not to participate, even if doing so 68 for-profit or private Tracking the employ results in more student financial aid. It is ironic that schools. - the much larger outlay of tax dollars through Title IV ment and earnings of program participants is often of the Higher Education Act comes with relatively few activities cited as one of the most resource-intensive reporting requirements, while the much smaller out - that workforce training providers face after receiving lay through Title I of WIOA has much more onerous WIOA funds. In some cases, if just one student in a reporting stipulations. program receives WIOA funding, that institution has Accordingly, policymakers should identify and to track the employment and earnings outcomes for 69 all students in the program. minimize barriers that make community colleges and vocational schools reluctant to participate in A report for the US Government Accountability Office found that many workforce officials experienced WIOA. A commonsense, simple solution would be to require reporting on only students who receive challenges reporting data on credential attainment and WIOA funding, which would significantly reduce employment since there is no centralized source of this reporting burdens on training providers. Another information. The report found that managers had to piece together employment information from various possible solution would be to require reporting on sources, including employers, - from par self-reporting performance and outcome data for only those pro - 70 - grams that have a certain percentage of individu ticipants, and unemployment wage records. als receiving WIOA funding. Additionally, states In addition, sometimes student outcomes such as state-level could link their employment and earnings are out of a college’s con - data sets to help training providers better track participants over time. This trol, and poor outcomes in the labor market may not - would involve linking state tax records with enroll be directly related to the quality of education a college ment records, which would allow an easily verifiable, provided. Some students may choose not to work after non-falsifiable obtaining a degree or pursue careers with low expected way to track a participant’s earnings and labor force participation data. Integrated state earnings, such as social work. A recent report prepared for the US Department of Labor captures the cultural and local data reporting systems could ultimately reluctance around reporting requirements. cut down on the amount of time and money that - financial aid officers, caseworkers, and other train ing officials spend trying to track and maintain accu - Reactions of the community colleges to this [report - ing] requirement are generally quite different from rate records. - those of the proprietary schools. We found the for While reporting is needed to adequately moni - mer group to be, on average, quite distressed with the tor training providers and hold them accountable for receiving taxpayer funds, the government should idea that they would need to provide performance - data. For example, in SELACO, the local commu provide more tools to help the providers collect the nity college did not apply for the eligible provider list required data. 17

19 BAUMAN AND CHRISTENSEN IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM sources are not better used. As an example, the num - Consider New Ways to Prioritize Training at ber of WIOA participants currently taking advantage American Job Centers. Estimates from the mid- of the Pell Grant remains exceptionally small. In the 2000s have shown that only about half of all par - 2015–16 school year, only 8,500 program exiters who ticipants in Adult Services and Dislocated Worker received aid through WIOA’s Adult Service programs programs receive actual training. Of those training 74 recipients, only about a quarter of them use ITA funds also received a federal Pell Grant. - If we conserva 72 tively assume that only one in 10 individuals who par to pay for it. - If the goal of the workforce develop - ment system is to provide job seekers with resources ticipated in Adult Services programs were enrolled in to receive training for skills needed in the economy, a Title IV–eligible school, that would mean only about 1.58 percent of all those leaving the training program those numbers suggest it is doing a lousy job. had received a Pell Grant. Assuming that only one in Policymakers should think about ways to flip the 100 students exited from Title IV–eligible schools spending structure in the workforce development 75 would mean that 15.8 percent received a Pell Grant. system, so more funding is prioritized for training ser - vices to provide job seekers with the skills they need While available data do not indicate how many of these program exiters were enrolled in a program at a Title in the labor force. Admittedly, this is a difficult task, as - IV–eligible institution, or if the students were Pell eligi many of the overhead costs of American Job Centers - ble, it still represents a shockingly low amount of cross are fixed (such as rent, utilities, and staff ). Reducing over between the two federal aid programs. these costs can be difficult without other significant changes. Not all WIOA participants receive actual train - ing through outside providers, and for those who do One reason that so much of an American Job Cen - ter’s budget is spent on infrastructure and overhead receive training, it is possible they have no unmet is that maintaining a national network of one-stop costs in their training costs or that funding available - centers is inherently expensive. The federal govern - through an ITA is enough to cover all expenses. How ever, training seekers could have also shopped around ment should consider surveying if every American Job Center is strictly necessary and determine if combin - for cheaper programs, thinking that (without addi - ing services and building rentals would reduce these tional aid, which they might not know they had access - fixed costs. If some centers are systematically under to) more expensive programs would be out of reach. subscribed, policymakers should weigh if keeping that To address this problem, financial aid officers and center open is worth the costs and if the funds could WIOA caseworkers should have special procedures be used more effectively at other centers. for helping WIOA training participants easily access Additionally, some workforce development pro available federal aid. - Pell Grants are not the only other source of fund - grams have prioritized core services (such as guidance counseling and information) and only steer job seek ing for training seekers. A 2016 letter coauthored by - 73 Pol ers into actual training programs as a last resort. - six federal agencies outlined ways that unemployed icymakers should consider ways to encourage WIOA individuals can access a wide array of federal aid pro - caseworkers to offer training services from the start if grams to help finance the costs of higher education 76 it is clear participants need more than core services. - The letter, which is essen and training programs. This can potentially cut down on overhead costs and tially a consolidated resource guide, still leaves many lead to more individuals receiving training for the complex questions for interested training seekers to skills needed in the economy. Albeit, it is unclear how figure out on their own. Even with the guide, students expensive this type of reform will be. must navigate through complicated federal websites and application processes that do not necessarily Help WIOA Participants Use Other Available overlap or allow for funding flexibility. Federal and State Funding. Expanding and priori - The interagency list of funding sources includes tizing training services will be costly if other funding WIOA, among many other possible funding streams, 18

20 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN - example, the cost of a firm to put on a training sem yet only refers interested students to various depart - inar for 25 people (their employees) or 30 (their mental websites that may or may not align with their -use, and easy-to employees plus five outside participants) is virtually specific training program. Clear, direct instructions are not provided, which can create the same. At the same time, connecting job seekers a large hurdle for individuals without the background with employers can help interested workers get back to work. Private companies are unlikely to take this knowledge on how to best navigate the workforce development system. action on their own because there is no guarantee that training results in a more talented labor pool and A better approach would be to allow students - because the training could lead to a firm’s competi who are both WIOA and Pell eligible—and enrolled Pell-eligible tors poaching unhired training recipients. at WIOA- and institutions—an easier channel to receive and pool both funding sources together. This would make it simpler for prospective - students to pay for the full price of train low-income Financial aid officers ing. The bottom line: A streamlined process could help students better navigate the bureaucracy and and WIOA caseworkers access available resources from both departments. should have special Encourage Private Businesses to Offer Training to Nonemployees, Especially in High-Demand procedures for Out of all groups of training providers, Occupations. - private businesses spend the most on training ser helping WIOA training vices. Employers spend about $590 billion each year in formal and informal training programs for their participants easily employees. This training is usually outside the federal workforce development system. Companies either access available provide training services themselves or sponsor out - side training providers. Businesses, which know the federal aid. skills they are looking for, rationally invest in desired services. Understandably, these private training pro - However, this can create important and unan grams do not need to register with the government, - swered questions about accountability. Policymak meet eligibility requirements, or report outcomes. - ers will likely want to ensure that private companies At the same time, survey data suggest that busi - nesses rarely offer training services for nonem receiving government aid are held accountable like - ployees or prospective hires. Since this type of other private training providers through WIOA. private training is highly catered to the specific skills For the policy to work, steps will need to be taken - employers are needing, policymakers should con to make offering training to nonemployees worth sider expanding partnerships with businesses that the reporting costs. This could be done through tax credits or through government aid to offset costs can encourage them to include nonemployees and prospective hires in privately sponsored training of training nonemployees. Alternatively, employers programs. could hire a small percentage of the nonemployee Certain private training programs are naturally training participants in return for the federal aid. - conducive to including nonemployees, such as edu Since the majority of training takes place outside the services offered through WIOA, policymakers and cational classes, presentations, and workshops. For - these training programs, the marginal cost of allow - employers would do well to improve the partner ing nonemployees to attend is relatively small. For ships between them. 19

21 BAUMAN AND CHRISTENSEN IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM Figure 3. ETP Reciprocity Agreements Among States, 2015 100% 90% 80% 70% 60% 60% 50% Percentage 40% 30% 20% 16% 16% 11% 11% % 10 0% ov ppr A me Sa al r No he iated ev Abbr t A Fo Ot rm al Re rm Pe ciproc Ap pr itted tate ov as In-S ess al al Pr oc es Ag Prog s Pr oc ra ms t en em re Note: Forty-five states responded to the question on the survey. States were permitted to select multiple answers, which is why the total percentage adds to more than 100. The following states did not respond to the survey: Idaho, Louisiana, Mississippi, Nebraska, New Jersey, and Ohio. Source: Amy Kracker Selzer and Lauren Eyster, How States Manage Eligible Training Provider Lists: Findings from a State Survey , US Department of Labor, Employment and Training Administration, June 2, 2015, https://wdr.doleta.gov/research/FullText_Documents/ ETAOP-2017-10%20EPTL%20Report%20%28Accessible%20PDF%29.pdf. Expand Reciprocity Agreements Between programs from other states to be added to their ETPL It remains difficult for national employers list (Figure 3). States. The lack of reciprocity agreements can create a to partner with national online education providers - multitude of problems for trainees and providers, to provide workforce training. Under current pol particularly for those who commute across state lines icy, those national education providers would need to potentially navigate hundreds of ETP approval for work. Many states allow individuals to use WIOA processes to become registered on each state and funds for an out-of -state program as long as the other state’s ETPL includes the program. At a minimum, local ETPL that they wish to operate. This creates a bureaucratic nightmare for companies and can limit - the policies in the states that currently prohibit train ing programs based in other states from being added what states and regions they can operate in. to their own ETPL should be modified to allow these - In a survey of 45 state workforce agencies, 60 per cent of responding states said that training provid - programs to go through the approval process. In doing ers from other states are required to go through the so, these states allow their citizens a wider range of training options. same approval process as in-state - programs, regard States with reciprocity agreements could also less of whether they are included on another state’s 77 ETPL. This is duplicative and counterproductive. In - consider an abbreviated approval process for pro grams already approved by another state’s SWDB. addition, 11 percent of the responding states prohibit 20

22 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN In addition, all states with reciprocity agreements With these challenges in mind, rethinking the would be better equipped to handle online training workforce training system offers an opportunity to - providers. However, as states look to expand reci train students and job seekers for jobs needed in the - procity agreements, there remain unanswered ques years ahead. Trump’s latest proposal to combine the tions about how to best ensure program quality and Education and Labor Departments reflects the need for lifelong learning for workers to participate in a accountability while balancing the need for an adapt - continuously changing job market. In line with that able and efficient workforce training system. - goal, this report has offered a few ideas on how poli - cymakers might consider improving America’s work force development system to reduce administrative Conclusion hurdles among other government agencies, workforce The nation will likely always face a “skills gap” chal training providers, and higher education institutions. - - lenge as the need for upskilling and retraining work ers attempts to keep pace with new technologies in About the Authors a changing labor market. Creating a streamlined and adaptable infrastructure that serves both the learner is regional vice president with and training provider will be crucial to expanding Kevin Bauman alternative pathways to the labor force. goFLUENT, an online language learning provider. is a research assistant at the Importantly, the goal of the federal workforce sys - Cody Christensen American Enterprise Institute. tem should not just be to expand training; it should be to expand quality training, which connects job seekers with education and skills to be employed, earn decent Acknowledgments wages, and open the door to career success. A more talented labor pool helps both job seekers and firms. The authors would like to thank Naomi Chan, Dar - At the same time, sometimes training programs do ius Brown, Tyler Dang, and Bradley Erickson for their not pay off for participants, and continuous improve - workforce high-quality ment will be needed to elevate excellent research support throughout the produc - development programs. tion of this report. 21

23 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN Appendix A Table A1. Number of Local Workforce Development Boards, by State Number of Number of State State Local Boards Local Boards Montana 0 Alaska 0 Nebraska 3 Alabama 3 Nevada 2 Arizona 12 0 New Hampshire Arkansas 10 17 New Jersey California 45 New Mexico Colorado 9 4 Connecticut 5 33 New York 23 North Carolina District of Columbia 0 0 North Dakota Delaware 0 Ohio 20 Florida 24 Georgia 18 Oklahoma 7 Hawaii 4 Oregon 9 Pennsylvania 22 Idaho 0 2 Illinois 22 Rhode Island Indiana 12 South Carolina 12 South Dakota Iowa 15 0 Tennessee 13 Kansas 5 Texas 28 Kentucky 10 Louisiana 15 Utah 0 Maine 3 Vermont 0 Maryland 12 Virginia 15 Washington 12 Massachusetts 16 Michigan 16 7 West Virginia Minnesota 16 Wisconsin 11 Mississippi 4 Wyoming 0 Missouri 14 Total 530 Note: In addition to the local boards, each state has one State Workforce Development Board. For states with zero local boards, they have only a state board. US territories are excluded. Source: CareerOneStop, “Workforce Development Board Finder,” accessed December 15, 2017, www.careeronestop.org/ LocalHelp/WorkforceDevelopment/find-workforce-development-boards.aspx?newsearch=true. 22

24 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN Notes http://www.aei.org/publication/ 1. Aparna Mathur, “Job Vacancies and the Skills Gap,” American Enterprise Institute, April 5, 2017, . job-vacancies-and-the-skills-gap/ 2. Burning Glass reports that over seven million online job postings in 2013 were for middle-skilled positions. Nearly 40 percent of business leaders report that middle-skills positions are “very difficult” or “somewhat difficult” to fill. The ManpowerGroup’s annual talent shortage report consistently finds that middle-skills trade jobs are the most difficult to fill due to a lack of qualified and available workers. For more information, see Joseph Fuller et al., “Bridge the Gap: Rebuilding America’s Middle Skills,” Accenture, Burning Glass, and Harvard Business School, 2013, ; and Manpower v - https://www.hbs.edu/competitiveness/Documents/bridge-the-gap.pdf www.manpowergroup.us/campaigns/talent-shortage/assets/pdf/2016-Talent- Group, “2016/2017 U.S. Talent Shortage Survey,” 2016, Shortage-Whitepaper.pdf . 3. Historical long-term unemployment rates average around 5 percent. In August 2018, the U-3 unemployment rate was 3.9, and the U-6 unemployment rate was 7.5 percent. U-6 measures total unemployed workers and all individuals marginally attached to the labor force or working part time for economic reasons. For more information, see Mathur, “Job Vacancies and the Skills Gap”; and US Department of Labor, Bureau of Labor Statistics, “Economic News Release,” accessed August 3, 2018, www.bls.gov/news.release/pdf/ empsit.pdf . 4. US Department of Labor, Bureau of Labor Statistics, “Economic News Release,” accessed August 25, 2018, https://www.bls.gov/ news.release/jolts.a.htm . 5. Fuller et al., “Bridge the Gap.” 6. National Skills Coalition, “United States’ Forgotten Middle,” 2017, www.nationalskillscoalition.org/resources/publications/ 2017-middle-skills-fact-sheets/file/United-States-MiddleSkills.pdf . US Department of Labor, Bureau of Labor Statistics, “Table 1.3 Fastest Growing Occupations, 2014 and Projected 2024,” April 18, 7. 2016, https://www.bls.gov/emp/ep_table_103.htm ; and Fuller et al., “Bridge the Gap.” Anne Fisher, “Unfilled Jobs Cost the U.S. Economy $160 Billion a Year,” November 18, 2014, http://fortune.com/2014/11/18/ Fortune, 8. unfilled-jobs-us-economy/ . 9. Organisation for Economic Co-operation and Development, “Automation and Independent Work in a Digital Economy,” May https://www.oecd.org/els/emp/Policy%20brief%20-%20Automation%20and%20Independent%20Work%20in%20a%20Digital% 2016, . 20Economy.pdf 10. Ian Kullgren and Marianne Levine, “Trump Signs Executive Order on Apprenticeships,” Politico , June 15, 2017, www.politico.com/ story/2017/06/15/trump-apprenticeship-executive-order-239590 ; US Department of Labor, “U.S. Secretary of Labor Acosta Announces Membership of Task Force on Apprenticeship Expansion,” news release, October 16, 2017, www.dol.gov/newsroom/releases/osec/ osec20171016 ; and White House, “Executive Order Establishing the President’s National Council for the American Worker,” July 19, 2018, www.whitehouse.gov/presidential-actions/executive-order-establishing-presidents-national-council-american-worker/ . 11. Sara Ganim et al., “White House Proposes Combining Education and Labor Departments as Part of Massive Government Over - haul,” CNN, June 21, 2018, www.cnn.com/2018/06/21/politics/education-labor-departments-trump-government-restructure/index. html. 12. Stanley Lebergott, “Technical Note: Labor Force, Employment, and Unemployment, 1929–39: Estimating Methods,” US Depart - ment of Labor, Bureau of Labor Statistics, 1948, https://www.bls.gov/opub/mlr/1948/article/pdf/labor-force-employment-and- unemployment-1929-39-estimating-methods.pdf. 13. US Department of Labor, Employment and Training Administration, “Fact Sheet: Workforce Investment ACT,” April 5, 2018, https://www.doleta.gov/programs/factsht/wialaw.cfm . 14. Randall W. Eberts, “Individual Training Accounts Provided Under the U.S. Workforce Investment Act,” W.E. Upjohn Institute, . 2010, http://research.upjohn.org/cgi/viewcontent.cgi?article=1064&context=confpapers 23

25 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN Robert J. LaLonde, “Employment and Training Programs,” in Means-Tested Transfer Programs in the United States, 15. ed. Robert A. . http://www.nber.org/chapters/c10261.pdf Moffitt (University of Chicago Press, 2003), Workforce Investment Act of 1998, Pub. L. No. 105-220. 16. 17. Workforce Innovation and Opportunity Act, USC § 3101 (2014). www.senate.gov/legislative/LIS/ 18. US Senate, “Roll Call Vote 113th Congress—2nd Session, H.R. 803 (SKILLS Act),” June 25, 2014, roll_call_lists/roll_call_vote_cfm.cfm?congress=113&session=2&vote=00214 . 19. Authors’ calculation based on Department of Labor and Education budget documents. See US Department of Labor, Employ - ment and Training Administration, “State Statutory Formula Funding,” June 1, 2018, https://www.doleta.gov/budget/statfund.cfm ; US https://www2.ed.gov/programs/adultedbasic/ Department of Education, “Adult Education—Basic Grants to States,” May 3, 2018, ; US Department of Labor, “Employment Service (Wagner-Peyser) PY 2018 vs PY 2017 Final Allotments,” 2018, funding.html www. ; and Consolidated Appropriations Act, H.R. 1625, 115th Cong., 2nd sess., doleta.gov/budget/docs/18es$.pdf https://www.congress.gov/ 115/bills/hr1625/BILLS-115hr1625enr.pdf . 20. Daron Acemoglu and Jörn-Steffen Pischke, “Beyond Becker: Training in Imperfect Labor Markets,” Economic Journal 109, no. 453 (February 1999), http://www.jstor.org/stable/2565588; and US Department of Labor et al., “What Works in Job Training: A Synthesis of the Evidence,” July 22, 2014, https://www.dol.gov/asp/evaluation/jdt/jdt.pdf. 21. Robert I. Lerman, Signe-Mary McKernan, and Stephanie Riegg, “The Scope of Employer-Provided Training in the United States: Who, What, Where, and How Much?,” W.E. Upjohn Institute, 2004, http://research.upjohn.org/cgi/viewcontent.cgi?article= 1175&context=up_bookchapters. 22. Glenn Thrush, “$1.7 Billion Federal Job Training Program Is ‘Failing the Students,’” New York Times , August 26, 2018, www. nytimes.com/2018/08/26/us/politics/job-corps-training-program.html. 23. Thrush, “$1.7 Billion Federal Job Training Program Is ‘Failing the Students.’” Anthony P. Carnevale, Jeff Strohl, and Artem Gulish, “College Is Just the Beginning: Employers’ Role in the $1.1 Trillion Postsec - 24. ondary Education and Training System,” Georgetown University, Center on Education and the Workforce, 2015, https://cew. georgetown.edu/cew-reports/college-is-just-the-beginning/ ; and Lerman, McKernan, and Riegg, “The Scope of Employer-Provided Training in the United States.” 25. Some research indicates that employers overestimate how much training they actually provide. For example, see research cited in Lerman, McKernan, and Riegg, “The Scope of Employer-Provided Training in the United States”; US Department of Labor et al., “What Works In Job Training”; and Carnevale, Strohl, and Gulish, “College Is Just the Beginning.” 26. Carnevale, Strohl, and Gulish, “College Is Just the Beginning.” Maureen Conway, Amy Kays Blaire, and Catherine Gibbons, “Investigating Demand Side Outcomes: Literature Review and 27. Implications,” Aspen Institute, March 2003, . https://assets.aspeninstitute.org/content/uploads/files/content/docs/03-OP03.PDF 28. Angela Hanks and David Madland, “Better Training and Better Jobs: A New Partnership for Sectoral Training,” Center for Ameri - can Progress, February 2018, https://www.americanprogress.org/issues/economy/reports/2018/02/22/447115/better-training-better-jobs/ . 29. Carnevale, Strohl, and Gulish, “College Is Just the Beginning.” See the appendix of the report, where the authors list that inflation adjustments are made using CPI-U-RS and reports all expenditures in 2013 dollars. 30. Council of Economic Advisers, “Economic Report of the President,” February 2015, https://obamawhitehouse.archives.gov/sites/ default/files/docs/cea_2015_erp.pdf . 31. US Department of Labor et al., “What Works In Job Training.” 32. Robert I. Lerman, Signe-Mary McKernan, and Stephanie Riegg, “Employer-Provided Training and Public Policy,” Urban Institute, December 20, 1999, . https://wdr.doleta.gov/conference/pdf/mckernan1.pdf 33. Lerman, McKernan, and Riegg, “The Scope of Employer-Provided Training in the United States.” 34. Lerman, McKernan, and Riegg, “The Scope of Employer-Provided Training in the United States.” 35. Lerman, McKernan, and Riegg, “The Scope of Employer-Provided Training in the United States.” 36. Lerman, McKernan, and Riegg, “The Scope of Employer-Provided Training in the United States”; Lerman, McKernan, and Riegg, “Employer-Provided Training and Public Policy”; and Conway, Blaire, and Gibbons, “Investigating Demand Side Outcomes.” 24

26 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN Fuller et al., “Bridge the Gap.” 37. Fuller et al., “Bridge the Gap.” 38. 39. Gary S. Becker, “Human Capital: A Theoretical and Empirical Analysis,” University of Illinois at Urbana–Champaign, Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, 1964, https://ssrn.com/abstract=1496221 ; Acemoglu and Pischke, “Beyond Becker”; Lerman, McKernan, and Riegg, “Employer-Provided Training and Public Policy”; Lerman, McKernan and Riegg, “The Scope of Employer-Provided Training in the United States”; and Conway, Blaire, and Gibbons, “Investigating Demand Side Outcomes.” 40. Peter A. Hall and David Soskic, Varieties of Capitalism: The Institutional Foundations of Comparative Advantage (Oxford Univer - sity Press, 2001). 41. Lerman, McKernan, and Riegg, “Employer-Provided Training and Public Policy”; and Fuller et al., “Bridge the Gap.” 42. The full list of partner programs includes Community Services Block Grant, Job Plus, Indian and Native American, Senior Com - munity Service Employment, Temporary Assistance for Needy Families, Trade Adjustment Assistance, Jobs for Veterans State Grants, Unemployment Insurance, Job Corps, YouthBuild, and Migrant and Seasonal Farmworkers. For more information, see US Department of Labor, Employment and Training Administration, “Training and Employment Guidance Letter No. 16-16, Attachment II,” January 18, 2017, https://wdr.doleta.gov/directives/attach/TEGL/TEGL_16-16_Attachment-II_Acc.pdf . 43. US Department of Labor, Employment and Training Administration, “The Public Workforce System,” June 1, 2018, https://www. doleta.gov/business/pws.cfm . For more information about finding an American Job Center in your area, see CareerOneStop, https:// www.careeronestop.org/Site/american-job-center.aspx . 44. Eberts, “Individual Training Accounts Provided Under the U.S. Workforce Investment Act.” 45. The length of training varies widely by state and program but is generally less than 12 months. Compared to the length of time required to obtain an associate degree or bachelor’s degree (two to four years, on average), WIOA programs are significantly shorter on average. See Eberts, “Individual Training Accounts Provided Under the U.S. Workforce Investment Act.” Eberts, “Individual Training Accounts Provided Under the U.S. Workforce Investment Act.” 46. 47. Authors’ calculation based on Department of Labor and Education budget documents. See US Department of Labor, “State Stat - utory Formula Funding”; US Department of Education, “Adult Education”; US Department of Labor, “Employment Service (Wagner- Peyser) PY 2018 vs PY 2017 Final Allotments”; and Consolidated Appropriations Act, H.R. 1625, 115th Cong., 2nd sess. 48. REDFworkshop, “Workforce Innovation and Opportunity Act: How WIOA Supports Employment and Training Programs, and How Social Enterprises Can Benefit,” https://redfworkshop.org/learn/wioa . Hanks and Madland, “Better Training and Better Jobs.” 49. For example, Colorado is a state that caps partner program contributions. See Colorado Workforce Development Council, 50. “WIOA State Infrastructure Funding Formula,” May 2, 2017, https://www.colorado.gov/pacific/sites/default/files/PGL-WIOA-2016-03_ State-Infrastructure-Funding-Formula-Change-1.pdf . 51. Participation in workforce development programs authorized through WIOA began rapidly increasing between 2004 and 2007, suggesting that participation in training programs could be countercyclical. 52. US Department of Labor, Employment and Training Administration, “Workforce System Results for the Quarter Ending June 30, 2016,” . https://www.doleta.gov/performance/results/pdf/DOL_Workforce_Rprt_June_2016.pdf 53. Not all program participants are necessarily training recipients. For example, some program participants could simply have obtained labor market information on local job openings. 54. Not all program exiters receive actual “training.” Program exiters include individuals who simply seek core services and informa - tion, not training. 55. Hanks and Madland, “Better Training and Better Jobs.” 56. South Dakota Department of Labor and Regulation, “Occupational Skills Training,” https://dlr.sd.gov/workforce_services/wioa/ wioa_manual/5.27_occupationalskillstraining.pdf . 57. Karin M. Norington-Reaves, “Individual Training Account (ITA) Policy,” September 7, 2017, http://www.workforceboard.org/ . media/18476/WIOA-Policy-2017-PL-06-Individual-Training-Account-9717.pdf 25

27 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN Figures in nominal dollars. Eberts, “Individual Training Accounts Provided Under the U.S. Workforce Investment Act”; Kelly S. 58. Mikelson and Demetra S. Nightingale, “Estimating Public and Private Expenditures on Occupational Training in the United State,” US Department of Labor, Employment and Training Administration, 2004, https://wdr.doleta.gov/research/FullText_Documents/ Estimating%20Public%20and%20Private%20Expenditures%20on%20Occupational%20Training%20in%20the%20United%20States. pdf ; and Ronald D’Amico and Jeffrey Salzman, “Implementation Issues in Delivering Training Services to Adults Under WIA,” W.E. Upjohn Institute, 2004, https://research.upjohn.org/cgi/viewcontent.cgireferer=https://scholar.google.com/&httpsredir=1&article= 1164&context=up_bookchapters. 59. Eberts, “Individual Training Accounts Provided Under the U.S. Workforce Investment Act.” Social Policy Research Associates, “An Evaluation of the Individual Training Account/Eligible Training Provider Demonstration,” 60. August 2001, https://wdr.doleta.gov/research/FullText_Documents/An%20Evaluation%20of%20the%20Individual%20Training%20 Account-Eligible%20Training%20Provider%20Demonstration%20Final%20Interim%20Report.pdf . CareerOneStop, “Workforce Development Board Finder,” https://www.careeronestop.org/LocalHelp/WorkforceDevelopment/ 61. . find-workforce-development-boards.aspx Programs registered under the National Apprenticeship Act are exempt from reporting and application requirements. The law 62. also exempts providers of on-the-job training and similar transitional employment opportunities (e.g., internships) from the above requirements, but state governments may require these programs to submit separate performance information. US Department of Labor, “Advisory: Training and Employment Guidance Letter WIOA No. 41-14,” June 26, 2015, https://wdr.doleta.gov/directives/attach/ TEGL/TEGL_41-14_Acc.pdf . US Department of Labor, “Training and Employment Guidance Letter WIOA No. 41-14.” 63. WIOA does not offer any loan programs. The only aid it offers is in the form of grants that do not have to be repaid. See Timothy 64. Williams, “Seeking New Start, Finding Steep Cost,” New York Times , August 17, 2014, https://www.nytimes.com/2014/08/18/us/ workforce-investment-act-leaves-many-jobless-and-in-debt.html . 65. Carnevale, Strohl, and Gulish, “College Is Just the Beginning.” 66. US Department of Education, Federal Student Aid, https://studentaid.ed.gov/sa/; and David H. Bradley, “The Workforce Innova - tion and Opportunity Act and the One-Stop Delivery System,” Congressional Research Service, October 27, 2015, https://fas.org/sgp/ crs/misc/R44252.pdf. Jillian Berman, “America’s Growing Student Loan Debt Crisis,” MarketWatch, January 19, 2016, www.marketwatch.com/story/ 67. americas-growing-student-loan-debt-crisis-2016-01-15 . Eberts, “Individual Training Accounts Provided Under the U.S. Workforce Investment Act.” 68. 69. For example, in Georgia, initial eligibility requirements for training providers require tracking data for all students in a program. For more information, see Georgia Department of Economic Development, “WIOA Training Provider Initial and Continuing Eligibility Determination Provisions,” September 2015, http://www.georgia.org/wp-content/uploads/2015/09/Combined-Initial-and-Continued- Eligibility.pdf. 70. US Government Accountability Office, “Workforce Investment Act: Strategies Needed to Improve Certain Training Outcomes Data,” January 2014, www.gao.gov/products/GAO-14-137. 71. Ronald D’Amico and Jeffrey Salzman, “An Evaluation of the Individual Training Account/Eligible Training Provider Demonstra - tion,” Social Policy Research Associates, December 2004, . www.doleta.gov/reports/searcheta/occ/papers/Final_ITA_Demo_Report.pdf 72. Eberts, “Individual Training Accounts Provided Under the U.S. Workforce Investment Act.” 73. Eberts, “Individual Training Accounts Provided Under the U.S. Workforce Investment Act.” 74. Social Policy Research Associates, “PY 2015 WIASRD Data Book,” Table II-15; and US Department of Labor, “PY 2015 WIASRD Data Book,” July 13, 2017, www.doleta.gov/performance/results/WIASRD/PY2015/PY_2015_WIASRD_Data_Book_13July2017.docx . 75. Authors’ calculations from US Department of Labor, “National Summary of Annual Performance Data, 2015,” Table M, www. doleta.gov/performance/results/AnnualReports/annual_report_15.cfm ; and US Department of Labor, “WIA State Annual Reports and Summaries,” www.doleta.gov/performance/results/WIASRD_state_data_archive.cfm . US Department of Agriculture et al., “Aligning Federal Supports and Program Delivery for College Access and Completion,” 76. 26

28 IMPROVING SKILLS THROUGH AMERICA’S WORKFORCE DEVELOPMENT SYSTEM BAUMAN AND CHRISTENSEN November 15, 2016, www2.ed.gov/documents/press-releases/federal-supports-college-access-completion.pdf. Amy Kracker Selzer and Lauren Eyster, “How States Manage Eligible Training Provider Lists: Findings from a State Survey,” US 77. Department of Labor, Employment and Training Administration, June 2, 2015, https://wdr.doleta.gov/research/FullText_Documents/ ETAOP-2017-10%20EPTL%20Report%20%28Accessible%20PDF%29.pdf. © 2018 by the American Enterprise Institute. All rights reserved. The American Enterprise Institute (AEI) is a nonpartisan, nonprofit, 501(c)(3) educational organization and does not take institutional positions on any issues. The views expressed here are those of the author(s). 27

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