These initiatives aim to connect workers with quality jobs and support local industry. To ensure that investments meet these goals, states should direct funds to evidence-based sectoral employment programs, which train job seekers to work in specific industries with strong labor demand and opportunities for career growth.
Effective workforce development policy is especially critical against today’s backdrop of persistent wage inequality, particularly for workers without college degrees, as well as skill shortages in key industries. It is increasingly difficult for non-college-educated workers to gain employment in high-paying occupations with career advancement opportunities. Black, Hispanic and female workers disproportionately experience low wage mobility.
At the same time, critical industries including construction and automotive are at risk of labor shortages. Newly created manufacturing jobs are at risk of going unfilled due to skills gaps. Ideally, workforce development programs will address these dual challenges: supporting the economic mobility of workers while simultaneously meeting the skills needs of in-demand industries.
Sectoral employment programs stand out for their proven ability to produce and sustain significant wage gains for participants. Randomized evaluations — the most rigorous method to assess the impact of a program — show that these programs consistently increased participant earnings by an impressive 12 to 34 percent.
Participants are typically low-income adults and workers with non-traditional backgrounds (those whose educational and/or training background is different from traditional expectations for their role). The most effective programs include upfront screening of applicants on basic skills and motivation along with occupational skills training leading to an industry-recognized certificate, non-technical career readiness training (including “soft skills” training in areas such as time management and conflict resolution), wraparound support services and strong connections to employers.
As one example, Massachusetts Gov. Maura Healey’s administration awarded $1 million to the Greater Boston location of Per Scholas, a nonprofit specializing in tuition-free IT training, through the Massachusetts Workforce Competitiveness Trust Fund. A randomized evaluation of the Per Scholas model in the Bronx found that earnings increases from the program persisted several years later, with program participants earning approximately 20 percent more. The Healey administration’s investment in a proven model is aligned with the state’s comprehensive Workforce Agenda, which highlights sector pathway models.
Other governors should follow this lead by directing workforce development investments to proven sectoral employment program models and embedding evidence-based approaches in their strategic plans. In doing so, they would be getting out ahead of a possible federal mandate: Legislation has been introduced in both houses of Congress that would require states’ workforce development plans to prioritize funding for job programs that are evidence-based.
Regardless of whether this bill becomes law, leveraging the rigorous evidence on sectoral employment programs can help state policymakers ensure that their public investments actually improve job opportunities and incomes for their constituents while meeting the needs of their local in-demand industries.
Kimberly Dadisman is the associate director of policy at J-PAL North America, a regional office of the Abdul Latif Jameel Poverty Action Lab, which is a global research center based at the Massachusetts Institute of Technology whose mission is to reduce poverty by ensuring that policy is informed by scientific evidence.
Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
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