© Copyright 2005 by the Wyoming Department of Employment, Research & Planning

Is Wyoming's Workforce Development Training Fund Helping the State Retain Labor?

by: Mark A. Harris, Ph.D., Sociologist, and Douglas W. Leonard, Research Analyst

Participants attached to firms utilizing the Wyoming Workforce Development Training Fund were more likely to have lower turnover and higher wages than other workers.

Wyoming’s Workforce Development Training Fund (WDTF) represents a significant expenditure on human capital development. Between inception in April 1998 and July 1, 2004, $5,573,110 had been spent from the WDTF on business training grants (G. Campagnaro, personal communication, February 17, 2005). An intended outcome of WDTF training is to provide support to Wyoming employers by making trained labor available. In order for the WDTF to be effective in this capacity, WDTF participants must remain active in Wyoming’s labor market. Withdrawal from work or working in another state means that Wyoming does not reap the benefits of training. This article summarizes firm characteristics (macro-level phenomena) among establishments by which trainees were employed as well as individual (micro-level) outcomes experienced by participants.

Identifying the employment context of program participants helps researchers and policy makers better interpret individual-level outcomes. For example, an analysis of individual-level labor market outcomes of program completers may indicate that participants largely fail to retain employment in the state. One may conclude from this that training was ineffective for retaining employment and should be altered or terminated. Additional macro-level analysis may reveal, however, that for whatever reason trainees were employed in firms that were themselves unstable (e.g., characteristically high turnover, firms going out of business). In such a case, the inability to retain employment in the state may be more closely related to the instability of firms rather than the failure of training to imbue skills in individual trainees. A redirection of training recipients into more stable firms rather than modification or abandonment of the training program may increase worker retention in the state.

The WDTF went through a substantive rule change effective July 1, 2004 (Department of Workforce Services, 2004). This article examines firms and individual trainees who completed WDTF training contracts under prior rules. Additionally, the analysis reflects upon grants to a specific employer with intended employment for participants after training (i.e., referred to as Section 2 grants; Department of Workforce Services, 2004, p. 1-1) as opposed to training in high demand occupations (referred to as Section 3 grants; Department of Workforce Services, 2004, p. 1-4) not tied to a specific employer (e.g., training provided by a community college).

Data and Methodology

Firm-level research results were based on all employers who received funds from the WDTF at any time prior to the end of third quarter 2003 (2003Q3) and appeared in the Wage Records database in that quarter (2003Q3). 

The individual-level statistical control group analysis was based on the 1,706 participants associated with WDTF employer contracts ending during Fiscal Year 1999 (FY1999; July 1, 1999 to July 30, 2000) to FY2002 and 381,621 non-participants randomly assigned to an ending year during the same time period. Some of the 1,706 individuals appeared in multiple WDTF employer contracts. When this occurred, data from the most recent employer contract were utilized. A number of participants and non-participants were excluded from the control group portion of the analysis because they did not meet pre-defined eligibility criteria. 

Control group methodologies (Glover, 2002; Harris, 2002; Jones, 2004) show whether the labor market outcome experienced by program participants also occurred for matched individuals who did not receive training. If matched individuals had the same outcome as participants, training (or factors associated with training) did not cause the labor market outcome in question (i.e., retention in Wyoming’s labor market in this case). Instead, the outcome was caused by some other factor (e.g., a strong economy related to a boom in oil and gas drilling).

Employment is defined as individuals who worked at any time during 2003Q3, which includes job switching and multiple job holding. The primarily working designation is determined by the state that paid the most wages to workers during the fiscal year (e.g., Steve worked in Wyoming and Colorado in FY1999, but was paid more in Wyoming, so he was assigned as primarily working in Wyoming). Industry classifications were assigned using the North American Industry Classification System (NAICS) codes (Office of Management and Budget, 2002). 

Data for this analysis came from: (a) WDTF programmatic data provided by the Department of Workforce Services; (b) historical Unemployment Insurance (UI) Wage Records data maintained by the Department of Employment, Research & Planning (R&P) which includes Memoranda of Understanding (MOU) based interstate wage records information from Colorado, Idaho, Montana, Nebraska, New Mexico, Oklahoma, South Dakota, Texas, and Utah (see Map); (c) Wyoming Department of Transportation Driver’s License data; and (d) data from the Quarterly Census of Employment and Wages (QCEW; Brennan, 2003; U.S. Department of Labor, 2003).

Data from the QCEW and Unemployment Insurance (UI) mainframe programs were used to visually inspect the UI account numbers provided in the WDTF database (Wyoming Department of Workforce Services, 2004), as some difficulty arose in the matching process due to incorrect account numbers. The information contained in this article does not describe a causal relationship between any employer descriptive attributes (e.g., turnover) and program utilization. 

Readers may access additional detailed information, including more complete Methodology in the full report, Occasional Paper No. 3: Workforce Development Training Fund Evaluation at the Macro and Micro Levels (Harris & Leonard, 2005). 

Results of Individual Matched Control Groups

For all cohorts taken together, 75.8 percent of WDTF participants were working in Wyoming during the second year after training in comparison to 39.9 percent of non-participants (see Figure 1), representing a 35.9 percentage point difference. Across the four separate cohorts, percentage point differences between participants and non-participants working in Wyoming range from 21.5 to 45.8. Among those who were not primarily working in Wyoming during the second year after training, more were not working than were primarily working in an MOU state. For WDTF participants, typically less than 10 percent of a cohort was working in an MOU state during the second year after training. Substantially more non-participants than participants were not working either in Wyoming or an MOU State. Percentage point differences here range from 17.9 to 38.9.

Figure 2 shows results for the control group analysis. The selection process in this analysis was inherently more likely to select resident workers with a more stable work history (i.e., individuals with known age and gender who worked in Wyoming for at least two quarters prior to training). As expected, therefore, a higher percentage of selected participant and control group members worked in Wyoming in comparison to all participants and non-participants (compare Figures 1 and 2). The percentage point differences for those working in Wyoming between Figures 1 and 2 are much larger for non-participants than participants. 

Selected WDTF participants were more likely to work in Wyoming two years after training than control group members (81.3% compared to 62.9% when examining all cohorts together, see Figure 2). Percentage point differences across the four cohorts range from 9.5 to 26.2. For all cohorts, 12.2 percent of selected participants and 22.4 percent of control group members were primarily working in an MOU state. Even fewer selected participants and control group members were not working in Wyoming or an MOU state (6.5% and 14.7%, respectively).

Results of Firm-Level Descriptive Analysis

Figure 3 displays the distribution of WDTF and all Wyoming employers in 2003Q3. The chart indicates that the proportions of WDTF participating employers in Health Care & Social Assistance (18.2%), Manufacturing (11.8%), and Retail Trade (15.2%) were considerably higher than the statewide distribution of employers (7.3%, 3.3%, and 12.2%, respectively). Conversely, industries where the opposite was true included Natural Resources & Mining, Construction, Leisure & Hospitality, and Other Services.

Turnover rates were considerably lower for workers in WDTF firms than for workers statewide (see Figure 4). The overall turnover rate for WDTF employers was 14.9 percent, compared to the turnover rate for workers statewide of 25.5 percent. The differences in turnover rates were particularly large in Natural Resources & Mining (18.3% compared to 6.8%), and Professional & Business Services (35.5% compared to 18.4%). In three industries, Information (17.7% compared to 16.1%), Education Services (30.8% compared to 12.9%), and Other Services (30.7% compared to 20.1%), turnover rates were higher for WDTF employers than for employers statewide.

WDTF employers paid their workers 46.0 percent more than employers statewide (see Figure 5, All Industries). While the differences in wages paid between WDTF participating and non-participating firms was smaller in Construction, Manufacturing, Financial Activities, and Health Care, substantial differences were observed in Natural Resources & Mining and Professional & Business Services. 

Conclusions

Individual results indicate that WDTF participants were retained in Wyoming at rates higher than non-participants. Participants do not appear to be leaving and taking their skills to other states at rates higher than non-participants. These differences were not removed or accounted for when utilizing control group comparisons. Matched control group members were more likely to be found working in an MOU state or not working at all than participants. As such, it would appear that the WDTF program is working to retain labor in the state. Firm-level analysis correlates the results shown with individual participants. Participants attached to firms utilizing the WDTF were more likely to have higher retention and wages than other workers. The stability of firms within which WDTF participants were trained and employed likely contributes to their higher rates of retention in the state (e.g., a macro explanation of a micro phenomena).

Future Research

This research does not cover WDTF Section 3 Pre-employment Grants (Department of Workforce Services, 2004, pp. 1-4). Pre-employment trainees receive training in high demand occupations not tied to a specific employer with no guaranteed job at the end of training. Control group analyses would be useful in determining wage and retention outcomes among these participants. In addition to further analyses of individuals using matched control groups, the same methodology could theoretically be applied to employers. In treating the employer as an “individual” it may be possible to determine whether or not employer participation in the WDTF impacts their descriptive traits not only for the variables used in the current analysis, but also for variables such as business survival rates. Another alternative would be to evaluate the characteristics of firms associated with control group members in comparison firms associated with selected participants.

References

Brennan, N. (2003). [Quarterly Census of Employment and Wages]. Unpublished raw data.

Glover, T. (2002, June). Compared to what? The purpose and method of control group selection. Wyoming Labor Force Trends. Retrieved February 11, 2005, from http://doe.state.wy.us/LMI/0602/a2.htm 

Harris, M. A. (2002, June). Measuring the impact of Wyoming’s workforce development training fund: Part two. Wyoming Labor Force Trends. Retrieved February 11, 2005, from http://doe.state.wy.us/LMI/0602/a1.htm 

Harris, M. A., & Leonard, D. W. (2005, May). Occasional Paper No. 3: Workforce Development Training Fund Evaluation at the Macro and Micro Levels. Casper: WY: Wyoming Department of Employment, Research & Planning.

Jones, S. (2004, April). Examining Workforce Information Act programmatic outcomes using the Wyoming wage records universe as a statistical comparison group. Wyoming Labor Force Trends. Retrieved March 3, 2005, from: http://doe.state.wy.us/LMI/0404/a1.htm

Office of Management and Budget. (2002). North American Industry Classification System. (PB2002-101430). Springfield, VA: National Technical Information Service.

U.S. Department of Labor, Bureau of Labor Statistics. (2003, December). Quarterly Census of Employment and Wages (ES-202) Program. Retrieved February 2, 2005, from http://www.bls.gov/cew/cewover.htm

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