Citation
Hollenbeck, K., & Huang, W.-J. (2014). Net impact and benefit-cost estimates of the workforce development system in Washington state. (Upjohn Institute Technical Report No. 13-029). Retrieved from W.E. Upjohn Institute for Employment Research website: http://dx.doi.org/10.17848/tr13-029 [Private career school programs]
Highlights
- The study’s objective was to examine the impact of private career schools’ programs on the employment rate, earnings, and benefit receipt of adults who completed high school in Washington State.
- The authors used a nonexperimental method to compare short-term (3 quarters after program exit) and long-term (9 to 12 quarters after program exit) employment, earnings, and Unemployment Insurance benefits between those who took part in private career school programs with those who registered for services at the Labor Exchange Employment Services.
- The study found that, compared with those who registered for services at the Labor Exchange, participants in private career school programs had lower initial employment but higher long-term employment and earnings.
- The quality of causal evidence presented in this report is low because the authors did not ensure that the groups being compared were similar before program participation. This means we are not confident that the estimated effects are attributable to private career school programs; other factors are likely to have contributed.
- This study also examined the effectiveness of other workforce development programs. Please click here to find CLEAR profiles of those studies.
Intervention Examined
The Private Career School Programs
Features of the Intervention
Private career school programs train participants for specific occupations, including cosmetology, truck driving, and computer programming. Institutions that operate this program are privately operated and monitored by the Washington State Workforce Training and Education Coordinating Board.
Features of the Study
The authors collected Unemployment Insurance records for those who had exited private career school programs from July 2005 to June 2006 to estimate the long-term impacts of the program in quarters 9 to 12 after program exit. They also collected Unemployment Insurance records for those who exited from July 2007 to June 2008 to estimate the short-term impacts in the third quarter after program exit. In Washington State, there were 12,691 people who exited private career school programs in 2005–2006 and 11,269 who exited in 2007–2008. The authors used a nonexperimental statistical approach called propensity-score matching to create a comparison group of people who registered for services at the Labor Exchange and were similar to the private career school programs group in terms of demographic characteristics, including gender, age, educational attainment, race, employment, and program participation history. The authors used a difference-in-differences model to compare the two groups on employment, hourly wages, hours worked per quarter, quarterly earnings, and receipt of benefits before and after participation.
Findings
Employment
- The authors reported that the percentage of quarters employed decreased significantly by 2.7 percentage points in the third quarter after program exit but increased 3.4 percentage points in quarters 9 to 12 after exit for those who took part in the private career school programs compared with those who registered at the Labor Exchange. The treatment group significantly increased the number of hours worked by an average of 20 hours per quarter in the third quarter after exit and 25.5 hours in quarters 9 to 12 after exit relative to the comparison group.
Earnings and wages
- The authors reported that average quarterly earnings significantly increased for those who took part in private career school programs compared with those who registered at the Labor Exchange, with an average increase of $416 in the third quarter after exit and $394 9 to 12 quarters after program exit. The average hourly wage of the treatment group also significantly increased by an average of $0.91 in the third quarter after exit and $0.80 in quarters 9 to 12 after exit.
Public benefit receipt
- The authors reported that, compared with those who registered with the Labor Exchange, the receipt of benefits among private career school program participants significantly decreased by 3.2 percentage points in the third quarter and 4.4 percentage points in quarters 9 to 12 after program exit. The amount of benefits received was also significantly reduced by $85 in the third quarter and $49 in quarters 9 to 12 after exit for the private career school programs group compared to the Labor Exchange group.
Considerations for Interpreting the Findings
Although the authors accounted for many underlying characteristics of the groups being compared, which could also influence their outcomes, the authors’ decision to define the groups based on their date of program exit rather than program entry is problematic. For example, suppose that the private career school program and Labor Exchange participants were on identical wage trajectories before receiving services from their respective programs, and that the average length of participation in the private career school program was six months, whereas that for Labor Exchange was one month. At the conclusion of participation, they exited the program.
If we compared the groups’ earnings 6 months after their recorded exit dates, we would observe private career school participants’ earnings about 12 months after they started receiving services and Labor Exchange participants’ earnings about 7 months after they started receiving services. If both programs were completely ineffective and everyone stayed on their original upward-sloping wage trajectory, it would appear as though the private career school participants earned more 6 months after their exit dates. However, this would not be attributable to receiving private career school classes; it would be caused by the different elapsed time across the groups (12 months for private career school participants versus 7 months for Labor Exchange participants). Therefore, studies defining the groups based on exit date, rather than entry date, cannot receive a moderate causal evidence rating.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the authors did not ensure that the groups being compared were similar before program participation. This means we are not confident that the estimated effects are attributable to private career school programs; other factors are likely to have contributed.