Provide job training throughout the education system.
Encouraging economic growth to ensure a robust economy may do more than any other policy to reduce demand for safety-net programs. However, we must have a workforce prepared to benefit from the jobs created.
Labor force skills and human capital are crucial components of a well-functioning economy. The absence of a framework to connect workers to jobs stresses the safety-net system and can cause a general economic decline.
Incentives matter. Right now, funding for career and technical education (CTE) at all levels is poorly aligned to labor market demand. Individualizing funding and tying institutional funding to employment and wage outcomes will better align the incentives of the student, institution, and labor market.
Solving the Problems
Career and technical education (CTE) has the potential to offer students pathways into a range of high-growth and high-wage professions. High school and college CTE programs can be directly connected to students’ success upon graduation. Tying funding to successful outcomes encourages opportunities for students to acquire marketable skills through expanded technical pathways, apprenticeships, and work-based learning methods.
After examining evidence on the types of career programs, which students are taking advantage of them, and how well these programs reflect high-wage, high-skill, and high-growth jobs in a particular region, it becomes clear that the incentives for high school CTE programs are aligned with neither regional workforce demand nor the economic prospects of individual students.1Erin Davis Valdez and Sam Johnson, Mismatch? Aligning Secondary Career and Technical Education with Regional Workforce Demand (Texas Public Policy Foundation, 2020), 9, https://www.texaspolicy.com/wp-content/uploads/2020/05/2020-05-RR-Valdez-Johnson-NGT-CTE-Workforce-Demand-v2.pdf.
Thankfully, innovative solutions are springing from the ground up even as traditional policies undergo needed reform. But workforce training programs that implement these solutions meet with varying levels of support and face a number of challenges.
School districts are typically funded based on the number of students who attend their campuses. Rather than making student outcomes the standard of success, this model makes attendance and time spent studying a given subject in a classroom (known as “seat time”) the standard. Funding is not contingent on test scores, the satisfaction of families, reading or computational skills, career readiness upon graduation, or other learning-outcomes-based career readiness evaluations. School funding should be used to ensure that children will be able to find work after graduation.
Recently, bipartisan support has grown for transitioning the current funding model to a competency-based system.2Eliot Levine, “Competency-Based Education Across America,” CompetencyWorks blog, Aurora Institute, July 21, 2021, https://aurora-institute.org/cw_post/competency-based-education-across-america/. This form of outcomes-contingent funding emphasizes concept mastery and increases flexibility for students to advance through curricula at a pace individually suited to their needs. As a result, students will be better prepared to enter a dynamic labor market.
If policymakers prioritize student-centered CTE funding models, students and their families will be empowered to pursue post-secondary opportunities that suit their unique interests and needs while better preparing them for a successful future.
How to implement
- Produce a report on graduate outcomes of competency-based education (CBE) programs.
- Make administrative changes to expand virtual education options that allow students to master core concepts at their own pace.
- Remove regulatory obstacles that prevent businesses from leading partnerships with secondary and post-secondary public institutions.
- Create individual accounts to allow students to choose courses, work-based learning, and tutoring services to accelerate and personalize their education.
- Ensure that funding for vocational and CTE programs at the secondary and post-secondary levels are largely contingent on students’ post-graduation wage and employment outcomes.
Advanced Opportunities – Idaho.
Schools taking part in Idaho’s Advanced Opportunities.3Max Eden, Advanced Opportunities: How Idaho is Reshaping High Schools by Empowering Students (Manhattan Institute, 2020), https://www.manhattan-institute.org/reshaping-high-schools-empowering-students-idaho program provide each student with a learning fund from seventh grade onward. The fund can be used for career preparation such as industry certifications, dual enrollment, online courses beyond a full course load, and work-based learning.
Math Innovation Zones – Texas.
Math Innovation Zones allow students to participate in innovative blended-learning solutions, which help teachers assess students’ prior knowledge, create unique paths for each student, and adjust lessons based on student mastery.4Emily Sass, Erin Davis Valdez, and David Dunmoyer, Beyond Four Walls: How Competency-Based Learning Can Enhance Public Education (Texas Public Policy Foundation, 2021), 9, https://www.texaspolicy.com/wp-content/uploads/2021/02/Competency-Based-Learning.pdf.
While welfare programs can alleviate short-term material deprivation, employment and training (E&T) programs are intended to help vulnerable or low-skilled individuals build a meaningful and self-sufficient life. These employment- and training-focused social programs are intended to increase education and skills so that participants can obtain a job—ideally a better job that can support their household.
There are currently 43 employment and training programs.1U.S. Government Accountability Office, Employment and Training Programs: Department of Labor Should Assess Efforts to Coordinate Services Across Programs (U.S. Government Accountability Office, March 2019), https://www.gao.gov/assets/gao-19-200.pdf.Many of these programs overlap with one another, serving similar populations. Unfortunately, many current federally funded employment and training programs do not produce the employment outcomes2Government Employment and Training Programs: Assessing the Evidence on their Performance (U.S. Council of Economic Advisers, 2019), 3, https://trumpwhitehouse.archives.gov/wp-content/uploads/2019/06/Government-Employment-and-Training-Programs.pdf. that vulnerable or low-skilled participants would expect to obtain from participating in programming.
State policymakers can improve government employment and training programs by designating specific outcomes that must be met to continue receiving funding, and then implementing and supervising the performance of on-the-ground and community-based organizations.
How to implement
- Pass legislation to require an audit of all 43 federal employment and training programs and require entities to report the longitudinal employment and wage outcomes for participants. The programs will receive funding contingent on improving the wage and employment outcomes of individuals.
- Reform state-run programs to only contract with and pay contractors for clear, predefined, and measurable outcomes relating to job placement, earnings, and job retention.
- Make audit results publicly available.
Workforce Innovation and Opportunity Act. Congress has recognized that employment and training programs aren’t producing desired results and need increased accountability. In 2014, Congress authorized the Workforce Innovation and Opportunity Act (WIOA)3Workforce Innovation and Opportunity Act of 2014, Pub. L. 113-128, Stat. 1425 (2014), https://www.govinfo.gov/content/pkg/PLAW-113publ128/pdf/PLAW-113publ128.pdf. to replace the Workforce Investment Act of 1998 (WIA). This reform created a common performance accountability system for six core E&T programs. Despite that, in a 2019 report on government E&T programs, the White House Council of Economic Advisers concluded that “government job training programs appear to be largely ineffective and fail to produce sufficient benefits for workers to justify the costs.”4Government Employment and Training Programs, U.S. Council of Economic Advisers, 3.
Human Resources Administration/Department of Social Services – New York City.
In 1999, Mayor Rudy Giuliani helped transform New York City’s Department of Social Services employment and training contracts from fee-for-service into performance-based contracts. The new contracts incentivized the desired outcomes through payments based on the number of job placements. Within a year, the number of job placements doubled.5Swati Desai, Lisa Garabedian, and Karl Snyder, Performance-Based Contracts in New York City (Rockefeller Institute, 2012), 23, http://18.104.22.168/pdf/workforce_welfare_and_social_services/2012-06-Performance-Based_Contracts.pdf Mayor Bloomberg’s administration continued the outcome-based strategy and revised contracts to financially reward organizations for participant job retention. Under the new contract incentives, the percentage of individuals retaining jobs at 90 days doubled and 180-day retention increased more than five times.6Swati Desai, Lisa Garabedian, and Karl Snyder, History of Welfare-to-Work Performance-Based Contracts in NYC: Lessons Learned (2011), http://umdcipe.org/conferences/Moscow/papers/Desai_History%20of%20Welfare-to-work%20Performance-based%20Contracts%20in%20NYC_Lessons%20Learned.docx. (Page 7 and in figures 3 and 4)
Students need the option of an innovative post-secondary education system that prepares them for the challenges and opportunities of today’s job market. Our current higher education system lacks innovation, transparency, and accountability.
Many of those left with staggering student loan debt and disappointing employment prospects may doubt whether college is worth the burden. Indeed for around 100,000 college graduates each year, their earnings after graduation aren’t high enough to repay their student loans.1Andrew Gillen, “A Retrospective on Gainful Employment,” Academic Questions (forthcoming February 2022)
Student wage outcomes are already used as a basis for public funding of some post-secondary institutions. It’s time to expand this to make career-oriented post-secondary programs work for students by focusing on their job outcomes.
How to implement
- Pass legislation and make administrative changes to require state colleges to track student employment outcomes.
- Pass legislation and make administrative changes to fund state college systems primarily on student employment outcomes rather than enrollment. Following the example of TSTC, expand the return value funding model at the post-secondary level.
Texas State Technical College (TSTC) – Texas.
TSTC is a two-year institution with an emphasis on technical programs that lead to post-graduation employment. It partners with businesses, government agencies, and other educational institutions to coordinate career development routes for students. “We’re the only college in Texas whose funding depends on whether our graduates get jobs. So it’s important that we get more people like you into great-paying jobs in Texas.”2“TSTC | Texas State Technical College,” Home page, TSTC, accessed December 5, 2021, https://www.tstc.edu.
Notably, funding for TSTC depends on the workforce outcomes of its students as determined by annual wages five years after graduation. The college transitioned to outcomes-based funding after the 83rd Texas Legislature established the return value funding model in 2013.3General Appropriations Bill, SB 1, 83rd Texas Legislature, III.201.11, 459–60, (2013), https://lrl.texas.gov/scanned/83ccrs/sb0001.pdf.
Legislative support for similar competency-based education models will lead to equivalent or improved graduate employment outcomes compared to traditional programs, as a study by the Texas Public Policy Foundation attests.4Thomas K. Lindsay ,et al. Career and Financial Outcomes of Graduates of Competency-based Higher Education Programs (Texas Public Policy Foundation, 2018), 30, https://www.texaspolicy.com/wp-content/uploads/2018/08/2017-RR-08-CompetencyBasedEducationPart-I-CEF-GoldmanLindsay-SM.pdf.