When Does Training Pay Off? Challenging the Assumptions of the Workforce Investment Act

by: Tom Gallagher, Manager

"...graduates did not outperform comparison group earnings until nine to eighteen months after graduation, depending upon economic conditions. Measuring program performance only during the first two quarters after graduation misses the mark."

Should community college graduates expect to find work in their chosen field within the first six months after graduation? Based on the available data (see "Implementing the Workforce Investment Act..."), the answer is: “probably not.” In addition, the returns on investment in a two-year degree or certificate seem unlikely to appear until nine to eighteen months after graduation. Analysis of community college student data linked to Wage Records and data from employers who hire students indicates that Workforce Investment Act (WIA) Section 122(d) performance measures may not provide meaningful information about how the labor market works and how graduates use the market place. 

A central problem in the expenditure of public funds on education and training activities is that, unlike the private sector, where market signals provide evidence of a service’s effectiveness, outcome measures are obscured by time and a simple lack of information. The WIA remedy requires that in order for providers of educational and training services (e.g., community colleges, technical schools) to be eligible to receive WIA funds, they must make outcome measures publicly available. Section 122(d) specifies the training cost and performance information providers are to make public. Since enactment, the questions have been whether or not: (1) providers have the ability to produce this information, (2) the information is useful to consumers, and (3) consumers would receive comparable information from each provider.

Based on analysis of six years of data from a college linked to Wage Records and compared longitudinally to groups of people from the same geographic area and comparable age/gender characteristics, graduates did not outperform comparison group earnings until nine to eighteen months after graduation, depending upon economic conditions. Measuring program performance only during the first two quarters after graduation misses the mark. 

WIA specifies certain data elements that program providers must provide to the public: wage rates at the time of placement in employment and six months later, whether or not the job is unsubsidized, the rate of licensure, and placement in an occupation related to the training. A provider would need to know either which employers hired students or be able to identify where students could be contacted. Community colleges lack this knowledge. 

Even if colleges or other technical training providers had a means of identifying the employers of former students, generally they may not have the capacity to collect or analyze the pertinent information. Most of the items identified in Section 122(d) represent concepts from labor economics and require a certain level of survey research methods and statistical design knowledge to collect. Even if it were possible for providers to collect the information, there is no consistent or standardized framework for defining, compiling, accounting for missing data, computing and presenting the data to users. The value of consumer reports lies in their comparability.

In addition to national standards for development of performance information, we also need to engage in the analysis of how students use colleges, and identify the roles of colleges in the workforce development system. Based on this knowledge, we can develop realistic provider performance measures which more closely resemble true market signals.

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These pages designed by Gayle C. Edlin.
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