Sunday, February 21, 2021

Harry Holzer on post-pandemic workforce policy

Today brings a new Hamilton Project paper on post-pandemic workforce policy from Harry Holzer:


Workforce development in the United States today is spread across higher education institutions (primarily public two-year and for-profit colleges), labor market institutions, and workplaces, with public funding from a range of sources. But outcomes for students and workers are weaker than they could be, especially among disadvantaged students and displaced workers; funding for workforce development programs is insufficient and not always effective. I propose the following changes: (1) Implement reforms and additional funding in the Higher Education Act of 1965 (HEA) for postsecondary occupational training for disadvantaged students. (2) Add modest taxes on worker displacement along with new funding for retraining. (3) Create a permanent version of the Trade Adjustment Assistance Community College and Career Training (TAACCCT) grants to fund partnerships among community colleges, workforce institutions, and states. Together, these actions would improve credential attainment and employment outcomes among the disadvantaged and employees at the risk of being displaced.

Harry and I disagree on several things (though we agree on more things than I would have expected when I started reading). I note only two points where we differ. First, we have different priors regarding how much of the earnings impacts of sectoral training programs in RCTs represents increased output. My prior would be about 0.2 while Harry's would be much higher. For some of the programs, views on this will affect the cost-benefit conclusion, as sectoral programs have non-trivial price tags. Second, we disagree on the virtue of wage insurance. My view can be summed up as "To those who had, more is given." 

But, as always with Harry's work, I learned a lot and thought some interesting thoughts. 

Read the whole thing here.