An Econometric Model for the Evaluation of Manpower Programs

This paper describes a method for evaluating manpower programs by using a standard control group and a simple econometric model. It illustrates how this procedure was used to evaluate the performance of employment counselors in the State of California. Because it is difficult, costly, and time-consuming to set up unique control groups for each evaluative study, the author recommends the use of a single national control group, such as the Income Dynamics Panel (IDP) of the University of Michigan’s Survey Research Center. By fitting IDP data on age, sex, race, education, family size, work history, etc., to the economic model in this study, it was possible to estimate the employment a client could have expected had he not joined the program and thus to calculate his net income gain from participating in it. The technique also allows interim program evaluation when a client is placed, thereby eliminating the need for subsequent follow-up before any evaluation can be made.