Managing Customers’ Training Choices: Findings from the Individual Training Account Experiment...

The Workforce Investment Act (WIA) requires the use of individual training accounts (ITAs, commonly known as vouchers) to fund training. Workforce agencies must balance customer choice with careful allocation of scarce resources. To provide evidence on the results of such balancing, the ITA experiment compared three ITA approaches: 1) structured choice (intensive, mandatory counseling with a higher voucher amount), 2) guided choice (some mandatory counseling with a lower voucher amount), and 3) maximum choice (counseling only at customer request with a voucher amount the same as in guided choice). WIA adult and dislocated worker customers eligible for training were randomly assigned to these three treatment groups in eight study sites. This report presents the relative impacts of the three approaches on customers’ employment and earnings, and compares.

Approach 1 (structured choice) costs the government about $1,400 more per customer eligible for training than Approach 2 (guided choice). Approach 3 (maximum choice) costs the government about $800 more per customer eligible for training than Approach. (Abstractor: Website staff)

Full publication title: Managing Customers’ Training Choices: Findings from the Individual Training Account Experiment - Final Report

"The ITA experiment suggests the following lessons for workforce investment agencies to consider in choosing an ITA approach. • It is Challenging to Implement ITA Approaches that Require Counselors to be Directive and to Ration Training Funds. Counselors were reluctant to play a directive role when required to do so under Approach 1. They nearly always deferred to customers’ preferences and rarely, if ever, denied customers their chosen training programs. Additionally, they did not ration funds effectively among Approach 1 customers. • When Counseling on Training Program Choice is Voluntary, Few Request it. Very few Approach 3 customers requested counseling after the ITA orientation. However, we do not know whether customers would request counseling if all counseling—including counseling that occurs prior to the determination of eligibility for ITA-funded training—were voluntary. Customers in the study sites already had participated in an average of about five hours of counseling before being determined eligible for ITA-funded training. • Mandatory Counseling Discourages Participation in ITA-Funded Training. Sixty-six percent of Approach 3 customers—who were not required to participate in any additional counseling after being found eligible for WIA-funded training— received an ITA compared with only 59 percent of Approach 2 customers—who were required to participate in counseling. • The ITA Approach Has Little Effect on the Overall Training Rate But Affects How Training is Financed. Overall, the ITA approach had little effect on the probability of customers participating in training over the 15-month follow- up period. However, Approach 3 customers were more likely than Approach 1 and 2 customers to use ITAs to fund their training. Approach 1 customers were less likely than Approach 2 and 3 customers to use personal savings or student loans to supplement the ITA in paying for training—the higher ITA award they typically received usually covered all their training expenses. • Mandatory Counseling Delays the Start of Training. Mandatory counseling under Approaches 1 and 2 delayed when customers could begin training by about two weeks. • The ITA Approach Can Affect the Duration of Training. Additional funding under Approach 1 lengthened the time customers participated in training over the 15-month follow-up period by about three weeks. • Counseling May Broaden the Set of Training Options Customers Consider. Compared to Approach 1 and 2 customers, Approach 3 customers, who were much less likely to receive counseling, typically considered fewer training programs" (p.xxvi-xxvii). (Abstractor: Author)

• Last Updated:
• Created:
• Resource Publication Date: 2006
• Author(s): McConnell, Sheena; Stuart, Elizabeth; Fortson, Kenneth; Decker, Paul, et al.
• Organizational Author(s): Mathematica Policy Research, Inc.; Social Policy Research Associates
• Funding Source: U.S. Department of Labor, Employment and Training Administration
• Resource Availability: Publicly available
• Posted by: Melissa Mack
• Posted in: Workforce System Strategies