Absence of conflict of interest.
Citation
Aviles, G., Bordelon, C., Greenwell, A., Pham, L., Sinkler, A., & Stromsdorfer, E. (2015). Net impact study on annual earnings for the training benefits program 2002-2012. Olympia, WA: Washington State Employment Security Department
Highlights
- The study’s objective was to evaluate the impact and cost-benefit of the Training Benefits program on participants’ employment, earnings, and unemployment benefits.
- The study used a nonexperimental design to compare the outcomes of individuals who participated in the program with those who did not, based on data from the Washington Employment Security Department. Using several demographic characteristics, the authors created a matched comparison group to test the impact of the program on time employed, annual earnings, and receipt of unemployment benefits.
- The study found that program participation was associated with a decrease in employment and earnings in early follow up years, but an increase in employment and earnings in later years. However, the study did not include tests of statistical significance.
- The quality of causal evidence provided in this study is moderate because it is based on a well-implemented non-experimental design. This means we are somewhat confident that the estimated effects are attributable to the Training Benefits program, but other factors might have also contributed.
Intervention Examined
Training Benefits (TB) Program
Features of the Intervention
The Training Benefit (TB) program was created in 2000 as part of the Washington State Legislature's Substitute House Bill 3077, which authorized up to $20 million per year from the Unemployment Insurance Trust Fund for the program. The program was designed to provide training for individuals who qualify for unemployment benefits, and who had skills that were declining in the labor market. The program offered training for a new job that was in high demand in the labor market. In 2002, the program was updated to include those who had exhausted benefit eligibility, specifically in the fields of aerospace, forest product, and fishing. In 2009, the program was expanded to further include US military veterans, active state National Guard members, individuals with mental/physical disabilities, and low-income individuals. The program was also expanded in 2011 to remove the requirement that claimants demonstrate long-term attachment to the workforce.
TB program participants enroll in a training for a high-demand occupation, provided from a list that the Employment Security division includes annually, that is also reviewed by local workforce development councils. Participants in the program receive 52 weeks of unemployment benefits, which includes 26 weeks of regular benefits and 26 weeks of benefits through a TB trust fund. However, through 2009, participants could receive TB for up to two years after the end of the Unemployment Insurance (UI) claim year. Participants are not required to job search while they are enrolled full-time in a training program and making satisfactory progress. Costs associated with training are not supported by the program (e.g., tuition, books, tools, supplies and transportation).
Features of the Study
The study was a nonexperimental design where the authors used propensity score matching to create a comparison group of unemployment insurance (UI) claimants that were statistically similar to TB participants. The authors used three data sources from the Washington Employment Security Department (ESD) Data Warehouse for demographic and outcome information: the UI benefits database; the covered employee wage database; and the UI employer database. TB participants and matched non-participants were grouped into calendar year cohorts, and analyses were conducted with all cohorts combined and at the cohort level. Using multivariate regression, authors tested the impact of the TB program on the percent of time employed, earnings and unemployment benefits received. However, the study authors did not include statistical tests to assess differences in participants’ employment, earnings, and unemployment benefits. Participants were summed across 11 cohorts to include 21,033 TB participants from January 1, 2002 through December 31, 2012. The comparison group included 21,033 matched non-participants.
Findings
Employment
- The study found that program participants experienced a decrease in the percent time employed in the first 3 follow up years; however, they experienced an increase in employment in year 5.
Earnings
- The study found that program participants had a decrease in earnings for follow-up year 1 through 6 and had an increase in earnings for year 7 through 11.
Public benefit receipt
- The study found that program participants had higher net unemployment insurance benefit levels years 1 to 3, and lower benefits from years 4 through 11.
Considerations for Interpreting the Findings
For the current study, changes were made to the TB program eligibility in the middle of the data period used for analysis. These changes opened the program to a wider range of UI claimants, thus changing the group composition. Therefore, the TB program training may have affected participants differently from those approved prior to April 2009 to those approved after April 2009.
Causal Evidence Rating
The quality of causal evidence presented in this report is moderate, because it is based on a well-implemented non-experimental design. This means that we are confident that the estimated effects are somewhat attributable to the TB training program and not to other factors.