Do Employment and Training Programs Help Young Adults Attain Labor Market Success?: Event History Analysis

Background and Purpose

This study aims to examine the effectiveness of employment and training (E&T) programs on young adults’ employment outcomes, focusing on entry into employment and quality jobs. Historically, young workers experience higher unemployment and less job stability than prime-aged workers. The major difficulty that they encounter is a lack of job-related skills, experience, and education that employers are seeking. Recognizing that, scholars have emphasized the provision of E&T programs designed to help workers build job skills, find a job, and promote economic security. Particularly since the Great Recession, there was a consensus that high and persistent unemployment is partially derived from a structural problem, and E&T programs became more important than before as a solution to reduce unemployment. While much research has examined the effectiveness of E&T programs, little is known about how effectively E&T programs works for this population at the national level after the recent recession.

Methods

This study uses the 2008 panel of Survey of Income and Program Participation. The sample includes young adults aged between 18 and 24, who have experienced unemployment between 2008 and 2013 (n=3,003). The independent variable, participation in E&T programs, is measured by attending any of the following programs during unemployment: job readiness, job search, job training, basic reading, and work experience program. The dependent variables include entry into employment and quality of jobs (i.e., full-time employment, job with employer-provided health insurance, wage level). Based on monthly labor force status, the study creates individual unemployment spell and employs discrete-time multinomial logit model to examine the impact of E&T programs on entry into employment, given that people can also exit out of labor force from unemployment. Quality jobs are estimated by using logistic and OLS regressions. Individual and family characteristics and local economic conditions are included as control variables.

Results

Descriptive results from unemployment spell data show that of 3,003 young adults, 1,652(55%) enter into employment, 1,113(37%) exit out of labor force, and 238(8%) remain in unemployment; 290(10%) attended in E&T programs during their unemployment spell. Inferential analyses reveal that participating in E&T programs decreases a risk of entering into employment (relative risk ratio(rrr)=.782, p <.01), while is not associated with getting a quality job. It also found that participating in E&T programs decreases a risk of getting out of the labor market (rrr=.721, p<.01). Longer duration of unemployment is associated with a decreased risk of entering into employment (rrr =.523, p<.01).

Conclusion and Implications

Receiving E&T programs during unemployment negatively affects entrying into employment for young adults. Since many program participants received human capital development services emphasizing long-term skill building, it is plausible that short-term outcomes such as quick job placement might not be captured in this study. However, considering the null effects on getting quality jobs, E&T programs might be inappropriate or inadequate to help young adults succeed in the labor market. Study findings suggest addressing not only the program’s long-term effects including subsequent job stability but also other barriers that impede the benefits of the programs.