The Low-Wage Labor Market: Challenges and Opportunities for Economic Self-Sufficiency. Job Creation for Low-Wage Workers: An Assessment of Public Service Jobs, Tax Credits, and Empowerment Zones. Footnotes

02/03/2004

1.  Training may be desirable even if it does not result in increased employment if it improves the distribution of employment.

2.  Baily and Tobin (1978) refer to this as "bang per buck."

3.  For a summary of work on education and training, see Fishman et al. (1998).  They concur with the findings of researchers at the Manpower Demonstration Research Corporation that the most effective strategies (at least for welfare recipients) are programs that emphasize job placements with provision of short­term training when necessary.  Plimpton and Nightingale (forthcoming) conclude that long­term training is a superior strategy.

4.  For a discussion of the difficulties in distinguishing structurally unemployed individuals from those who are cyclically unemployed, see Lerman, Barnow, and Moss (1979).  The U.S. Department of Labor is developing predictors of which unemployed workers are most likely to benefit from its training programs (referred to as worker profiling).

5.  See Kesselman (1978) for a detailed history and analysis of programs during the Great Depression.  The material in the text on these programs is based on Kesselman's work.

6.  See Mucciaroni (1990), Franklin and Ripley (1984), and Cook et al. (1985) for a discussion of PEP.  Information on the PEP in this section is based primarily on material in Cook et al. (1985).

7.  Because PSE positions are more costly per unit of time and generally last longer than training positions, the discrepancy in the number of participants is greater.

8.  The Emergency Jobs and Unemployment Assistance Act of 1974 added The Title VI countercyclical PSE program, 1976 amendments tightened requirements for PSE positions, the Youth Employment and Demonstration Projects Act (YEDPA) of 1977 established three special youth training and work experience programs — Youth Employment and Training Programs (YETP), Youth Community Conservation and Improvement Projects (YCCIP), and the Youth Incentive Entitlement Pilot Projects (YIEPP).  The Skills Training Improvement Program (STIP) was added to Title III of CETA in 1977 to serve dislocated workers, the Help through Industry Retraining and Employment (HIRE) was added in 1977 and modified in 1978 to train veterans, and the 1978 reauthorization added the Private Sector Initiative Program (PSIP) as Title VII of CETA to increase private­sector participation in CETA training programs and the Young Adult Conservation Corps (YACC) as Title VIII to provide conservation work experience for youth.  See Franklin and Ripley (1984, p. 21) and Cook et al. (1985).

9.  See Mirengoff and Rindler (1978).

10.  In the few areas where the average wages for regular jobs were more than 25 percent above the national average, CETA PSE wages could be supplemented by 20 percent.  Wages after supplementation could be as high as $11,000 in areas where wages were below average, between $11,000 and $13,200 in most higher­wage areas, and as high as $14,400 in a few areas with the highest wages.  See Mirengoff et al. (1980, p. 78) for details.

11.  Other outcomes of interest include serving target groups of interest and creating a local service delivery capacity.  Providing opportunities to groups of interest has been suggested by many analysts; see, for example, Mirengoff et al. (1980).  Franklin and Ripley (1984, p. 188) specifically cite the development of local delivery capacity as an important legacy of CETA.  For a discussion of other outcomes of interest in employment and training programs, see Barnow (1989).

12.  Mirengoff and Rindler (1978, p. 160).

13.  This paper will not address second­round "multiplier" effects of job creation programs.

14.  Note that a program might be considered successful if it provides employment opportunities to economically disadvantaged individuals who would otherwise not have such opportunities.  See Gottschalk (1983) and Barnow (1989).

15.  See also Adams, Cook, and Maurice (1983).

16.  See Nathan et al. (1981) and Cook et al. (1985) for descriptions of the studies.

17.  Cook et al. (1985).

18.  Another concern is that jobs programs sometimes displace private­sector employment.  If PSE positions pay more than comparable private­sector jobs, workers may remain in PSE positions rather than take private­sector jobs.

19.  Cook et al. (1985) and Mirengoff et al. (1980).

20.  See Manpower Demonstration Research Corporation Board of Directors (1984) for a summary of the supported work program and key findings from the demonstration.

21.  Kemper et al. (1981).

22.  See Diaz et al. (1982).

23.  Diaz et al. (1982).

24.  These figures appear to include participants assigned to on­the­job training in the private sector, but the OJT participants are a minority of the sample.

25.  Some of the more notorious examples cited include a "nude sculpting workshop" and hiring a former Black Panther leader to "keep an eye on the city."

26.  Mucciaroni (1990, p. 185) summarizes CETA's problems as follows: "The CETA story is one not so much about the failure of a program as it is about the failure of a set of political institutions.  It should not be confused with the notion that CETA failed to achieve, to one degree or another, several of its substantive objectives.  While few of its programs were undisputed and overwhelming successes, few were abject failures."

27.  See Eissa and Hoynes (1998).

28.  Dickert, Houser, and Scholz (1995).

29.  Eissa and Liebman (1996).

30.  Eissa and Hoynes (1998).

31.  Meyer and Rosenbaum (1998).  A strong point of Meyer and Rosenbaum's work is that they explicitly control for more factors that could change labor force participation than the other studies.

32.  Greenstein and Shapiro (1998).

33.  Greenstein and Shapiro (1998) acknowledge that the error rates associated with EITC are a concern, but they conclude that recent legislative and administrative actions have led to reductions in the error rate and should lead to further reductions.

34.  The WOTC target groups were:

  1. Members of families that received AFDC or TANF for at least 9 of the 18 months preceding the month of hire;
  2. Individuals 18 to 24 years old who were members of families receiving food stamps for at least 6 consecutive months prior to the date of hire or for at least 3 of the 5 months before the date of hire and their food stamp eligibility expired;
  3. Veterans who were a member of a family that received food stamps for at least three consecutive months during the 15 months before the date of hire;
  4. Disabled individuals who completed rehabilitative services approved by a state or the U.S. Department of Veterans Affairs;
  5. Residents of one of the 105 federally designated urban or rural empowerment zones or enterprise communities who were 18 to 24 years old;
  6. Residents of empowerment zones or enterprise zones ages 16 or 17 hired as summer youth employees;
  7. Ex-felons who were members of a low-income family; and
  8. Recipients of Supplemental Security Income (SSI).

35.  Bishop and Montgomery (1993).

36.  Barnow, Chasanov, and Pande (1990) review evaluations of other tax credits, including the new jobs tax credit, the research and development tax credit, and the investment tax credit.  They conclude that, although these credits sometimes have modest effects on the outcome of interest, they are generally inefficient policies because they produce large windfalls to firms that would have undertaken the actions subsidized without a tax credit.

37.  Lorenz (1988).

38.  Burtless (1985).

39.  Ladd (1994).