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Training programs for displaced workers: what do they accomplish?

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  • Yolanda K. Kodrzycki
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    Abstract

    A consensus appears to be building that the extensive structural changes taking place in the U.S. economy warrant the expansion of government programs to assist displaced workers. Training in particular is seen as a vital part of the adjustment process. Although the "problem" is real, findings regarding the appropriate solution are murky. Research on existing training programs fails to show that they enable workers to achieve higher pay at their new jobs. Less expensive government interventions such as assistance in identifying and applying for job openings may be just as effective as training.> This article provides further analysis of the effects of training programs for displaced workers. It offers evidence on which types of workers are likely to train, and on whether trainees make bigger or better job changes than non-trainees, using information on a large number of displaced workers from Massachusetts who sought government-provided reemployment assistance in the early 1990s. The author points out some limitations of previous research with respect to evaluating how training programs affect reemployment pay. She argues that occupational changes by displaced workers may lead to some long-term benefits not captured in the studies to date, and that these occupational changes may be more pronounced for workers who have gone through training programs.

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    Bibliographic Info

    Article provided by Federal Reserve Bank of Boston in its journal New England Economic Review.

    Volume (Year): (1997)
    Issue (Month): May ()
    Pages: 39-57

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    Handle: RePEc:fip:fedbne:y:1997:i:may:p:39-57

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    Related research

    Keywords: Displaced workers;

    References

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    1. Murphy, Kevin M & Topel, Robert H, 1985. "Estimation and Inference in Two-Step Econometric Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(4), pages 370-79, October.
    2. Robert J. LaLonde, 1995. "The Promise of Public Sector-Sponsored Training Programs," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 149-168, Spring.
    3. Ann P. Bartel, 1995. "Training, Wage Growth and Job Performance: Evidence From a Company Database," NBER Working Papers 4027, National Bureau of Economic Research, Inc.
    4. Yolanda K. Kodrzycki, 1995. "The costs of defense-related layoffs in New England," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 3-23.
    5. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-20, September.
    6. Paul Decker & Walter Corson, 1995. "International trade and worker displacement: Evaluation of the Trade Adjustment Assistance Program," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(4), pages 758-774, July.
    7. Bartel, Ann P, 1995. "Training, Wage Growth, and Job Performance: Evidence from a Company Database," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 401-25, July.
    8. John H. Bishop, 1996. "Is the market for college graduates headed for a bust? Demand and supply responses to rising college wage premiums," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 115-138.
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    Cited by:
    1. Cavaco, Sandra & Fougère, Denis & Pouget, Julien, 2008. "Estimating the Effect of a Retraining Program on the Re-Employment Rate of Displaced Workers," CEPR Discussion Papers 7094, C.E.P.R. Discussion Papers.
    2. Lori G. Kletzer, 1998. "Job Displacement," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 115-136, Winter.
    3. Yolanda K. Kodrzycki, 2007. "Using unexpected recalls to examine the long-term earnings effects of job displacement," Working Papers 07-2, Federal Reserve Bank of Boston.

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