New Report Focuses on Effectiveness of U.S. Workforce System

A bipartisan group of researchers and analysts convened by the American Enterprise Institute, the Brookings Institution, and the Harvard Kennedy School’s Project on Workforce, called the Workforce Futures Initiative (WFI), has recently concluded a two-year review of the effectiveness of the United States’ federal-state workforce education and training system. The group found that while federal spending on workforce development, including the Workforce Innovation and Opportunity Act (WIOA) system, does improve disadvantaged worker outcomes, improvements are quite modest. The group suggests that this is due to a policy catch-22 where small benefits at low levels of funding discourage higher levels of investment, yet without additional funding, substantial improvement is unlikely.

To address this issue, the WFI recommends greater public investment in workforce development programs, targeted towards programs and practices that have proven successful and can be scaled, or that provide information critical to diagnosing the needs of a rapidly changing labor market. Examples include sectoral employment programs, job counseling and supportive services, improvements to data systems to better track program performance and improve our understanding of changing skill demands, and pilot programs to test ways of increasing system flexibility and innovation.

Sectoral employment programs, in particular, were found to substantially improve employment and wage outcomes for workers. These programs focus on high-growth sectors of the economy such as information technology, healthcare, and advanced manufacturing. The group recommends that the federal government substantially increase investment in these programs, focusing on replication and scaling of programs with track records of success. For the most disadvantaged students and workers, who sometimes have difficulty qualifying for participation in these programs, additional supports and “on-ramp” programs should be considered.

The group also suggests strengthening the “connective tissue” of supportive services. Education, training, and employment systems are decentralized, and the overwhelming array of options can overwhelm workers who are juggling busy lives on top of their training needs. Barriers related to transportation, child care, and mental health often cause program participants to exit programs early. The evidence shows that counseling and supportive services, both of which are integral to the sectoral strategies mentioned above, substantially increase program completion and labor market success. Investments in support services for post-secondary training participants such as community college students and displaced workers can yield high returns.

A critical need is innovation in the nation’s workforce data infrastructure. Workers are pressured by technological change and automation, which makes it critical to modernize our education and training systems to keep up with change. We need better information about which jobs are growing and which programs are effective at developing needed skills. Decentralizing regional labor market information systems can help states and regions develop deep and agile data systems for measuring program performance as well as changing skill and employment needs.

Finally, the evidence of “what works” in training and workforce development programs is remarkably sparse. The group suggests that even if political will existed for a full-scale, far-reaching reform of WIOA, community colleges, and other elements of our workforce system, it would be imprudent, based on what we know, to recommend a one-size-fits-all model for all regions and priority industries. Therefore, the group recommends strategies that unleash innovation at the state and regional levels and among industries. Part of the answer to this challenge is providing state and local officials substantial flexibility in testing new program structures and models that bridge public, private, and nonprofit institutions; are responsive to fast-changing demand patterns; and meet the differing needs of populations ranging from English language learners to working adults to the formerly incarcerated. Such experiments deserve more financial and implementation support from the federal government, opportunities for administrative flexibility, and comprehensive evaluation to help inform future rounds of system reform.

In conclusion, the WFI recommends greater public investment in workforce development programs, targeted towards successful programs and practices.

Full Report Here