Press Release

New Findings Show That WorkAdvance Sectoral Training and Advancement Program Boosts Earnings for Low-Income Workers

06/2016

Contact: John Hutchins, MDRC, 212-340-8604, john.hutchins@mdrc.org

(New York, June 28, 2016) — MDRC, a nonprofit, nonpartisan education and social policy research firm, released encouraging results today from a demonstration and evaluation of WorkAdvance, a sectoral training and advancement program tested in four sites in New York City, Northeast Ohio, and Tulsa, Oklahoma. Each targeting different sectors, the four programs provided sector-based skills training for jobs that have career ladders or pathways in information technology (IT), environmental remediation, transportation, manufacturing, and health care. Together the four WorkAdvance sites helped participants earn an average of 14 percent (or nearly $2,000 in annual income) more than they otherwise would have earned two years after they entered the program. The effects differed by site, ranging from no earnings gain in one site to a 26 percent increase in the most effective site.

These results confirm earlier studies that sectoral programs increase earnings among low-income individuals. Even when a program is well implemented, however, the benefits to participants can take at least a year to emerge for experienced providers and longer for those that are new to the sectoral strategy.

WorkAdvance is part of the New York City Center for Economic Opportunity (CEO) Social Innovation Fund (SIF) project, which is led by CEO and the Mayor’s Fund to Advance New York City in collaboration with MDRC. Administered by the Corporation for National and Community Service, the SIF is a public-private partnership designed to identify and expand effective solutions to critical social challenges. Funding for the WorkAdvance program and evaluation came from the SIF and a broad array of local funding partners.

What Is WorkAdvance?

Even in good economic times, many adults — particularly individuals with no more than a high school education — struggle to obtain and maintain jobs that pay enough to support their families and permit upward mobility. At the same time, some employers report difficulty finding employees with the right skills to meet their needs. WorkAdvance is an alternative to more traditional training programs that have had trouble successfully serving low-income populations.

The theory behind WorkAdvance is that investments in human capital — that is, education and employment-related skills and experience — in growing industries with rising demand for skilled workers will eventually lead to advancement in the labor market. WorkAdvance offers formal training and industry-recognized certifications, and it requires providers to be far more employer-focused than traditional training programs, taking into account multiple employers’ human resource needs.

WorkAdvance has five major components: (1) screening of program applicants before enrollment to ensure that participants can take advantage of the skills training, (2) sector-appropriate preemployment and career readiness services, (3) sector-specific occupational skills training, (4) sector-specific job development and placement services, and (5) postemployment retention and advancement services, provided to assist participants beyond the placement stage.

Expenditures for the operation of WorkAdvance ranged from $5,200 to $6,700 per participant at the four providers delivering the program.

What Did the Study Find?

MDRC conducted a rigorous random assignment study of WorkAdvance in four sites: Per Scholas (in New York City) targeted the IT sector; St. Nicks Alliance (also in New York City) focused on environmental remediation; Madison Strategies Group (in Tulsa, Oklahoma) focused on transportation and, later, manufacturing; and Towards Employment (in northeast Ohio) targeted health care and manufacturing. The two-year follow-up results released today in a summary report are based on unemployment insurance records and a survey, and conclude that WorkAdvance:

  • Increased training completion, credential acquisition, and sector employment. Overall, because of WorkAdvance, participants were more likely to complete skills training and acquire a credential (especially in the targeted sector) than they would have been without access to the program. For example, in each of the four sites, participants were more likely than the control group to complete training by 31 percentage points or more. They were also more likely to attain a vocational training credential in the targeted sector by 25 percentage points or more. At all four sites, participants were more likely to become employed in a job in the targeted sector, by 12 percentage points (St. Nicks) to 41 percentage points (Per Scholas).

  • Increased earnings in three of four sites. The most experienced sectoral provider, Per Scholas, boosted earnings by more than $3,700 (or 26 percent) above the control group level in Year 2. The Per Scholas program also increased income, reduced material hardship, reduced public assistance usage, and increased overall life satisfaction. At Madison Strategies Group and Towards Employment, statistically significant impacts on earnings began to emerge in Year 2. Earnings effects were also substantially larger for a later cohort, partially reflecting the deepening experience of these two agencies with what, for them, was a new approach. At St. Nicks Alliance, impacts on earnings had not yet emerged by Year 2.

  • Increased earnings among the long-term unemployed. WorkAdvance operated during the long wake of the Great Recession of 2007-2009. During this period, the number of people who qualified as long-term unemployed increased markedly, and there was significant concern about the likelihood of reengaging this group in the labor market. On average, WorkAdvance was able to increase earnings for this important group.

“These encouraging findings from WorkAdvance, which demonstrate that skills training can provide a route to upward mobility, have particular relevance to implementation of the Workforce Innovation and Opportunity Act (WIOA), which incorporates a strong sectoral focus, an emphasis on career pathways, and a focus on disadvantaged populations,” said Gordon Berlin, MDRC President. “The federal government, local Workforce Investment Boards, and city and state government leaders should consider these findings when putting WIOA into practice.”

“New York City is committed to finding the most effective ways to connect low-income and unemployed workers to high-quality jobs that have a pathway to long-term career advancement and financial stability,” said Matt Klein, CEO Executive Director. “The success of this project shows that cities, in partnership with researchers and private funders, can be engines for developing innovative solutions to this workforce challenge. We are thrilled that WorkAdvance has succeeded at improving earnings for hundreds of low-income participants, including for the long-term unemployed. We will use the results to continue to improve the city’s efforts to help low-wage workers, and we hope the findings inform national efforts to improve outcomes for families and reduce inequality.”

“When the Social Innovation Fund was launched, we set a goal to find solutions that work and make them work for more people,” said Wendy Spencer, CEO of the Corporation for National and Community Service, the federal agency that administers the Social Innovation Fund. “Six years later, I am proud to talk about the extraordinary impact these programs are having, and I am grateful to the Mayor’s Fund to Advance New York City and the New York City Center for Economic Opportunity for helping us bring that promise to light. WorkAdvance is a great example of what is possible when we find something that works and invest in its success.”

“The Mayor’s Fund to Advance New York City is pleased to see that WorkAdvance has helped improve earnings for low-income workers,” said Darren Bloch, Executive Director of the Mayor’s Fund to Advance New York City. “As a key part of Mayor de Blasio’s effort to combat income inequality, the Mayor’s Fund is working on several fronts to identify better and smarter ways to connect New Yorkers to long-term job prospects, and the impacts from WorkAdvance show that sector strategies focused on quality jobs and career pathways can work. This research comes as the de Blasio Administration continues to pursue a career pathways strategy to connect all New Yorkers with quality jobs through training and employer partnerships. We look forward to ensuring that this evidence helps shape programming and policy in New York City and beyond.”

What’s Next for WorkAdvance?

The preview summary released today will be followed by a full report detailing the two-year findings in August 2016. Later this year, a publication for practitioners will be released. Further follow-up is planned to see whether the effects of WorkAdvance grow over time — as is a full benefit-cost analysis.

*             *             *

Headquartered in New York City and Oakland, CA, MDRC is a nonprofit, nonpartisan research organization with more than 40 years of experience designing and evaluating education and social policy initiatives.

The Mayor’s Fund to Advance New York City is a 501(c) (3) nonprofit organization that serves as the primary vehicle for New York City’s business, foundational, and philanthropic communities to engage city government, contribute to public programs, and enhance our city’s ability to serve its residents. Chaired by First Lady Chirlane McCray, the Mayor’s Fund’s current areas of focus include mental health, youth workforce development, and immigration and citizenship.

The Center for Economic Opportunity (CEO) fights the cycle of poverty in New York City through innovative programs that build human capital and improve financial security. Launched by the Office of the Mayor in 2006, CEO works with both City agencies and the federal government to implement successful antipoverty initiatives in New York and partner cities across the United States.

The Social Innovation Fund (SIF) unites public and private resources to evaluate and grow innovative community-based solutions with evidence of results. The Social Innovation Fund is a program of the Corporation for National and Community Service, a federal agency that engages more than 5 million Americans in service through its AmeriCorps, Senior Corps, Social Innovation Fund, and Volunteer Generation Fund programs, and leads the President’s national call to service initiative, United We Serve. The SIF invests in three priority areas: economic opportunity, healthy futures, and youth development.