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The World Bank Research Observer, vol. 13, no. 1 (February 1998), pp. 79–101© 1998 The International Bank for Reconstruction and Development / THE WORLD BANK 79

Evaluating Retraining Programsin OECD Countries: Lessons Learned

Amit Dar • Indermit S. Gill

Are retraining programs for the unemployed more effective than job search assistance?Governments of the member countries of the Organisation for Economic Co-operationand Development have considerable experience with retraining programs in a variety ofindustrial settings. Evaluations of these programs show that the results are disappointing,however. This article discusses the factors associated with retraining programs for twotypes of workers: those laid off en masse and the long-term unemployed. Evaluations indi-cate poor results for both groups: retraining programs are generally no more effective thanjob search assistance in increasing either reemployment probabilities or postinterventionearnings, and they are between two and four times more expensive than job searchassistance.

Industrial countries spend sizable amounts on labor programs for the unemployed.In 1992 member countries of the Organisation for Economic Co-operation andDevelopment (OECD) spent between 0.1 percent (Japan) and 2.6 percent (Sweden)of gross domestic product on labor programs. In several countries this training is“the largest category of active programs, and is often perceived as the principal alter-native to regular unemployment benefits” (OECD 1994a). Countries in EasternEurope—where the role of active labor programs is a topic of current debate—alsospent between 0.2 and 3 percent of gross domestic product on these programs (OECD

1994a). Yet possibly because such assistance is viewed almost as a fundamental rightin Western Europe, these programs are rarely evaluated outside the United States.This article surveys evaluations of retraining programs in the OECD countries, high-lighting the shortcomings of such schemes and illustrating the payoff to investing inrigorous evaluations.

We examine only the evaluations of retraining programs, so our focus is largely onadults with previous work experience rather than on unemployed school-leavers. Wedistinguish here between retraining schemes for workers displaced by plant closures

The World Bank Research Observer, vol. 13, no. 1 (February 1998)80

or restructuring and programs aimed at the long-term unemployed. These groupsdiffer in important ways. First, the long-term unemployed are a relatively hetero-genous group of individuals compared with those laid off en masse from a singleplant or firm. Second, although some programs are targeted at specific regions, thelong-term unemployed are generally more dispersed geographically. Third, the du-ration of unemployment is, almost by definition, greater for the long-term unem-ployed. Finally, retraining programs for the long-term unemployed are generally amix of classroom and in-plant training, while programs for displaced workers areusually confined to the classroom.

Evaluation Techniques

Techniques for evaluating the effectiveness of retraining programs can be broadlyclassified into two categories: scientific and nonscientific. Scientific evaluations canbe further divided into experimental and quasi-experimental. Experimental, or clas-sically designed, evaluations require selecting “treatment” and “control” groups be-fore the intervention: the treatment group receives the assistance, and the controlgroup does not. If large numbers of individuals are randomly assigned to each group,the average characteristics of the two groups should not differ significantly, so anydifference in outcomes can be attributed to program participation. In quasi-experimental studies treatment and control groups are selected after the interven-tion. To compute the program’s effects, statistical techniques are used to correct fordifferences in characteristics between the two groups. Nonscientific techniques donot use control groups to evaluate the effect of interventions but instead rely onstatistics compiled by a program’s administrators. These evaluations are of little use;without a control group, it is difficult to attribute the success or failure of the partici-pants to the intervention, because the changes in individuals’ behavior might haveresulted from other factors, such as worker-specific attributes or economywide changes(Grossman 1994).

Classically Designed (Randomized) Experiments

This technique, which was originally developed to test drug effectiveness, identifiesand randomly assigns individuals to either a treatment or a control group before theintervention. Its main appeal lies in the simplicity of interpreting results—the effec-tiveness of the program is computed as the simple difference in the outcome betweenthe participants in the treatment group and the nonparticipants in the control group(Newman, Rawlings, and Gertler 1994). The main pitfalls of this method are a failureto select individuals through random assignment, changes in behavior as a result oftheir assignment to either group (for instance, enrolling in private programs or intensi-

Amit Dar and Indermit S. Gill 81

fying their job search), high costs because of the number of participants in the sample,and ethical questions about excluding a group of people from the intervention.

Although randomization is thought to eliminate selection bias in determiningwho will participate, proponents of this methodology make an important assump-tion: that random assignment does not alter the behavior that is being studied. Thismay not be the case and, in fact, the bias may be quite strong (Heckman 1992). Forexample, ambitious individuals who would have taken a training course in any casewill not apply to the program if they stand a chance of being in the nontreatmentgroup. Such individuals, who might have enrolled in a nonrandomized regime, maymake plans anticipating enrollment in a training program. With randomization theymay alter their decision to apply or undertake activities complementary to training.Thus risk-averse persons will tend to be eliminated from the program.

Quasi-Experimental Techniques

In quasi-experimental methods the treatment and control groups are selected afterthe intervention. Econometric techniques are used to correct for the differences incharacteristics between the two groups. The main appeal of this method lies in itsrelatively low cost and the ability to undertake the evaluation at any time. The maindrawback is that these techniques—if done properly—are statistically complex. Thetechniques used to adjust for differences in observable attributes (for example, sex,age, region of residence, education) are relatively straightforward but subject to speci-fication errors; correcting for unobservable characteristics (for example, motivation,family connections) requires a convoluted procedure that can yield wildly differentresults. Quasi-experimental evaluations fall into three types: regression adjusted forobservable characteristics; regression adjusted for observable and unobservable char-acteristics (selectivity corrected); and matched pairs.

REGRESSION ADJUSTED FOR OBSERVED CHARACTERISTICS. This technique is used toassess the impact of participation in a program when the observable characteristics ofthe participants and the comparison group are different. This method is appropriatefor estimating the effect of a program when the difference between participants andnonparticipants can be explained by these observable characteristics. For example, ifbetter-educated workers are more successful in finding work regardless of whether ornot they had special training, then controlling for the effect of education (usingregression techniques) will provide more reliable estimates than would a simple com-parison of the reemployment probabilities of the control and treatment groups.

REGRESSION ADJUSTED FOR OBSERVED AND UNOBSERVED VARIABLES (SELECTIVITY

CORRECTED). When selection into programs is not random, and participation in aprogram is due to both observable and unobservable characteristics, the above tech-


nique, which corrects for observed characteristics, is likely to be biased. Even if par-ticipants and nonparticipants have similar observable characteristics, unobservablecharacteristics (such as innate ability) would lead to incorrect inferences about non-participants. This technique uses a method developed by Heckman (1979) called“sample selectivity correction” to try to control for these unobservables.

MATCHED PAIRS. Because the observed characteristics of individuals in the controland treatment groups are bound to be different to some degree, these groups arelikely to have different success rates in finding employment even in the absence ofactive labor market programs. To control for these differences, synthetic controlgroups are constructed using a matched pairs approach. The synthetic control group,which is a subset of the entire control group, is composed of individuals whose ob-servable characteristics most closely match those of the treatment group.

Relative Strengths of Techniques

Estimating the effect of an employment program on the earnings of trainees, usingrandomized and quasi-experimental techniques, LaLonde (1986) found that ran-domized experiments yielded results significantly different from those that relied onquasi-experimental techniques. Policymakers should be aware that availablenonexperimental evaluations of training programs may contain large biases. Whilerandomized experimentation is theoretically the best technique to estimate the ef-fects of interventions, quasi-experimental techniques may be superior in practice.

The main weakness of randomized experiments is their inability to ensure thatindividuals in the control group do not alter their behavior in a way that contami-nates the experiment. For example, individuals denied public job training mightenroll in private programs, which would bias the results of any evaluation of publicprograms.1 It may also be difficult to ensure that assignment is truly random. Forexample, applicants may be selected into the program because of nepotism, or pro-gram administrators may deliberately exclude high-risk applicants to achieve resultsthat reflect well on the program. A third problem concerns ethical questions abouttreating individuals as subjects in an experiment. Finally, experimental evaluationsare possible only for future programs, because the control and treatment groups haveto be selected before the program is initiated.

Using the dual criteria of rigor and feasibility then, randomized experiments arenot necessarily superior to quasi-experimental techniques. Because the decision toevaluate labor market programs often occurs after the programs are in place andbecause the costs of setting up the experiments are high, randomized evaluationsshould perhaps be the last alternative. Within quasi-experimental techniques, selec-tivity correction may not add much, especially when information is available for aconsiderable number of observable individual and labor-market characteristics (such


as education, age, sex, household wealth, and region of residence). In addition tobeing cumbersome and somewhat counterintuitive, this method often gives arbi-trary results depending on the selectivity-correction specification that is used.

This leaves the matched pairs and regression-adjusted techniques. Of the two, thematched pairs technique is preferred because the procedure is less arbitrary. Becausethe observed differences between the treatment and comparison group are mini-mized, the exact specification of the model becomes less important. And because theprogram measures the simple difference in the variables that policymakers want an-swered (reemployment probabilities and wages) between the control and treatmentgroups, the results are easier for nonstatisticians to interpret.

One weakness shared by both the scientific and nonscientific evaluations is thatthey do not take into account the displacement that may result from the retrainingprogram. For example, in countries where demand for labor is constrained, retrain-ees may “bump,” or displace, employed workers, so aggregate unemployment maynot change despite the size of the program. In general, displacement implies that thesocial benefits from reemployment attributable to the retraining program are lowerthan indicated by the evaluation, however well done.

The Importance of Costs

For the purposes of informing policy decisions, an evaluation is not complete untilthe costs of both the retraining program and its alternatives are considered. For ex-ample, if retraining is twice as costly as job search assistance but no more effective infinding people jobs and increasing their wages, job search assistance is twice as cost-effective. At least at the margin, such a finding would constitute a case for reallocat-ing resources from retraining to job search programs. Unfortunately, costs appear tobe the least analyzed aspect of these programs in OECD countries.

Even the most careful evaluations of retraining programs cannot be used for socialcost-benefit analysis because of the displacement effects discussed above. But whendone correctly, evaluations are good guides for cost-benefit analysis of private train-ing programs, which policymakers can use to institute cost recovery in public pro-grams and to promote private provision. Evaluations may also help in deciding whetherretraining programs reduce budgetary expenditures by moving people off unem-ployment benefits into productive employment or whether the programs are a drainon the budget despite being effective.

Evaluating Retraining in OECD Countries

Retraining programs in OECD countries have been designed primarily to assist threecategories of workers: those laid off en masse; those who have lost their jobs because


of plant closures; and those who have been unemployed over the long term. Thisreview of the evaluations of eleven retraining programs classifies the specific situa-tion that the program was designed to address, describes the policy intervention thatwas selected and the type of evaluation used, and reports the main results. Becausethe success of retraining programs depends on aggregate or regional labor marketconditions, such as unemployment rates and the state of the leading industry, theseindicators are reported as well.

We examine the type of retraining provided, whether in classrooms or on-the-job,and whether it was accompanied by—or in lieu of—other measures, such as jobsearch assistance. The evaluations are classified as experimental, quasi-experimental,and nonscientific, and we do not consider inferences drawn from the nonscientificevaluations to be reliable. We then look at the effects of the program on reemploy-ment and wages, both for subgroups of retrainees and type of intervention. The costsof the program are included when they are reported.

Training Programs Instituted as a Result of Mass Layoffsand Plant Closures

The results of eleven programs (three in the United States, four in Sweden, andone each in Australia, Canada, Denmark, and France) examining the effectivenessof retraining programs for workers displaced through mass layoffs and plantclosures have been reviewed (Table A.1). Five of the evaluations were nonscientificand five were quasi-experimental. One study relied on more than one techniqueto evaluate the impact of the program; no study used experimental evaluationtechniques.

The retraining programs were undertaken to assist workers in the steel, pulp, min-ing, shipbuilding, and automotive industries. The number of workers who lost theirjobs varied from about 500 to 3,000 per plant. The rationale underlying the pro-grams was apparently to assist the affected workers in any way possible. Generally,these programs were instituted during periods of high or rising aggregate unemploy-ment or during a contraction in certain manufacturing industries. For example, theevaluations in the United States and Canada covered primarily the auto and steelindustries, which were battered by competition from Japan. Between 1978 and 1980,auto production in the two countries declined 25 percent, precipitating layoffs andplant closures in the early 1980s. In Europe and Australia the retraining programsseem to have been instituted during periods of high or rising rates of unemployment.Most of the retraining programs were classroom based, and accompanied by jobsearch assistance. With only one exception, on-the-job training was not provided orfacilitated. In France retraining was accompanied by financial incentives to regionalfirms that hired trainees, so the full costs of the program were likely high (OECD

1993a).


Quasi-experimental and nonscientific techniques were used in evaluating all ofthese retraining programs. None of the studies was longitudinal, so they provide atbest a snapshot of the labor market benefits of the program. The longer-term ben-efits of retraining were not evaluated even by the scientific evaluations. Althoughnonscientific evaluations indicate that these programs are very effective in placinghigh numbers of male workers in wage-earning jobs or in self-employment and womenin business start-ups, more reliable quasi-experimental evaluations indicate that re-training programs are generally no more effective than job search assistance in in-creasing either reemployment probabilities or postintervention earnings. Some re-training programs resulted in modest gains in reemployment probabilities, but thewage changes were sometimes negative. Interestingly, evaluations of three retrainingprograms for U.S. auto workers showed the contrast between scientific and non-scientific techniques: in San José, California, a nonscientific evaluation indicatedhigh placement rates, while in Buffalo, New York, and Michigan—during the sameperiod—scientific evaluations showed that these programs were ineffective (OECD

1993a; Corson, Long, and Maynard 1985; Leigh 1992).The costs, when they are known, varied between $3,500 and $25,000 a person.

Evaluations seldom report the full costs of retraining or job search programs, how-ever, so determining cost-effectiveness is difficult. Retraining programs appear to bebetween two and four times more expensive than job search programs: for example,in Buffalo, job search services cost $850 a participant, while retraining cost $3,300(Corson, Long, and Maynard 1985). If, as the findings indicate, both programs haveroughly the same success, job search assistance may be more cost-effective than re-training in assisting displaced workers get jobs.

Training Programs for the Long-Term Unemployed

There is no reason to assume that the impact of retraining on the long-term unem-ployed is the same as it is on workers laid off en masse. The results of studies exam-ining the effectiveness of retraining programs for the long-term unemployed are shownin Table A.2. Of the eleven evaluations (four in the United States, three in Germany,two in the Netherlands, and one each in Canada and Britain), four were nonscien-tific, four were quasi-experimental, and three were experimental.

The clientele of retraining programs for the long-term unemployed is relativelyheterogeneous. Because these individuals are displaced from various sectors and somehave never worked, they are likely to be more varied in age, skills, and educationthan laid-off workers. New Jersey’s retraining program in 1986–87 included work-ers whose previous jobs were in manufacturing, trade, and services (Anderson, Corson,and Decker 1991); many were more than 55 years old. In contrast, half the workersin Germany’s retraining program for the long-term unemployed were less than 35years old (Johanson 1994).


These programs are generally instituted during improving conditions in industryor in aggregate employment. Interventions at this stage, if appropriately designed,are thought to enable the long-term unemployed to obtain some of the jobs that arebeing created. The programs are more comprehensive than are those for people laidoff en masse and generally provide a mix of classroom or workshop training, on-the-job training, and job search assistance.

Some experimental evaluations were conducted in the United States, and quasi-experimental techniques were used in both the United States and Europe. Some ofthese studies were longitudinal, providing an indication of the medium-term labormarket benefits of the retraining program (see Johanson 1994 and OECD 1993b forEurope; and Leigh 1992, and Anderson, Corson, and Decker 1991 for the UnitedStates). But many of the evaluations in Europe were nonscientific.

Again, the results of nonscientific evaluations, which were encouraging, were notconfirmed by evaluations based on scientific techniques. The effectiveness of pro-grams for the long-term unemployed, while not high, was better than that of pro-grams for those laid off en masse. A few programs did result, or were thought to haveresulted, in gains in either reemployment probabilities or wages; some evaluationsalso indicated that these programs were more effective in helping women. But whereparticipants did record gains in employment, longitudinal studies generally foundthat the effects of retraining dissipated within a couple of years. In this group, too,retraining programs were generally no more effective than job search assistance inincreasing either reemployment probabilities or postintervention earnings. For ex-ample, evaluations of the Texas Worker Adjustment Demonstration program indi-cated that participants were likely to be employed more rapidly than nonpartici-pants, but that over time, the employment opportunities of male participants wereno better than those of nonparticipants or of those who only had job search assis-tance (Bloom 1990). The costs, when known, varied between $900 and $12,000 aperson, about twice as much as job search services, but the lack of data makes itdifficult to determine the absolute cost-effectiveness of these programs. Still, jobsearch assistance programs appear to be somewhat more cost-effective than retrain-ing programs in finding jobs for the long-term unemployed.

Evaluation Results for Hungary

Rising unemployment and falling real wages are a vivid and costly aspect of countriesin transition from controlled to market economies. Long-run unemployment is par-ticularly pernicious, and many countries have mounted active labor programs (forinstance, public retraining programs and public service employment) to deal withthis problem. With the exception of Hungary, where the World Bank has sponsoredrigorous evaluations and collections of data on costs, little reliable information exists


on their effectiveness. As an early reformer, Hungary provides valuable lessons forother transition economies. Since 1989 sharp declines in the country’s gross domes-tic product have been accompanied by rising unemployment and falling real wages.The unemployment rate appears to have stabilized since 1993, but employmentcontinues to decline, reflecting a continuing withdrawal of workers from the formallabor market. Since 1990 the government has offered workers retraining programsfinanced by a national employment fund. Trainees, who are either currently unem-ployed or are working but expect to become unemployed, include participants inpublic works programs. Instruction is largely classroom based.

Evaluations using different quasi-experimental techniques—matched pairs, regres-sion adjusted, and selectivity corrected—yielded different results (O’Leary 1995).Before adjusting for differences in the characteristics of program participants andcontrol groups, estimates of effectiveness indicated that retraining significantly raisedthe probability of reemployment. But when the observable characteristics of treat-ment and control groups were taken into account, retraining (and training, becauseabout 40 percent of trainees had not worked previously) was only marginally suc-cessful at best, increasing the probability of finding employment by 6 percent. Fur-ther controls for unobservable attributes led to ambiguous results. Retraining wasnot at all successful in raising earnings.

Preliminary analysis indicates that retraining was a substitute for attributes thatlead to higher reemployment probabilities in the absence of any intervention, such asbeing younger, better educated, and from more dynamic regions. That is, theprogram’s value-added (in terms of improving labor market outcomes) is greater forrelatively disadvantaged job-seekers. This finding may be country specific, and othercountries or regions should determine whether it applies to them before implement-ing similar large-scale programs. For the programs evaluated in Hungary, focusingmore on job-seekers who lack these attributes would appear to serve both equity andefficiency objectives better than simply ensuring support for programs whose re-trainees have high probabilities of reemployment and gains in earnings. The analysisimplies that public retraining programs should target older men from backwardregions.2

This finding also highlights the usefulness of rigorous impact evaluations, whichnet out the effects of such attributes in determining whether a program is effective.And it underscores the need to agree upon a reliable, feasible, and easily interpretedtechnique to evaluate the efficiency and equity effects of labor programs. Because ofits analytical rigor and feasibility, we argue that the preferred evaluation technique ismatched pairs analysis, where trainees are compared with a subset of the controlgroup whose characteristics most resemble their own.

Private cost-benefit analysis of the costs of retraining (an average of approximately$900 per trainee in 1994, according to Pulay 1995) and the level of gains in reem-ployment reveal that based on reasonable assumptions about the durability of


program effects and the amount and duration of unemployment benefits, it wouldtake more than 30 years to recover costs of the program (Gill and Dar 1995). Itseems difficult to justify retraining programs based on economic considerations alone,even in a country such as Hungary where the government provides benefits for un-employed workers.

Summary and Conclusion

The paucity of rigorous evidence on the costs and effectiveness of retraining pro-grams does not permit a definitive conclusion on whether such interventions can bejustified economically (Table 1). The scattered evidence does not appear to justifythe indiscriminate expansion of retraining programs to cover more of the unem-ployed. These conclusions are consistent with the findings in the OECD EmploymentOutlook (1993b), which concluded that “for the broadly targeted sub-group of pro-grams, the overall impression is most troubling. Available evidence does not permitstrong conclusions, but it gives remarkably meager support of a hypothesis that suchprograms are effective.”

From this discussion it appears that transition and other restructuring economiescan draw the following lessons from experience in the OECD countries:

Table 1. Summary of OECD Retraining Programs and EvaluationsDisplaced Long-term

Item workers unemployed

Previous sector of employment Manufacturing Heterogeneous

Labor market conditions Generally deteriorating Generally improving

Training venue Mainly classroom Classroom and OJT

Other measures provided JSA JSA

Type of evaluationNonscientific 6 4Quasi-experimental 5 4Experimental 0 3 (all U.S.)

EffectivenessNonscientific techniques Positive Generally positiveScientific techniques Negative Generally negative;

some groups benefitRelative to JSA No more effective No more effective

CostsRetraining Data are not available Data are not availableRelative to JSA At least twice as costly At least twice as costly

Note: JSA, job search assistance; OJT, on-the-job training.


First, sound techniques should be used to evaluate retraining programs (and otherpublic interventions). Although the nonscientific evaluations of retraining programspresent a rosy picture based on placement rates and other informal evidence, scien-tific evaluations are quite discouraging. Relying on nonscientific evaluations maylead to incorrect policy conclusions.

Second, rigorous evaluations, although not necessarily allowing a complete socialcost-benefit analysis, can be useful for policymakers in allocating public expenditureon labor programs. Reviews of evaluations find, for example, that job search assis-tance measures—which cost less than retraining but appear equally effective—maybe a more cost-effective device in assisting displaced workers.

Third, OECD experience of retraining programs for workers displaced en massemay be useful in designing assistance programs in transition countries such as theformer Soviet Union and liberalizing economies that expect labor shedding in themanufacturing and mining sectors. Principally, these economies should recognizethat retraining should not be the main form of assistance.

Fourth, transition and developing economies that are beginning to experiencelong-term unemployment can learn from OECD experience, which indicates that re-training programs for the long-term unemployed are more beneficial for some groupsthan for others within this relatively heterogeneous group of job-seekers. Whichgroup will benefit most from retraining is difficult to predict, however. Principally,these results call for using modest untargeted pilot programs, evaluating them rigor-ously, and then tightly targeting public retraining programs to those for whom theyare found most cost-effective.

Notes

Amit Dar is in the Social Protection Group of the World Bank’s Human Development Network,and Indermit S. Gill is in the Latin America and Caribbean Country Department I. The authors aregrateful to Jane Armitage, Kathie Krumm, Ana Revenga, Michal Rutkowski, and anonymous refer-ees for helpful suggestions.

1. Heckman (1992) documents other limitations of this technique when applied to social experi-ments; these limitations derive from selectivity biases.

2. These findings contrast with those of Revenga, Riboud, and Tan (1994) for retraining pro-grams in Mexico. Using quasi-experimental techniques, they find that effectiveness can be improvedif programs better target relatively educated job-seekers of both sexes with previous work experience.They also find generally more encouraging results than those for OECD countries and Hungary.


Tab

le A

.1.

Ove

rvie

w o

f Stu

dies

Eva

luat

ing

Tra

inin

g Pr

ogra

ms f

or W

orke

rs D

ispla

ced

by P

lant

Clo

sure

s and

Mas

s Lay

offs

Labo

r m

arke

t pro

blem

Rel

evan

t ind

icat

ors

Inte

rven

tion

des

ign

Typ

e of

eva

luat

ion

Res

ult

Com

men

ts

Ford

Mot

or C

o. p

lant

clos

ure

in S

an J

osé,

Cal

if. (1

982)

. Som

e2,

400

wor

kers

affe

cted

(OE

CD

199

3a).

Aut

omot

ive

plan

tcl

osur

es in

Mic

higa

n(1

980–

83).

Mor

e th

an3,

000

wor

kers

laid

off,

mos

tly e

xper

ienc

ed,

high

ly p

aid

blue

-col

lar

mal

e em

ploy

ees (

Leig

h19

92; 1

994)

.

Aut

o an

d st

eel p

lant

clos

ures

in B

uffa

lo,

N.Y

. (19

82–8

3). M

ass

layo

ffs o

f hig

hly

paid

,ex

peri

ence

d bl

ue-c

olla

rm

ale

wor

kers

(Cor

son,

A 2

5 pe

rcen

t dec

line

inau

to p

rodu

ctio

n be

-tw

een

1978

and

80.

Une

mpl

oym

ent r

ates

rose

from

7.5

per

cent

in 1

981

to 9

.5 p

erce

ntin

198

2 an

d 19

83, a

ndm

anuf

actu

ring

em

ploy

-m

ent d

eclin

ed b

y 5

perc

ent d

urin

g 19

81–

83.

A 2

5 pe

rcen

t dec

line

inau

to p

rodu

ctio

n be

-tw

een

1978

and

198

0.H

igh

unem

ploy

men

tra

tes i

n 19

81–8

2 na

-tio

nally

(9.5

per

cent

),w

hich

fell

to 7

.5 p

er-

cent

by

1984

. Man

u-fa

ctur

ing

empl

oym

ent

rose

by

5 pe

rcen

t be-

twee

n 19

83 a

nd 1

984.

Hig

h un

empl

oym

ent

rate

s in

1981

–82

na-

tiona

lly (9

.5 p

erce

nt),

whi

ch fe

ll to

7.5

per

-ce

nt b

y 19

84.

Man

ufac

turi

ng

Bas

ic sk

ills t

rain

ing

asw

ell a

s tar

gete

d vo

ca-

tiona

l tra

inin

g in

mar

-ke

tabl

e sk

ills.

Bot

h JS

A a

nd c

lass

room

trai

ning

wer

e pr

ovid

edpr

ompt

ly a

fter

pla

ntcl

osur

es. R

etra

inin

g w

asof

fere

d in

occ

upat

ions

in w

hich

ther

e w

asgr

owin

g de

man

d,in

clud

ing

blue

-col

lar

trad

es.

Dis

plac

ed w

orke

rsw

ere

prov

ided

with

both

JSA a

nd e

ither

clas

sroo

m tr

aini

ng o

rO

JT. P

rogr

am s

ervi

ces

wer

e pr

ovid

ed a

fter

a

Hig

h ra

te o

f suc

cess

inpl

acin

g w

orke

rs in

jobs

.

Cla

ssro

om tr

aini

ng d

idno

t sig

nific

antly

im-

prov

e th

e pa

rtic

ipan

ts’

reem

ploy

men

t rat

e.T

rain

ees

did

no b

ette

rth

an th

ose

rece

ivin

gJS

A.

JSA s

ervi

ces

had

a fa

irly

larg

e im

pact

on

earn

-in

gs fo

r th

e fir

st s

ixpo

st-p

rogr

am m

onth

s.H

owev

er, t

here

is n

oev

iden

ce th

at e

ither

Perc

eive

d su

cces

s w

asdu

e to

ade

quat

e re

-so

urce

bas

e ($

6,00

0gr

ant

per

wor

ker)

and

a hi

gh d

egre

eof

coo

rdin

atio

npr

ovid

ed b

y Fo

rd a

ndby

gov

ernm

ent.

Ear

ning

s es

timat

es v

ary

(ran

ging

from

neg

ativ

eto

sig

nific

antly

pos

i-tiv

e). T

rain

ing

does

not s

eem

to h

ave

been

very

eff

ectiv

e, e

spe-

cial

ly in

ligh

t of t

hefa

ct th

at tr

aini

ng c

ost

twic

e as

muc

h as

JSA.

Cla

ssro

om tr

aini

ng a

ndO

JT w

ere

inef

fect

ive.

The

se p

rogr

ams c

ost

abou

t fou

r tim

es a

sm

uch

as JS

A, i

mpl

ying

that

JSA is

pot

entia

lly

Non

scie

ntifi

c

Qua

si-

expe

rim

enta

l

Qua

si-

expe

rim

enta

l


Long

, and

May

nard

1985

).

Plan

t clo

sure

s at 1

3st

eel f

acto

ries

and

min

es in

Can

ada

in th

e19

80s (

Leig

h 19

92).

Stee

l and

coa

l pla

ntcl

osur

es in

Cre

usot

-Lo

ire,

Fra

nce

(198

4).

1,23

0 pe

ople

aff

ecte

d( O

EC

D 1

993a

).

empl

oym

ent r

ose

by 5

perc

ent b

etw

een

1983

and

1984

.

Une

mpl

oym

ent r

ates

rose

bet

wee

n 19

80 a

nd83

. Em

ploy

men

t in

nona

gric

ultu

ral a

ctiv

i-tie

s fel

l slig

htly

dur

ing

the

peri

od.

Stee

l sec

tor

cont

ract

ion

resu

lted

in th

e lo

ss o

f6,

000

jobs

dur

ing

1984

. Une

mpl

oym

ent

rate

s ro

se fr

om 8

.1pe

rcen

t in

1982

to10

.2 p

erce

nt b

y 19

85.

In m

inin

g em

ploy

men

tfe

ll by

alm

ost 4

0 pe

r-ce

nt b

etw

een

1980

and

1990

. Man

ufac

turi

ngem

ploy

men

t fel

l abo

ut6

perc

ent f

rom

198

3 to

1985

.

fair

ly le

ngth

y pe

riod

of

unem

ploy

men

t.

JSA a

nd tr

aini

ng p

ro-

gram

s wer

e pr

ovid

ed.

Wor

kers

rece

ived

70

perc

ent o

f the

ir fo

rmer

sala

ries f

or 1

0 m

onth

sw

hile

enr

olle

d in

re-

trai

ning

and

job-

sear

chac

tiviti

es. T

rain

ees (

inen

gine

erin

g, p

last

icm

oldi

ng, r

efrig

erat

ion,

etc.

) wer

e pr

omise

dre

empl

oym

ent i

n th

ere

gion

. Car

eer c

ouns

el-

ing

and

shor

t cou

rses

inw

ork

skill

s, pr

oduc

tion

met

hods

for s

mal

l firm

s,

clas

sroo

m tr

aini

ng o

rO

JT h

ad a

ny in

crem

en-

tal e

ffec

t.

Part

icip

ants

had

a 7

perc

ent h

ighe

r rat

e of

empl

oym

ent t

han

com

para

bly

disp

lace

dw

orke

rs w

ho d

id n

otpa

rtic

ipat

e in

the

pro-

gram

. Thi

s im

pact

was

attr

ibut

ed to

trai

ning

inw

hich

28

perc

ent o

fw

orke

rs p

artic

ipat

ed.

But

at t

wo

min

ing

sites

,th

e pr

ogra

m h

ad n

oim

pact

.

Hig

h su

cces

s ra

te in

findi

ng jo

bs fo

r pa

rtic

i-pa

nts.

the

only

cos

t-ef

fect

ive

prog

ram

. No

evid

ence

was

pro

vide

d on

the

part

icip

ants

’ em

ploy

-ab

ility

.

Tra

inin

g se

ems t

o ha

veha

d a

grea

ter i

mpa

ctth

an JS

A. N

o in

form

a-tio

n w

as a

vaila

ble

onth

e co

st o

f tra

inin

g. J

obco

unse

ling

has l

ittle

impa

ct in

Can

ada,

whe

re su

ch se

rvic

es a

rero

utin

ely

prov

ided

toth

e un

empl

oyed

by

the

Publ

ic E

mpl

oym

ent

Serv

ice.

No

evid

ence

that

re-

trai

ning

pro

gram

spr

oduc

ed lo

ng-t

erm

empl

oym

ent b

enef

its.

Qua

si-

expe

rim

enta

l

Non

scie

ntifi

c

(Tab

le c

ontin

ues o

n th

e fo

llow

ing

page

s.)


and

job

sear

ch te

ch-

niqu

es w

ere

also

pro

-vi

ded.

Firm

s wer

e gi

ven

finan

cial

ince

ntiv

es to

hire

thes

e w

orke

rs.

Part

icip

ants

wer

e pr

o-vi

ded

with

cla

ssro

omtr

aini

ng.

A si

gnifi

cant

num

ber o

fw

orke

rs jo

ined

retr

ain-

ing

prog

ram

s sev

eral

mon

ths b

efor

e th

eyw

ere

laid

off.

Cou

rses

of v

aryi

ng d

urat

ion

wer

e of

fere

d in

wel

d-in

g, e

ngin

eeri

ng, a

ndco

ntro

l eng

inee

ring

.T

hese

retr

aini

ng p

ro-

gram

s wer

e pr

ovid

ed b

yth

e st

ate-

owne

d tr

ain-

ing

boar

d, m

unic

ipal

educ

atio

n in

stitu

tions

,an

d ot

her a

dult

educ

a-tio

n se

rvic

es.

Qua

si-

expe

rim

enta

l

Non

scie

ntifi

c

Part

icip

ants

rec

eive

dlo

wer

wee

kly

wag

esth

an th

ose

who

did

not

rece

ive

trai

ning

. Dro

pin

ear

ning

s w

as e

spe-

cial

ly s

igni

fican

t in

the

first

yea

r; th

ere

wer

eno

app

reci

able

long

-te

rm g

ains

.

By

Nov

embe

r 19

87,

mor

e th

an 9

0 pe

rcen

tof

the

wor

kers

who

had

com

plet

ed tr

aini

ngha

d fo

und

jobs

or

beco

me

self-

empl

oyed

—m

ost o

f the

m in

occu

patio

ns fo

r w

hich

they

had

trai

ned.

Pulp

pla

nt c

losu

re in

Kra

mfo

rs, S

wed

en(1

977)

(OE

CD

199

1).

Abo

ut 2

,000

wor

kers

laid

off

at t

he U

dde-

valla

shi

pyar

d in

Sw

e-de

n (1

985)

(A

lftha

nan

d Ja

nzon

199

4).

Une

mpl

oym

ent r

ates

in S

wed

en r

ose

from

1.6

perc

ent i

n 19

76 to

2.2

perc

ent b

y 19

78.

Em

ploy

men

t in

man

u-fa

ctur

ing

decl

ined

by

8pe

rcen

t bet

wee

n 19

77an

d 19

79.

Vol

vo C

o. s

et u

p a

man

ufac

turi

ng p

lant

inU

ddev

alla

. Une

mpl

oy-

men

t rat

es w

ere

decl

in-

ing

in th

is p

erio

d w

hile

man

ufac

turi

ng e

m-

ploy

men

t was

fair

lyst

eady

.

No

info

rmat

ion

pro-

vide

d on

ree

mpl

oy-

men

t rat

es o

r co

sts.

Ben

efits

from

ret

rain

-in

g pr

ogra

m w

ere

insi

gnifi

cant

.

Tw

o fa

ctor

s ac

coun

ted

for

the

succ

ess

of th

etr

aini

ng p

rogr

am:

econ

omic

and

labo

rm

arke

t con

ditio

nsw

ere

buoy

ant i

n th

ere

gion

, and

man

age-

men

t, em

ploy

men

tof

fices

, and

trai

ning

agen

cies

wor

ked

incl

ose

coop

erat

ion.

Tab

le A

.1.

(con

tinu

ed)

Labo

r m

arke

t pro

blem

Rel

evan

t ind

icat

ors

Inte

rven

tion

des

ign

Typ

e of

eva

luat

ion

Res

ult

Com

men

ts


A re

trai

ning

pro

gram

was

des

igne

d to

hel

p th

eex

istin

g w

ork

forc

em

anag

e th

e ch

ange

with

out j

ob lo

sses

. The

com

pany

acc

epte

d th

epr

opos

al u

nder

the

stip

ulat

ion

that

the

cost

be sh

ared

by

the

gove

rn-

men

t. T

he p

rogr

am w

asa

broa

d co

mpe

tenc

y-ra

ising

exe

rcise

, with

spec

ific

trai

ning

topr

epar

e th

e pa

rtic

ipan

tsfo

r the

pro

duct

ion

ofth

e ne

w a

utom

obile

s.

Thi

s pr

ogra

m (

1986

–89

) tr

aine

d w

omen

entr

epre

neur

s to

hel

pth

em s

tart

thei

r ow

nbu

sine

sses

. A to

tal o

f20

0 ho

urs

of s

peci

ficbu

sine

ss-o

rien

ted

trai

ning

was

pro

vide

d.

Non

scie

ntifi

c

Non

scie

ntifi

c

Prog

ram

has

not

yet

been

eva

luat

ed.

Fift

y-on

e bu

sine

sses

wer

e se

t up

in 1

989.

Less

than

a th

ird

of th

epa

rtic

ipan

ts o

pene

d a

full-

time

busi

ness

, and

few

hir

ed a

ny e

mpl

oy-

ees,

thus

the

tota

lad

ditio

nal e

mpl

oym

ent

gene

rate

d w

as lo

w.

Vol

vo C

o. p

lant

at

Göt

ebor

g, S

wed

en,

anno

unce

d th

at 1

,000

wor

kers

wou

ld b

e la

idof

f in

1992

as

it ph

ased

out a

n ol

d m

odel

and

tool

ed u

p fo

r a

new

one

(Alft

han

and

Janz

on 1

994)

.

Ship

yard

clo

sure

inSt

orst

rom

cou

nty,

Den

mar

k (1

986)

.2,

000

peop

le lo

st th

eir

jobs

(O

EC

D 1

993a

).

Vol

vo p

lann

ed to

recr

uit 8

00 w

orke

rs to

man

ufac

ture

the

new

line

of c

ars.

Une

m-

ploy

men

t rat

es w

ere

risi

ng s

harp

ly—

from

3.2

perc

ent i

n 19

91 to

5.9

perc

ent i

n 19

92.

Man

ufac

turi

ng e

m-

ploy

men

t dro

pped

by

9 pe

rcen

t in

1992

.T

otal

em

ploy

men

t fel

lby

4 p

erce

nt.

Hig

h un

empl

oym

ent

rate

s in

reg

ion,

esp

e-ci

ally

am

ong

wom

en.

Nat

iona

l une

mpl

oy-

men

t rat

es fo

r m

en in

1986

and

198

7 w

ere

6.1

and

6.4

perc

ent,

resp

ectiv

ely,

whi

le th

eco

rres

pond

ing

num

-be

rs fo

r w

omen

wer

e10

and

9.6

per

cent

.E

mpl

oym

ent i

n m

anu-

fact

urin

g w

as s

tagn

ant

from

the

mid

-198

0s.

Prog

ram

cos

ts a

reex

pect

ed to

be

abou

t$2

5 m

illio

n ($

25,0

00pe

r pe

rson

), c

lose

toha

lf of

whi

ch w

ill b

epa

id fo

r by

the

gove

rn-

men

t. In

judg

ing

the

cost

-eff

ectiv

enes

s of

this

pro

gram

, it s

houl

dbe

not

ed th

at th

e un

-em

ploy

men

t ben

efits

the

gove

rnm

ent w

ould

have

had

to p

ay

wou

ld a

mou

nt to

$6.5

mill

ion.

The

pro

gram

did

not

seem

to b

e su

cces

sful

and

was

app

aren

tlyqu

ite c

ostly

(re

liabl

eco

st e

stim

ates

are

not

avai

labl

e).

(Tab

le c

ontin

ues o

n th

e fo

llow

ing

page

.)


Swed

en, 1

980s

and

1990

s: g

ener

al e

valu

a-tio

n of

pub

lic r

etra

in-

ing

prog

ram

s ( O

EC

D

1991

).

Aut

omob

ile p

lant

clos

ure

in A

ustr

alia

in19

84. 4

45 w

orke

rs la

idof

f (Le

igh

1992

).

Une

mpl

oym

ent r

ose

stea

dily

ove

r th

epe

riod

.

Une

mpl

oym

ent r

ates

rose

ste

adily

in A

ustr

a-lia

, rea

chin

g a

high

of

9 pe

rcen

t in

1984

befo

re fa

lling

to 8

perc

ent f

or th

e ne

xtfe

w y

ears

. Bet

wee

n19

80 a

nd 1

984

em-

ploy

men

t in

man

u-fa

ctur

ing

fell

by 4

perc

ent.

Var

ious

type

s

Labo

r A

djus

tmen

tT

rain

ing

Arr

ange

men

tof

fere

d cl

assr

oom

trai

ning

(av

erag

ele

ngth

19

wee

ks).

Mai

n di

stin

ctio

n be

-tw

een

cour

ses

was

whe

ther

they

pro

vide

ddr

iver

trai

ning

or

not.

Var

ious

type

s

Qua

si-

expe

rim

enta

l

Ret

rain

ing

prog

ram

sha

ve b

ecom

e le

ss e

ffec

-tiv

e ov

er ti

me—

espe

-ci

ally

sin

ce th

eec

onom

y ha

s be

gun

dete

rior

atin

g. P

artic

i-pa

nts

have

had

mor

etr

oubl

e fin

ding

jobs

than

oth

er u

nem

-pl

oyed

wor

kers

.

Ove

r a

nine

-mon

thpe

riod

, dri

ver

trai

ning

incr

ease

d th

e pr

obab

il-ity

of r

eem

ploy

men

t.H

owev

er, f

ewer

trai

n-ee

s of

oth

er tr

aini

ngco

urse

s fou

nd jo

bs.

The

cos

t-ef

fect

iven

ess

of th

ese

prog

ram

sde

clin

ed b

oth

beca

use

they

wer

e le

ss s

ucce

ss-

ful a

nd b

ecau

se th

eco

sts

incr

ease

d.

The

re w

ere

no d

ata

show

ing

the

cost

-ef

fect

iven

ess

of d

iffer

-en

t typ

es o

f tra

inin

gco

urse

s. S

elf-

sele

ctio

nw

as a

pro

blem

bec

ause

indi

vidu

als

who

cho

seno

t to

part

icip

ate

wer

ein

the

cont

rol g

roup

.T

he im

pact

of l

onge

rtr

aini

ng w

as n

egat

ive.

Not

e: JS

A, j

ob s

earc

h as

sist

ance

; OJT

, on-

the-

job

trai

ning

.

Tab

le A

.1.

(con

tinu

ed)

Labo

r m

arke

t pro

blem

Rel

evan

t ind

icat

ors

Inte

rven

tion

des

ign

Typ

e of

eva

luat

ion

Res

ult

Com

men

ts


Tab

le A

.2.

Ove

rvie

w o

f Stu

dies

Eva

luat

ing

Tra

inin

g Pr

ogra

ms f

or th

e Lo

ng-T

erm

Une

mpl

oyed

Labo

r m

arke

t pro

blem

Rel

evan

t ind

icat

ors

Inte

rven

tion

des

ign

Typ

e of

eva

luat

ion

Res

ult

Com

men

ts

Tra

inin

g fo

r wor

kers

elig

ible

for J

PTA T

itle

III

prog

ram

(disp

lace

dw

orke

r) in

Hou

ston

,T

exas

(198

3–85

).E

ligib

le in

divi

dual

sw

ere

unem

ploy

ed a

ndha

d a

low

pro

babi

lity

ofre

turn

ing

to th

eir p

revi

-ou

s occ

upat

ion

orin

dust

ry (B

loom

199

0).

Tra

inin

g fo

r w

orke

rsel

igib

le fo

r JP

TA T

itle

III

prog

ram

(di

spla

ced

wor

ker)

in E

l Pas

o,T

exas

(19

83–8

5).

(Cri

teri

a sa

me

asab

ove.

) W

orke

rs la

idof

f fro

m li

ght m

anu-

fact

urin

g pl

ants

(Blo

om 1

990)

.

A d

eclin

e in

pet

ro-

chem

ical

indu

stry

led

to la

yoff

. U.S

. une

m-

ploy

men

t rat

es d

e-cl

ined

from

9.5

per

-ce

nt in

198

3 to

7.4

perc

ent i

n 19

85 (

and

mai

ntai

ned

this

tren

dun

til th

e la

te 1

980s

).E

mpl

oym

ent i

n th

isin

dust

ry in

crea

sed

slig

htly

bet

wee

n 19

83an

d 19

85.

U.S

. une

mpl

oym

ent

rate

s de

clin

ed fr

om 9

.5pe

rcen

t in

1983

to 7

.4pe

rcen

t in

1985

(an

dm

aint

aine

d th

is tr

end

until

the

late

198

0s).

Em

ploy

men

t in

man

u-fa

ctur

ing

fell

by c

lose

to 2

per

cent

bet

wee

n19

82 a

nd 1

983

but

rose

to a

bout

5 p

erce

ntin

198

5.

Tex

as W

AD

pro

ject

.D

ispla

ced

wor

kers

wer

epr

ovid

ed w

ith JS

A o

r am

ix o

f JSA

with

cla

ss-

room

trai

ning

.

Tex

as W

AD

pro

ject

.D

ispla

ced

wor

kers

prov

ided

with

JSA a

lone

or c

ombi

ned

with

clas

sroo

m tr

aini

ng.

Exp

erim

enta

l

Exp

erim

enta

l

One

yea

r af

ter

the

prog

ram

’s co

mpl

etio

n,pa

rtic

ipan

ts r

egis

tere

dno

add

ition

al e

arni

ngga

in w

hen

com

pare

dw

ith th

e sa

mpl

e of

wor

kers

who

had

bee

ngi

ven

only

JSA.

One

yea

r af

ter

the

prog

ram

’s co

mpl

etio

n,th

is p

rogr

am r

ecor

ded

no e

ffec

t on

mal

eem

ploy

ees’

earn

ings

but d

id in

crea

se th

eea

rnin

gs o

f wom

en.

Des

pite

the

high

cos

tsof

cla

ssro

om tr

aini

ng(t

wic

e as

muc

h as

JSA),

no a

dditi

onal

gai

nsac

crue

d fr

om th

is ty

peof

trai

ning

.

The

incr

ease

in e

arn-

ings

of f

emal

e pa

rtic

i-pa

nts

was

slig

htly

mor

eth

an th

e pr

ogra

m’s

cost

s. M

ale

empl

oyee

sre

port

ed n

o be

nefic

ial

effe

cts.

(Tab

le c

ontin

ues o

n th

e fo

llow

ing

page

s.)


Ass

ista

nce

aim

ed a

t the

long

-ter

m u

nem

ploy

edin

New

Jer

sey

(198

6–87

). I

n ge

nera

l, w

ork-

ers

wer

e la

id o

ff fr

omm

anuf

actu

ring

, tra

de,

and

serv

ices

(C

orso

nan

d ot

hers

198

9).

Long

-ter

m u

nem

-pl

oyed

wor

kers

in th

eU

.S. (

1988

), p

rim

arily

resu

lting

from

pla

ntcl

osur

es (

Leig

h 19

92).

Une

mpl

oym

ent r

ates

in th

e U

.S. f

ell f

rom

7.1

perc

ent i

n 19

85 to

6.1

perc

ent b

y 19

87.

Whi

le e

mpl

oym

ent i

nm

anuf

actu

ring

re-

mai

ned

fair

ly s

tead

ybe

twee

n 19

85 a

nd19

88, t

rade

em

ploy

-m

ent i

ncre

ased

7 p

er-

cent

and

ser

vice

-sec

tor

empl

oym

ent r

ose

abou

t 5 p

erce

nt.

Une

mpl

oym

ent r

ates

in th

e U

.S. f

ell f

rom

7.1

perc

ent i

n 19

85 to

6.1

perc

ent b

y 19

87.

Whi

le e

mpl

oym

ent i

nm

anuf

actu

ring

re-

mai

ned

fair

ly s

tead

ybe

twee

n 19

85 a

nd19

88, t

rade

em

ploy

-m

ent i

ncre

ased

7 p

er-

cent

and

that

in s

er-

vice

s ab

out 5

per

cent

.

New

Jer

sey

UI

Ree

m-

ploy

men

t Dem

onst

ra-

tion

proj

ect.

Thi

spr

ogra

m p

rovi

ded

disp

lace

d w

orke

rs w

ithJS

A a

lone

, or

follo

wed

by O

JT, c

lass

room

trai

ning

(C

T),

or

are

empl

oym

ent b

onus

.

The

Tra

de A

djus

tmen

tA

ssis

tanc

e Pr

ogra

mw

as in

tend

ed to

de-

velo

p w

orke

rs’ s

kills

inne

w o

ccup

atio

ns. M

ost

of th

ese

skill

s w

ere

supp

lied

by a

voc

a-tio

nal c

olle

ge o

r lo

cal

com

mun

ity c

olle

ge in

cour

ses

that

wer

e m

ore

than

a y

ear

long

.

Exp

erim

enta

l

Qua

si-

expe

rim

enta

l

Mor

e th

an 1

0 qu

arte

rsaf

ter

the

prog

ram

ende

d, b

oth

CT

and

OJT

sig

nific

antly

in-

crea

sed

earn

ings

ove

rth

ose

who

rec

eive

d JS

A

only

. The

se in

divi

dual

sw

ere

also

em

ploy

ed fo

rlo

nger

per

iods

of t

ime

in e

ach

quar

ter

than

the

JSA-o

nly

grou

p.

Indi

vidu

als

who

re-

ceiv

ed tr

aini

ng b

egan

earn

ing

sign

ifica

ntly

mor

e th

an th

ose

who

rece

ived

ext

ende

din

com

e-m

aint

enan

cebe

nefit

s by

the

6th

quar

ter

and

cont

inue

dto

ear

n m

ore

until

the

12th

(la

st)

quar

ter,

reac

hing

a le

vel o

f$5

00 a

qua

rter

.

Whi

le th

e re

sults

of

trai

ning

wer

e po

sitiv

e,th

e fo

llow

ing

cave

ats

appl

y: th

e tr

aine

es w

ere

self-

sele

cted

(th

us th

ese

resu

lts m

ay n

ot a

pply

for

a ra

ndom

gro

up o

fcl

aim

ants

); o

nly

15pe

rcen

t of t

hose

of-

fere

d tr

aini

ng a

ccep

ted

it; a

nd tr

aini

ng b

en-

efite

d th

ose

who

al-

read

y ha

d m

arke

tabl

esk

ills.

Fin

ally

, ana

lysi

ssh

owed

that

the

cost

sex

ceed

ed th

e ex

pect

edbe

nefit

s.

The

ana

lysi

s w

as li

m-

ited

to th

e m

anuf

actu

r-in

g se

ctor

. Lon

g-te

rmin

vest

men

ts in

trai

ning

may

be

effe

ctiv

e in

incr

easi

ng e

arni

ngs,

but t

he tr

aini

ng is

cost

ly (

each

trai

nee

was

give

n a

$12,

000

trai

n-in

g vo

uche

r).

Tab

le A

.2.

(con

tinu

ed)

Labo

r m

arke

t pro

blem

Rel

evan

t ind

icat

ors

Inte

rven

tion

des

ign

Typ

e of

eva

luat

ion

Res

ult

Com

men

ts


Long

-ter

m u

nem

-pl

oyed

wor

kers

inC

anad

a (G

oss

and

asso

ciat

es 1

989)

.

Hig

h re

gion

al u

nem

-pl

oym

ent l

evel

s in

Ger

man

y in

the

late

1970

s ( O

EC

D 1

991)

.

Indi

vidu

als

at r

isk

ofbe

ing

unem

ploy

ed in

1987

–88

in G

erm

any

(Joh

anso

n 19

94).

Com

pare

d w

ith th

eU

.S.,

unem

ploy

men

tra

tes h

ave

been

fairl

yhi

gh in

Can

ada.

How

-ev

er th

ey d

eclin

ed fr

om11

.2 p

erce

nt in

the

mid

-19

80s t

o 7.

5 pe

rcen

t in

1989

. Spu

rred

by

grow

th in

com

mer

cean

d se

rvic

es, e

mpl

oy-

men

t gre

w a

bout

3pe

rcen

t ann

ually

ove

rth

e tim

e pe

riod.

In 2

3 of

the

142

re-

gion

s in

Ger

man

y,un

empl

oym

ent l

evel

sw

ere

abov

e 6

perc

ent.

Som

e fir

ms

wer

e al

sofa

cing

ser

ious

pro

blem

sin

adj

ustin

g to

eco

-no

mic

cha

nges

.

Une

mpl

oym

ent r

ates

wer

e st

eady

bet

wee

n19

86 a

nd 1

988.

The

yfe

ll so

mew

hat b

y 19

90.

Em

ploy

men

t gre

w a

tsl

ight

ly m

ore

than

1pe

rcen

t dur

ing

this

peri

od.

The

Job

Dev

elop

men

tPr

ogra

m p

rovi

ded

clas

sroo

m tr

aini

ng a

ndO

JT. W

ages

and

dir

ect

cost

s of

cla

ssro

omtr

aini

ng w

ere

subs

i-di

zed.

The

wag

e su

b-si

dy h

elpe

d em

ploy

ers

cove

r th

e co

st o

f OJT

.

Am

ong

othe

r in

terv

en-

tions

, tra

inin

g an

dre

trai

ning

of u

nem

-pl

oyed

in fi

rms.

The

firm

s w

ho e

mpl

oyed

thes

e tr

aine

es r

ecei

ved

a su

bsid

y of

90

perc

ent

of th

e em

ploy

ees’

wag

es fo

r tw

o ye

ars.

Thi

s is

an

eval

uatio

n of

four

pro

gram

s, tw

o of

whi

ch tr

aine

d w

orke

rsfo

r ne

w o

ccup

atio

ns(o

ne o

ffer

ed fu

rthe

rtr

aini

ng fo

r em

ploy

edan

d un

empl

oyed

indi

-vi

dual

s, w

hile

the

othe

rof

fere

d re

trai

ning

for

the

unem

ploy

ed).

Qua

si-

expe

rim

enta

l

Non

scie

ntifi

c

Qua

si-

expe

rim

enta

l

Em

ploy

abili

ty o

fw

omen

ros

e w

hile

that

of m

en d

eclin

ed.

Wee

kly

earn

ings

of

wom

en w

ere

insi

gnifi

-ca

nt r

elat

ive

to th

at o

fth

e co

ntro

l gro

up,

whi

le th

ey w

ere

low

erfo

r m

ales

.

Tra

inin

g re

duce

dun

empl

oym

ent s

ome-

wha

t, bu

t it i

s es

ti-m

ated

that

mor

e th

an40

per

cent

of t

hese

hard

-to-

plac

e in

divi

du-

als

had

alre

ady

left

thei

r jo

bs b

y 19

81.

No

type

of t

rain

ing

had

any

sign

ifica

ntim

pact

on

the

flow

sou

t of s

hort

- or

long

-te

rm u

nem

ploy

men

t,or

on

the

flow

s in

toun

empl

oym

ent.

In v

iew

of t

he h

igh

prog

ram

cos

ts (

arou

nd$9

,300

per

par

tici-

pant

), th

is tr

aini

ng is

not c

ost-

effe

ctiv

e,es

peci

ally

for

men

.

In li

ght o

f the

ext

rem

ely

high

cos

t (ar

ound

$50

0m

illio

n fo

r tra

inin

g an

dot

her i

nter

vent

ions

), th

ere

sults

wer

e ve

ry d

isap-

poin

ting.

No

info

rma-

tion

was

pro

vide

d on

wag

es.

No

info

rmat

ion

onw

ages

or

cost

s of

trai

ning

.

(Tab

le c

ontin

ues o

n th

e fo

llow

ing

page

s.)


Tab

le A

.2.

(con

tinu

ed)

Labo

r m

arke

t pro

blem

Rel

evan

t ind

icat

ors

Inte

rven

tion

des

ign

Typ

e of

eva

luat

ion

Res

ult

Com

men

ts

Indi

vidu

als

who

wer

eei

ther

at r

isk

of b

ecom

-in

g un

empl

oyed

or

wer

e al

read

y un

em-

ploy

ed in

Ger

man

y in

the

earl

y 19

80s

(Joh

anso

n 19

94).

Hel

p fo

r lo

ng-t

erm

unem

ploy

ed a

nd d

is-

plac

ed w

orke

rs in

Eng

land

in th

e 19

80s

(Add

ison

and

Sie

bert

1994

).

Une

mpl

oym

ent r

ates

rem

aine

d fa

irly

ste

ady

at ju

st o

ver

10 p

erce

ntin

the

earl

y 19

80s.

Hig

h un

empl

oym

ent

rate

s (a

roun

d 10

–11

perc

ent)

per

sist

edth

roug

h m

uch

of th

e19

80s.

Bet

wee

n 19

83an

d 19

90 e

mpl

oym

ent

rose

by

arou

nd 1

.5pe

rcen

t.

Tra

inin

g pr

epar

edw

orke

rs fo

r ce

rtifi

ca-

tion

in o

ne o

f the

375

appr

entic

eabl

e tr

ades

.T

he p

rogr

am r

equi

red

up to

two

year

s to

com

plet

e. C

onte

nts

and

spec

ifica

tion

ofre

trai

ning

cor

resp

ond

to th

ose

of in

itial

voc

a-tio

nal t

rain

ing.

Thi

s co

mm

unity

-bas

edpr

ogra

m p

rovi

ded

voca

tiona

l tra

inin

g by

loca

l aut

hori

ties

inco

njun

ctio

n w

ith lo

cal

colle

ges,

cen

tral

gov

-er

nmen

t, an

d vo

lun-

tary

org

aniz

atio

ns.

Litt

le p

riva

te s

ecto

rin

volv

emen

t.

Non

scie

ntifi

c

Non

scie

ntifi

c

The

ove

rall

succ

ess

rate

, mea

sure

d in

term

sof

ret

entio

n ra

tes,

was

54 p

erce

nt. E

mpl

oy-

abili

ty v

arie

d by

age

—le

ss th

an h

alf o

f tho

seov

er 4

5 ye

ars

old

who

wer

e un

empl

oyed

mor

e th

an o

ne y

ear

foun

d jo

bs, w

hile

86

perc

ent o

f 25-

to 3

5-ye

ar-o

lds

did.

Litt

le im

pact

on

flow

s fr

om lo

ng-t

erm

unem

ploy

men

t.

No

data

on

cost

wer

eav

aila

ble.

The

num

ber

of w

orke

rs w

ho le

ftth

eir

jobs

was

fair

lyhi

gh: t

wo

year

s af

ter

com

plet

ing

trai

ning

only

60

perc

ent o

f the

men

and

66

perc

ent o

fth

e w

omen

wer

e st

illem

ploy

ed.

The

cos

t-ef

fect

iven

ess

of th

ese

prog

ram

s is

likel

y to

be

nega

tive.


Impr

ove

skill

s an

dpr

ovid

e be

tter

acc

ess

tojo

bs fo

r th

e lo

ng-t

erm

unem

ploy

ed in

Tilb

urg,

the

Net

her-

land

s (O

EC

D 1

993a

).

Job

trai

ning

pro

gram

sfo

r un

empl

oyed

and

disp

lace

d w

orke

rs in

the

Net

herl

ands

(O

EC

D

1994

b).

Une

mpl

oym

ent r

ates

fell

from

abo

ut 1

3pe

rcen

t in

the

earl

y19

80s

to b

elow

10

perc

ent b

y th

e en

d of

the

deca

de.

Une

mpl

oym

ent r

ates

fell

from

abo

ut 1

3pe

rcen

t in

the

earl

y19

80s

to b

elow

10

perc

ent b

y th

e en

d of

the

deca

de.

Tra

inin

g pr

ovid

edha

nds-

on e

xper

ienc

e(t

hrou

gh a

sim

ulat

edw

orks

hop)

. The

em

pha-

sis w

as o

n te

chni

cal

skill

s (m

etal

wor

king

,w

oodw

orki

ng, i

nsta

lla-

tion

tech

niqu

es, a

ndap

pare

l tra

des)

as w

ell

as o

n go

od w

ork

habi

ts.

Cou

rses

ran

from

4 to

10 m

onth

s.

Cen

ters

for

adul

t voc

a-tio

nal t

rain

ing.

Non

scie

ntifi

c

Qua

si-

expe

rim

enta

l

In 1

991,

of t

he 8

2in

divi

dual

s enr

olle

d in

the

cour

se, 5

2 co

m-

plet

ed it

and

41

foun

djo

bs o

r wen

t on

for

furt

her e

duca

tion.

The

mos

t suc

cess

ful t

rain

ing

was

in m

etal

wor

king

.

Une

mpl

oyed

peo

ple

who

wer

e no

t in

the

prog

ram

foun

d jo

bs a

squ

ickl

y as

thos

e w

how

ere.

Eve

n tw

o ye

ars

late

r, th

e em

ploy

men

tsi

tuat

ion

for

the

two

grou

ps w

as n

ot s

igni

fi-ca

ntly

diff

eren

t.

Tra

inin

g w

as q

uite

expe

nsiv

e: a

nnua

lfu

ndin

g of

the

pro-

gram

was

abo

ut $

7.5

mill

ion,

or

$10,

000

per

trai

nee.

No

data

wer

e av

aila

ble

on w

ages

and

cos

ts,

but t

rain

ing

seem

s to

have

bee

n in

effe

ctiv

e in

term

s of

incr

easi

ngth

e em

ploy

abili

ty o

fpa

rtic

ipan

ts.

Not

e: JS

A, j

ob s

earc

h as

sist

ance

; OJT

, on-

the-

job

trai

ning

.


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