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within the U.S. Department of Labor in order to generate more employer use of apprenticeship training would only require about $20 million.

How might these and other education and training efforts be financed? Expansions of Pell grants would be an important first step. Currently, Pell grants cover occupational training at accredited colleges only for disadvantaged workers attending at least half-time and without any felony convictions. One approach would be to allow Pell grants to extend to shorter term training programs and to finance the classroom instruction used in registered apprenticeship programs. Another option is to use federal funds from the Temporary Assistance for Needy Families (TANF) to finance training, an approach that may require changes in how occupational training counts towards the TANF program’s work requirements.

Expanded funding for Title I of the Workforce Investment Act is another way to help finance these programs for disadvantaged adults. This expanded funding could be accomplished through formula funding or through a new competitive grants program like the one outlined in a recent report by Harry Holzer for the Hamilton Project at Brookings. In this proposal, grants would be awarded to states to build comprehensive “advancement systems” for the poor that focus on education and training, pathways that link private employers to training providers and workers, and appropriate financial supports and services. The grants would match new state and local expenditures and require a great deal of rigorous evaluation. Financial incentives would also be provided for strong performance and for taking programs to scale at the state level (that is, making them large enough to affect earnings outcomes of a substantial share of workers). Whatever exact paths are taken, the labor market data reviewed here suggest that demand for workers in the middle of the skill distribution will remain quite strong for the foreseeable future, and that policies designed to train more disadvantaged youth and adults for these jobs are a good bet.

is a Professor of Public Policy at Georgetown University and a Senior Fellow at the Urban Institute in Washington D.C.

is a Senior Fellow at the Urban Institute and Professor of Economics at American University. His work focuses on how education, employment, and family structure work together to affect economic well-being.

We thank the Joyce Foundation and the Brookings Institution for financial support, and Ron Haskins for helpful suggestions.

Aspen Institute Domestic Strategy Group, “Grow Faster Together or Grow Slowly Apart: How Will America Work in the 21st Century?,” (Washington, D.C.: Author, 2002).

David Autor, Lawrence Katz and Melissa Kearney, “The Polarization of the U.S. Labor Market,” (Working Paper, National Bureau of Economic Research, Cambridge, MA, 2006).

George Borjas, “Immigration Policy and Human Capital,” in , eds. Harry Holzer and Demetra Nightingale (Washington D.C.: Urban Institute Press, 2007).

David Ellwood, “The Sputtering 21st Century Workforce: Can Social Policy Help?” in , eds. Alan Krueger and Robert Solow (New York: Russell Sage Foundation, 2001).

Harry Holzer, “Better Workers for Better Jobs: Improving Worker Advancement in the Low-Wage Labor Market,” The Hamilton Project, Brookings Institution (December 2007).


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