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The purpose of this paper is to reflect on the results, methodology, and processes used in a series of net labor market impact studies done for the State of Washington over the past six years. All of the studies relied on administrative data and used a technique referred to as quasi- experimental evaluation. The program interventions were the federal- and state-funded workforce development programs. The paper sets out eight reflections for analysts and policy makers to consider. These reflections identify lessons learned and uncertainties or issues that need more consideration and scrutiny.

This paper addresses the question of whether administrative data that are collected for performance monitoring purposes can be used for program evaluation. It argues that under certain circumstances, such data can be used. In particular, data from the state of Washington are used to examine the effectiveness of services provided to adults under the Workforce Investment Act (WIA). The general theme of an emerging literature on techniques for nonexperimental evaluations of social programs is that many different techniques have appropriate asymptotic properties. A contribution of this paper is to examine the sensitivity of net impact estimators to various estimation techniques. Virtually all of the techniques yielded estimates of positive labor market impacts for both men and women. Men had earnings gains on the order of 10 percent that resulted mainly from increased employment rates. Women had larger estimated earnings gains-on the order of 20 to 25 percent-that emanated from increased employment and increased wages or hours. A second purpose of the paper was to provide principles that policymakers and program administrators should apply when considering evaluation results.

Many individuals are grappling with the issue of whether to provide workers with training that upgrades the workers' basic academic skills. The corollary questions that flow from this issue are how to provide the training, how much training should be provided, and who should pay for the training. Workers are interested in this issue because they want to sustain productive, well-paying careers that will support adequate standards of living. Not receiving training may jeopardize their careers and earning power. Employers are interested in this issue because their economic role is to maximize corporate profits for stockholders. In most companies, worker productivity is the most important factor in determining output levels and profitability. Public policy makers are interested in the issue because if productive workers lose their jobs, the public may end up supporting them through income maintenance payments and financing job searches through the employment service. On the other hand, if basic skills-deficient workers get training and keep their jobs, they will continue to pay taxes that support government activities. Educators are interested in the issue because they want to improve the educational system to reduce future basic skill deficiencies and because they may be involved in the upgrading of current workers. The question that is at the core of this issue is easy to state. What should an employer do about a factor of production, be it physical capital such as a plant or machine or be it human capital, that has become unprofitable? For human capital, that is, skills and knowledge, the lack of profitability may stem from the fact that the worker's basic skills were never adequate or it may be the case that technology or workplace demands have surpassed the worker's skill levels. For both physical and human capital, the choices that employers face are limited. They can invest in upgrading the factor of production; they can continue to employ the factor and bear the losses; (Note: I am using the economic cost concept of opportunity costs. A basic skills deficient worker may be paid $8.00 an hour and be productive enough to produce $8.50 worth of product per hour. However, a trained employee or a younger employee may be willing to work for $8.00 an hour and be able to produce $10.00 worth of product. The opportunity cost of not training the worker would be $1.50 per hour even though the firm would not be losing money on the worker.) or they can replace the factor. From an economic and business management theoretical point of view, the answer is easy. Employers should choose the option that maximizes their rate of return. That is, they should choose the option where the difference between the (discounted) future benefits and the costs is the greatest. From a practical point of view, estimating the benefits and costs may be extremely difficult. Furthermore, it is undoubtedly the case that the best option will differ for different situations. There may be cases in which employers would reap large returns from modest investments in workplace literacy training. On the other hand, there may be cases in which employers would be better off by accepting the turnover and hiring costs of replacing workers. In short, it is impossible a priori to prove that it is to a firm's advantage to provide workplace literacy training. It, too, is impossible to prove a priori that it is to a firm's advantage to shed workers with basic skills deficiencies. From a public policy point of view, it should be recognized that society may benefit or bear costs from employers' decisions about inefficient or outmoded factors of production. Thus it may be the case that from a firm's profit-maximizing perspective, it is not advantageous to provide workplace literacy training. But from the rest of society's perspective, provision of the training, is beneficial. In such cases, public policy should facilitate financial subsidies to firms. The purpose of this paper is to present these arguments theoretically to identify the key factors that influence the employer's and society's choices; to discuss some empirical evidence from earlier studies about the payoff to individuals and firms; and to provide policy recommendations.

This paper focuses on one of the potential benefits to improving the Nation's literacy the economic payoffs. A more literate workforce provides economic benefits to the members of the workforce themselves, to employers, and to society. Workers who improve their basic skills through participation in workplace literacy programs should be more productive and hence earn higher wages and have greater job security. Employers with more productive workers will be more competitive in their industries and will be more profitable. Society gains by having a more productive and stable economy, by having more individuals employed with higher earnings and thus paying more in taxes, and by having fewer individuals unemployed who would otherwise be drawing transfer income from the government. The key nexus in the argument that workplace literacy engenders significant economic benefits is that a more literate worker will be more productive on the job. Were that not the case, the economic benefits to workplace literacy programs would all but evaporate. Whereas literacy advocates would easily accept the notion that more literate workers are more productive, the evidence is far from clear. In fact, the status quo provides a strong counterargument. The business sector is characterized by a very low incidence of workplace literacy programs despite the fact that there is a substantial need, as measured by the percentage of the workforce who are deficient to some extent in basic skills (see Hollenbeck 1993). It can be legitimately asked why, if workplace literacy programs are so beneficial economically, is there such a paucity of programs? Why haven't more employers increased their profits by adopting such programs? This paper presents findings that suggest that there are substantial productivity payoffs to workplace literacy programs. The answer to the question as to why there is such a low incidence of programs is that there must be market failures such as inaccessible capital, lack of information, or uncertainty about costs or payoffs that are dampening more widescale adoption of programs. In the next section of the paper, I review prior literature on the economic payoffs to workplace literacy programs and suggest a model for determining their payoffs. The third section describes the data that I use to analyze the issue, which come from two national surveys of individuals. The fourth, fifth, and sixth sections of the paper present my empirical findings. In the fourth section, I analyze participation in workplace literacy programs the characteristics of the individuals who participate. The fifth section presents tabular analyses of program characteristics as reported by the participants and in the sixth section, I analyze the economic benefits to workers from participation. The final section presents conclusions.

The 1996 federal welfare reform legislation encourages quick employment over education and training for the nation's welfare recipients. However, some argue that a one-size-fits-all approach ignores the heterogeneity of this population. This article presents findings from a net impact evaluation of Ohio's JOBS Student Retention Program (JSRP), a program designed to facilitate success for public assistance recipients at 2-year community or technical colleges. The authors evaluate this policy using state administrative data sets. The analyses consist of unadjusted and regression-adjusted comparisons of means for the JSRP group and a constructed comparison group. Outcomes examined include program completion, employment, earnings, and welfare recipiency. Focusing on the most recent 11 of 16 quarters of data available, the average increase in quarterly earnings was 8.45% for program participants and 12.91% for program completers. The results indicate that encouraging postsecondary education for some welfare recipients will boost earnings capacity and therefore long-term self-sufficiency.

Microeconomic Simulation Models for Public Policy Analysis, Volume 1: Distributional Impacts is a collection of papers presented at a conference of the same title held in Washington, D.C. in March 1978. This collection discusses extended micro data models for first-round distributional analysis, models that incorporate behavioral responses to the policies being stimulated, models of macroeconomics, and models that have sectorial or regional impacts. One paper explains that increasing support for the negative income tax scheme can result in bigger increase in the budgetary cost of the program i

Microeconomic Simulation Models for Public Policy Analysis, Volume 2: Sectoral, Regional, and General Equilibrium Models is a collection of papers presented at a conference of the same title held in Washington, D.C. in March 1978. This volume deals with economic equilibrium models. This collection also discusses micro data models of the macroeconomy that include policy explorations concerning the transaction model of the American economy. One paper reviews the experiments with fiscal policy parameters from a micro to a macro model related to the Swedish economy: this model analyzes inflation a

This paper discusses the role of public policy in the skills development system of the U.S. It further examines the implications of that policy for the skill development and career progression of black workers. The paper describes the current "system" for skills development in the United States as a two-tiered system: The "first-chance" or conventional system allows individuals to proceed through an extensive public elementary, secondary, and postsecondary educational sector that is supplemented by private educational institutions and is followed by employer-provided job training and work experience. The "second-chance" system is designed for individuals who do not successfully traverse the first-chance system. The second-chance system includes public job training programs, public assistance, rehabilitation programs for offenders, and educational remediation. The public agency for labor market exchange, the Employment Service, has tended to play a significant role in facilitating employment in the second-chance system. Paradoxically, despite the tremendous success of the U.S. economy, including the fact that it has the world's leading level of worker productivity, there is a pervasive perception that the current system for skills development in the U.S. is failing. Lagging school achievement (particularly in urban areas), high unemployment rates for certain groups of the population, and employer concerns about the quality of entry level workers suggest that the current system may be neither efficient nor equitable. The paper starts out by considering the rationale for public policy intervention in the skills development process. It then reviews public policy at the federal, state, and local levels that fosters skills development. At the federal level, the major policy emphasis currently is the consolidation of job training and labor market exchange programs through the Workforce Investment Act (WIA). State and local entities administer federal programs, but many states have also enacted supplemental programs in the area of skills development. After examining specific federal and state/local policy, the paper reviews recent policy demonstrations in the area of skills development. The review of the evaluative evidence leads to several general "best practice" principles about content, delivery mechanisms, and administrative characteristics. The last section of the paper reviews how well federal WIA programs are likely to fare against the best practices criteria. The major thrusts in skills development policy have been accountability, market-driven choice, decentralization/devolution, emphasis on immediate work, private-sector leadership, and consolidation. The policy characteristics that are in disfavor seem to be eligibility set asides, process regulations, service delivery by administrative agencies, subsidized education and training, technical assistance, and research and development. African Americans, who reside disproportionately in urban areas and who participate in the second-chance system, will be affected by these changes in emphasis. Public policy has evolved from a top-down, centralized system with regulatory protections and emphasis on equal access to an open, decentralized system operated largely by state bureaucrats and governed by individuals at the local level who happen to take an interest and who happen to know the right individuals at the right time. Theoretical arguments can be made that the new system will be more efficient and more equitable and counterarguments can be offered that the system will result in outcomes that are highly varied across localities and racial groups. ; A revised version of this paper appears in Cecilia Conrad, ed. 2004. Building Skills for Black Workers: Preparing for the Future Labor Market. Washington, DC: Joint Center for Political and Economic Studies, Dallas: University Press of America, pp. 127-148.