Privatization of Welfare Services: A Review of the Literature. Department of Labor Employment Services


Contracting out service provision has been common in the U.S. Department of Labor's employment and training (E&T) programs since the 1960s (Nightingale and Pindus 1997). Most of the contractors have been nonprofit or public entities (such as community colleges, the employment service, or public school districts), although in some localities, for-profit companies have also provided services. Job Corps--a residential program for disadvantaged youth--is operated by both private entities under contract to Job Corps regional offices and by federal government entities under interagency agreements with the U.S. Department of Labor.

Nonprofit organizations and private companies have also taken a role in developing and operating the system of one-stop career centers required under the Workforce Investment Act. Affiliated Computer Services, Inc., a large for-profit corporation, manages the operation of several career centers in Polk County, Florida, for example, while the Educational Training Institute, also a for-profit company, provides similar services in Massachusetts (Graham 2001; Roper 1998). More frequently, this function is contracted to public-private consortia or nonprofit organizations.

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