Presented by Jared McEntaffer.
Abstract:
Many hope that training programs will help the unemployed find new employment opportunities but there is little evidence in support of this. Using administrative data gathered from 2003 to 2012 on unemployed job seekers in South Dakota, Nebraska, and Iowa I estimate how Workforce Investment Act training programs impact potential employment outcomes. Results show that training decreases the likelihood of unemployment and increases the probability of employment both one and three quarters after training. In the near term, on-the-job training is more effective than general training such as attending technical school or community college. On the job training cuts the probability of unemployment in half. General training reduces unemployment probability by twenty-two percent. Passive labor market programs such as Temporary Assistance for Needy Families and Trade Adjustment Assistance actually increase the likelihood of continued unemployment. I find clear and statistically significant evidence that training programs encourage reemployment whereas traditional passive welfare programs discourage reemployment.