Lower-skilled workers face a shrinking pool of employment opportunities. To combat this, the city of New Orleans developed a job training program that helped these individuals train for and find skilled jobs in particular industries. The authors of this report examine that program's implementation and effectiveness and perform a cost-benefit analysis. Findings include improved wage growth and a positive return on investment.

Cover: Effectiveness of Screened, Demand-Driven Job Training Programs for Disadvantaged Workers
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Effectiveness of Screened, Demand-Driven Job Training Programs for Disadvantaged Workers

An Evaluation of the New Orleans Career Pathway Training

by Matthew D. Baird, John Engberg, Gabriella C. Gonzalez, Thomas Goughnour, Italo A. Gutierrez, Rita T. Karam

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Research Questions

  1. How was the Career Pathways program implemented?
  2. How was the program experienced, both by trainees and hiring firms?
  3. How did the various modes of screening applicants affect training completion rates?
  4. What were the program's effects on employment and earnings?
  5. What were the program's effects on job duration, job satisfaction, and arrests?
  6. Were there differences in program effects by age, gender, baseline employment and earnings, or targeted industry?
  7. What were the program's overall costs and benefits, and the resulting return on investment?

Lower-skilled workers in the United States face a shrinking pool of employment opportunities. To combat this, the city of New Orleans' Office of Workforce Development (OWD) developed a job training program with a grant, awarded in 2014, from the U.S. Department of Labor Workforce Innovation Fund. The program, Career Pathways, was designed to help lower-skilled, unemployed, and underemployed individuals train for and find skilled jobs in the fields of advanced manufacturing and energy, medical care, and information technology.

The authors of this report examine that program's implementation and effectiveness and perform a cost-benefit analysis using a randomized controlled trial design. They found that the program created strong, valuable partnerships among OWD, training providers, and employers. Of all screening mechanisms used to select trainees, the Test of Adult Basic Education was most likely to identify applicants who were likely to complete the training program, whereas screening by community partners was least successful. Some aspects of program implementation needed strengthening, such as the provision of hands-on work experience and the distribution of supplementary benefits to trainees.

The team found that the Career Pathways program produced meaningful, positive results in several areas. These included individuals' wage growth, job satisfaction, and the program's return on investment. There were also areas that had no significant change, such as arrest rates, likelihood of employment, and the duration of trainees' employment.

Key Findings

Positive returns on investment in the Career Pathways program were realized after several years and changes to the program

  • Partnerships between stakeholders — OWD, trainees, and employers — were key.
  • There were difficulties in having small local partners or firms in feeder industries conduct prescreening for job training.
  • Employers valued trainees' program experience.
  • Trainees expressed a desire for more hands-on experience, and both trainees and employers wanted more flexibility and "soft skills" in training.
  • Communication of program benefits to trainees, job counseling, and employer engagement could be improved.
  • Participation and completion rates were relatively high, and individuals in the training group who completed the program went on to obtain higher earnings.
  • Trainees in the health care pathway had the greatest increase in earnings.
  • There were no overall effects of the program on the likelihood to be employed or job duration.
  • Trainees' overall job satisfaction improved.
  • There was insufficient evidence of program effects on arrests.
  • Those who entered training with the lowest earnings and those who were not working had the largest earnings increases over their counterparts in the control group.
  • Screening interviews were not necessarily effective, while the Test of Adult Basic Education showed the most promise both for identifying those likely to complete training and those most likely to benefit from training.

Recommendations

  • Consider more intentionally deploying two- to four-month job training programs for unemployed and low-income individuals.
  • Incorporate hands-on practice and classroom instruction when feasible.
  • Ensure that training programs are connected to local demand and that there are strong industry partnerships, as well as sustainable partnerships between government and nongovernment entities.
  • Be agile when responding to an evolving job market; flexibility is key to appropriately respond to shifts in local labor demand.
  • It is important to examine nonwage outcomes as well as wage and employment benefits of a program for trainees to understand potential gains made in such areas as job satisfaction.
  • Take time to get it right, and have patience when seeking investment returns.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Data Sources and Collection Methods

  • Chapter Three

    Implementation Analysis

  • Chapter Four

    Outcomes Analysis

  • Chapter Five

    Cost-Benefit Analysis

  • Chapter Six

    Discussion of Findings

  • Chapter Seven

    Conclusion

  • Appendix A

    Implementation Analysis Methodology

  • Appendix B

    Outcome Analysis Methodology

  • Appendix C

    Cost-Benefit Study Methodology

Research conducted by

This report was funded with federal funds under a grant awarded by the U.S. Department of Labor's Employment and Training Administration and conducted by RAND Education and Labor.

This report is part of the RAND Corporation Research report series. RAND reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

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