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Workforce Development as an Antipoverty Strategy: What Do We Know? What Should We Do?


  • Holzer, Harry J.

    () (Georgetown University)


In this paper I note the basic paradox of workforce development policy: that, in an era in which skills are more important than ever as determinants of labor market earnings, we spend fewer and fewer public (federal) dollars on workforce development over time. I present trends in funding and how the major federal programs at the Department of Labor and other agencies have evolved over time, noting the dramatic declines in funding (with the exception of Pell grants). I then review what we know about the cost-effectiveness of programs for adults and youth from the evaluation literature. I consider some other possible reasons for funding declines, such as the notion that other approaches (like supplementing the low earnings of workers with tax credits or early childhood programs) are more effective and address more serious problems. I review some newer developments in workforce policy, mostly at the state and local levels, and then conclude with some policy recommendations.

Suggested Citation

  • Holzer, Harry J., 2008. "Workforce Development as an Antipoverty Strategy: What Do We Know? What Should We Do?," IZA Discussion Papers 3776, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp3776

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    References listed on IDEAS

    1. Peter Z. Schochet & Sheena McConnell & John Burghardt, "undated". "National Job Corps Study: Findings Using Administrative Earnings Records Data," Mathematica Policy Research Reports 9da2c5a07ad046419448e94e1, Mathematica Policy Research.
    2. Peter R. Mueser & Kenneth R. Troske & Alexey Gorislavsky, 2007. "Using State Administrative Data to Measure Program Performance," The Review of Economics and Statistics, MIT Press, vol. 89(4), pages 761-783, November.
    3. James J. Heckman, 2008. "Schools, Skills, And Synapses," Economic Inquiry, Western Economic Association International, vol. 46(3), pages 289-324, July.
    4. repec:mpr:mprres:3655 is not listed on IDEAS
    5. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2006. "The Polarization of the U.S. Labor Market," American Economic Review, American Economic Association, vol. 96(2), pages 189-194, May.
    6. James J. Heckman & Paul A. LaFontaine, 2010. "The American High School Graduation Rate: Trends and Levels," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 244-262, May.
    7. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
    8. Dynarski, Susan & Scott-Clayton, Judith, 2007. "College Grants on a Postcard: A Proposal for Simple and Predictable Federal Student Aid," Working Paper Series rwp07-014, Harvard University, John F. Kennedy School of Government.
    9. Robert J. LaLonde, 2003. "Employment and Training Programs," NBER Chapters,in: Means-Tested Transfer Programs in the United States, pages 517-586 National Bureau of Economic Research, Inc.
    10. V. Joseph Hotz & Guido W. Imbens & Jacob A. Klerman, 2000. "The Long-Term Gains from GAIN: A Re-Analysis of the Impacts of the California GAIN Program," NBER Working Papers 8007, National Bureau of Economic Research, Inc.
    11. Christopher J. O'Leary & Robert A. Straits & Stephen A. Wandner, 2004. "U.S. Job Training: Types, Participants and History," Book chapters authored by Upjohn Institute researchers, W.E. Upjohn Institute for Employment Research.
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    Cited by:

    1. Marchand, J. & Smeeding, T., 2016. "Poverty and Aging," Handbook of the Economics of Population Aging, Elsevier.
      • Marchand, Joseph & Smeeding, Timothy, 2016. "Poverty and Aging," Working Papers 2016-11, University of Alberta, Department of Economics, revised 20 Nov 2016.
    2. Andreason, Stuart & Carpenter, Ann, 2015. "Fragmentation in workforce development and efforts to coordinate regional workforce development systems," FRB Atlanta Community and Economic Development Discussion Paper 2015-2, Federal Reserve Bank of Atlanta.

    More about this item


    workforce development; poverty;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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