Life-Course Labor Market Effects of Government-Sponsored Job Skills Training Programs on U.S. Baby Boomers Facing Economic Disadvantages: A Propensity Score Analysis

Background/Purpose: Limited job skills among Americans living in poverty are major impediments to their labor market participation and economic self-sufficiency. Adverse life conditions often prevent these individuals from gaining sufficient education and training opportunities early in life. In recent years, government-sponsored, mandatory welfare-to-work programs have been the primary avenues for increasing education and job skills. However, these programs generally do not offer sufficient opportunities to gain the knowledge and job skills needed to obtain well-paying jobs. Instead, most program participants receive only basic services (e.g., adult basic education, GED preparation, and job search). As low-skilled, modest-paying jobs (e.g., in manufacturing) have largely disappeared, examining the effectiveness of programs intended to promote employability and economic self-sufficiency among working-aged Americans facing economic disadvantages is essential. To assist policymakers in making better-informed decisions about government-sponsored employment programs, we conducted a longitudinal study comparing the effects of job skills programs and basic service programs.

Method: Data came from the National Longitudinal Survey of Youth 1979 (NLSY79), a population-based longitudinal study of Americans born between 1957 and 1964. Of 12,686 NLSY79 respondents, 1,496 reported participating in government-sponsored employment programs between 1980 and 1986. Labor market outcomes (employment status and annual earnings [adjusted in 2018 dollars]) were retrieved from multiple waves at approximately four-to-six year intervals from 1987 to 2014. Statistical analyses were conducted in two phases. To address potential selection into the treatment (i.e., job skills training) vs comparison (basic services) group, inverse propensity score weighting was used to balance covariate distributions between treatment and comparison groups based on 36 baseline individual and family characteristics. Then, annual employment status and earnings trajectories were separately estimated using inverse propensity scores weighting while including the treatment indicator as a regressor.

Results: Compared to participants who received basic services only, job skills training participants were more likely to become employed and earned higher wages over the three decades after program participation. Among job skills training participants, the largest employment gains relative to the comparison group were found among Black women (5.9% in year 1 to 9.0% in year 33) while the gains were smallest among White men (1.6% in year 1 to 4.0% in year 33). Regarding average annual earnings, job skills training is predicted to increase earnings by up to 69.6% compared to what participants would have earned if they received basic services only.

Conclusions and Implications: Findings suggest that employment and earnings gains from job skills training are significant and persisted over three decades among government-sponsored employment program participants. However, only one fourth of baby-boomers who participated in government-sponsored employment programs received job skills training services while the rest received basic services only. Our study testifies to the need for job skills training for Americans facing economic disadvantages to promote employability and economic self-sufficiency over the life course.