The delivery of training resources in our proposal would provide recipients with flexibility to make choices about how best to utilize training funds. A lump sum amount of training resources—a voucher—will provide opportunity for workers with low skills to increase their basic skills and move into higher paying occupations.
A further component of our proposal is to accompany federal training resources with rigorous evaluation to determine what works and what does not work. One of the significant limitations of current training programs is the lack of continual evaluative research designed to identify programs that are most effective and to focus training resources on groups that stand to receive the greatest benefits from training. A key component of our proposal is for continual evaluation of training programs. We would require states to provide administrative data on training participants matched to data on unemployment insurance wage records, and comparable data on individuals receiving services at state employment security offices (job exchange services provided through Wagner‐Peyser legislation). These data efforts, along with increased budgetary resources to fund independent evaluation research using the administrative data, would help policymakers identify promising areas in which to expand training efforts (and programs that are not working and that should be reduced or eliminated).
A shortcoming in government spending on evaluation and in much of the economic literature on program evaluation is the focus on average cost‐benefit analysis. This provides information on how a program works for the average person, but it is often of more interest to gauge the marginal impact—the effect of a training dollar on the next person to utilize the scheme rather than on the average. Collecting increased data would allow an enhanced focus on marginal evaluation that would help guide the targeting of training resources going forward.
This paper highlights some of the labor market impacts of the recession, reviews the economic literature on training to identify the characteristics of people who are likely to most benefit from training, and then puts forward a training proposal to help these groups and an evaluation agenda.