The Treasury

Global Navigation

Personal tools

Treasury
Publication

Adult literacy and economic growth - WP 04/24

6.2  Employment-related training programmes

Governments in many countries fund training programmes to help low-skilled, disadvantaged people find employment and raise their earnings. These programmes typically include one or more of the following components: remedial education (primarily basic literacy training and, in the United States, GED preparation[31]), vocational training, wage and employment subsidies, short-term work experience, and job search assistance. In the United States, a number of these programmes have been subject to intensive evaluations (Heckman et al 1999a).

Programmes in the United States can usefully be divided into mandatory and voluntary programmes (Friedlander, Greenberg and Robins 1997). Mandatory programmes are aimed at welfare recipients: participation is the quid pro quo for receiving a benefit. These are often known as welfare-to-work programmes, of which the primary national programme is the Job Opportunities and Basic Skills Training (JOBS) programme which began in 1989. California’s Greater Avenues for Independence (GAIN) programme pre-dated JOBS but effectively became that state’s JOBS initiative from 1989 onwards. Across sites, JOBS programmes differ according to whether they emphasise education as the first step for most participants or whether they emphasise getting people into work as soon as possible. Voluntary programmes provide training for people who apply and meet certain criteria of need such as having income below a certain level or lacking a high school diploma. The primary national programme in the United States is the Job Training Partnership Act (JTPA) programme which began in 1982.

The JOBS, GAIN and JTPA programmes have been subject to experimental evaluations. The key reports of these evaluations, however, concentrate on the impact of participation compared to non-participation, rather than the impact of basic skills training in isolation. The following sections, however, look for evidence that low-skilled people who undertook adult education reaped benefits in terms of employment, earnings or literacy skills.

6.2.1  Mandatory programmes

The National Evaluation of Welfare-to-Work Strategies (NEWWS) looks at the impacts of 11 welfare-to-work programmes, all of which began as JOBS initiatives. NEWWS randomly assigned welfare recipients (predominantly women) to either participating in the programme or to a control group. As part of this evaluation, Bos, Scrivener, Snipes, Hamilton, Schwartz and Walter (2002) look at the experiences of participants in three programmes who lacked a high school diploma or a GED at the time of assignment. Both the treatment and the control group were tested after two years using the Test of Applied Literacy Skills (TALS) document literacy test, which is very similar to the IALS document literacy test. Receipt of a GED was also recorded. The three programmes achieved modest impacts on GED receipt during a two-year follow-up period, but no impact on measured reading and maths skills. After two years, 10.6% of treatment group members (pooled across the three programmes) had received a GED compared to only 3.6% of control group members. Mean scores on the TALS document literacy scale, however, were almost identical for the treatment group and the control group (250 compared to 249). A total of 26.2% of the treatment group were in Level 1 of TALS compared to 24.9% of the control group: again, this difference was not statistically significant. Bos et al do not report differences in earnings or employment for the treatment or the control group.[32]

California’s state-wide Greater Avenues for Independence (GAIN) programme began in 1986 and emphasised education as the way into paid employment. The GAIN evaluation, conducted in the late 1980s, randomly assigned welfare recipients to either participating in the programme or to a control group. Martinson and Friedlander (1994) look at the experiences of more than 2,500 participants – treatments and controls – who were assessed at programme entry as needing basic education. Data were available from five counties in the evaluation. Both the treatment and the control group were tested after two-to-three years using the TALS document and quantitative literacy tests. Receipt of a GED over this period was also recorded. As with the NEWWS evaluation, GAIN was reasonably successful in raising GED receipt but not in raising measured literacy skills, with the exception of San Diego County (Table 6).

Table 6– GAIN’s impact on GED receipt and TALS test scores, for people assessed as needing basic education
CountySample sizeTreatment groupControl groupDifference
Percentage who had received a GED or high school diploma over two-to-three years
Alameda466 8.91.27.7***
Los Angeles389 2.70.52.2*
Riverside582 6.23.62.6
San Diego380 6.82.64.2*
Tulare441 20.81.819.0***
All counties2,258 9.12.07.1***
TALS score, document plus quantitative, after two-to-three years
Alameda334 4824802.3
Los Angeles186 4494453.7
Riverside233 488507-19.0*
San Diego114 48845433.8**
Tulare248 468478-10.2
All counties1,115 4754731.8

Statistical significance levels are indicated as *** = 1%; ** = 5%; * = 10%.

The data in this table is restricted to single parents, mostly women, who made up the majority of GAIN participants.

The ‘all counties’ estimate is the average of the county estimates, with each county weighted equally.

The standard deviation of TALS scores was around 100.

Source: Martinson and Friedlander (1994) Tables 2 and 3.

Standout performers in terms of raising GED receipt were Alameda and Tulare Counties. In San Diego, the GAIN programme produced a considerable (around a third of a standard deviation), and statistically significant, impact on TALS scores. In Riverside County, people in the treatment group performed worse on TALS than people in the control group, although this result was only marginally significant. Overall, the GED impacts and improvements in literacy skills associated with GAIN were concentrated amongst those individuals who were the most literate when they first entered the programme.

Over the follow-up period studied by Martinson and Friedlander, the treatment group in Riverside County earned significantly more than the control group, but this was not the case in the other four counties. Freedman, Friedlander and Riccio (1993) extend this analysis by estimating the three-year impacts on earnings in the GAIN evaluation. For people assessed as requiring basic education, Freedman et al find statistically significant earnings increases in Riverside and in Tulare County, but not in the other three counties.[33] The earnings impact in Riverside, in particular, was high: the treatment group’s average earnings over three years were 59% higher than the control group’s earnings (Heckman et al 1999a) Table 23. Notably, Riverside and Tulare were the two counties where the literacy skills of treatment group members appeared to decline compared to the controls. (Table 6). Conversely, the San Diego GAIN programme had a considerable impact on literacy skills but not on earnings. Both Freedman et al and Martinson and Friedlander comment that Riverside stood out amongst the other sites as having a emphasis on quickly moving participants into employment.

6.2.2  Voluntary programmes

The National JTPA study randomly assigned nearly 21,000 JTPA applicants at 16 sites to either participating in JTPA or to a control group. Random assignment occurred after each person was assessed as requiring a particular type of service. Of the people assessed as needing classroom training, those in the treatment group had higher total earnings over the 30-month follow-up period than those in the control group (ranging from 1.6% to 8.9% depending on gender and age) but none of these differences were statistically significant (Bloom, Orr, Bell, Cave, Doolittle, Lin and Bos 1997a). In both groups earnings increased over time. The education component of JTPA did appear, however, to have an effect on educational attainment. Of those people in the sample who were high school dropouts at programme entry, a significantly greater proportion obtained a high school diploma or a GED after the 30-month follow-up period. For adult women, for example, 32% of dropouts in the treatment group had attained a GED, compared to 20% of the control group.

The Washington Workforce Training Study (described in Beder 1999)[34] looks at the short- and medium-term labour market outcomes for jobseekers in adult basic skills programmes in Washington State. A matched comparison group of jobseekers who had not participated in a basic skills programme was also constructed. In both the short term, and the medium term, participants in the adult basic skills programmes were in fact less likely than people in the comparison group to be employed (45.7% compared to 49.5% after three years). Participating in an adult literacy programme was found to have a small positive short-term effect on hourly earnings but no medium-term effect. Participating in such a programme did, however, have a positive effect on the number of hours a person worked (measured over a three-month period) and therefore on total earnings.

6.3  Workplace literacy programmes

There are very few quantitative studies of workplace literacy programmes, not least because firms appear reluctant to admit researchers. In any event, small sample sizes can be an issue, since programmes often put relatively few people through training and this training is highly tailored to the individual workplace. Tailored training programmes also mean that appropriate measures of progress need to be designed: ‘off-the-shelf’ tests of literacy skills, for example, are likely to be inappropriate in a workplace setting (Mikulecky and Lloyd 1996).

Krueger and Rouse (1998) have conducted the most rigorous quantitative evaluation of a workplace literacy programme, concentrating on improvements in earnings and productivity. They look at the impact of a programme for low-skilled workers in a manufacturing company and in a service company, both in New Jersey. After controlling for differences between participants and non-participants, Krueger and Rouse find only small effects of the programme on all measured outcomes. The follow-up period was, however, relatively short. In the manufacturing company, workers who attended literacy training had slightly higher wage growth than non-trainees, and the trainees were more likely to get an internal promotion. In the service company, however, the literacy programme had no significant effect on wage growth, although there was some evidence that literacy trainees were more likely to be nominated, and to win, a performance award. In both companies, workers who participated in training were neither more nor less likely to have left the firm after training. Krueger and Rouse estimate that, for the manufacturing firm at least, the benefits of the training programme in terms of increased productivity probably outweigh the costs. The costs to the firm, however, were only around a half of the total cost of the training programme, with the remainder being paid for by the federal government.

Notes

  • [31]The General Educational Development certificate is a second-chance qualification for adults in the United States which is equivalent to a high school diploma.
  • [32]The NEWWS study as a whole (Hamilton, Freedman, Gennetian, Michalopoulos, Walter, Adams-Ciardullo, Gassman-Pines, McGroder, Zaslow, Ahluwalia, Brooks, Small and Ricchetti 2001) did find that participants in the seven education-focused programmes increased their earnings but that this effect diminished over time so that by the end of the fifth year of follow-up, earnings were not statistically different from those of the control group. The three employment-focused programmes appeared to be slightly more effective than the education-focused programmes, and cheaper to run, but the most effective programme by far was in Portland. This programme used both job search and short-term training approaches and emphasised people holding out for a good job, not just any job.
  • [33]They also find a statistically significant earnings impact in Butte County, which was the one GAIN site not included in Martinson and Friedlander (1994).
  • [34]The actual report of this study, the Washington State Training and Education Coordinating Board (1997), could not be located.
Page top