Using Training Program Vouchers: The Individual Training Account Experiment

1
Using Training Program Vouchers The Individual
Training Account Experiment

• Sheena McConnell
• ACF/OPRE Welfare Research and Evaluation
  Conference
• June 4, 2007

2
Overview

• Background
• ITA Experiment
• Findings

3
Background
4
Why Use Training Vouchers?

• Promotes choice
• Promotes competition among training providers
• Reduces capacity constraints
• But ill-informed customers could make poor
  choices

5
History of Training Voucher Use

• Under JTPA (1982-1998), agencies mostly
  contracted for training slots
• Many agencies experimented with the use of
  training vouchers
• The Workforce Investment Act of 1998 required the
  use vouchers for most training

6
Individual Training Accounts

• Vouchers required by WIA are known as Individual
  Training Accounts or ITAs
• Training program chosen must be on Eligible
  Training Provider (ETP) list
• Consumer Report Systems provide information on
  programs
• Local agencies given flexibility on how to
  administer them

7
Best Way to Implement ITAs Unknown

• How much counseling should be required?
• Should counselors have the right to veto choices
  deemed inappropriate?
• Should the ITA have the same value for everyone?

8
ITA Experiment
9
Objectives

• Test three different approaches to administering
  ITAs
• Three approaches chosen so that include
• Approach most frequently used
• A more structured approach
• An approach that gives customers more choice

10
Approaches Tested
11
Research Questions

• How do the approaches compare in terms of
• Use of counseling
• Take-up of ITAs
• Training
• Employment and earnings

12
Evaluation Design

• Approaches tested side by side in eight sites
• Nearly 8,000 customers randomly assigned to one
  of three approaches
• Study tracking system
• 7,920 study participants
• 15-month follow-up survey
• 4,800 sampled
• 3,933 responded (82)
• UI state administrative records

13
Findings
14
Staff Struggled With Being Directive

• Approaches 2 and 3 implemented as designed
• Staff struggled to implement Approach 1
• Deferred to customers occupation preferences
• Did not steer to low-cost training
• Reluctant to deny funds

15
When Counseling is Voluntary, Customers Rarely
Request It
66
59
4
Source Study Tracking System. indicates
significantly different from Approach 2
16
Counseling Requirements Discourage Take-up of ITAs
66
59
58
Source Study Tracking System. indicates
significantly different from Approach 2
17
Highest Expenditures for Approach 1, Lowest
Expenditures for Approach 2
Source Study Tracking System. indicates
significantly different from Approach 2
18
No Effect on Overall Training Rates
66
64
64
Source 15-month survey. indicates
significantly different from Approach 2
19
Approaches Did Affect Timing of Training
Percentage in Training, by Quarter
Source 15-month survey. indicates
significantly different from Approach 2
20
No Effect on Overall Employment
81
80
79
Source 15-month survey. indicates
significantly different from Approach 2
21
Approaches Did Affect Timing of Employment
Percentage Employed, by Quarter
Source 15-month survey. indicates
significantly different from Approach 2
22
Earnings Impacts Similar to Employment Rates
Earnings
Source 15-month survey. indicates
significantly different from Approach 2
23
Little Effect on Job Characteristics

• Distribution of occupations was similar
• No differences in number of job quits, firings,
  or lay-offs
• Fewer A1 customers received fringe benefits
• Health insurance, paid time off, retirement

24
Summary

• Approaches 1 and 3 more costly to government than
  Approach 2
• Impacts on training and employment are minimal
• Counseling does not dramatically affect customer
  choices