by Yolanda K. Kodrzycki
May/June 1997

A consensus appears to be building that the extensive structural changes taking place in the U.S. economy warrant the expansion of government programs to assist displaced workers. Training in particular is seen as a vital part of the adjustment process. Although the "problem" is real, findings regarding the appropriate solution are murky. Research on existing training programs fails to show that they enable workers to achieve higher pay at their new jobs. Less expensive government interventions such as assistance in identifying and applying for job openings may be just as effective as training.

This article provides further analysis of the effects of training programs for displaced workers. It offers evidence on which types of workers are likely to train, and on whether trainees make bigger or better job changes than non-trainees, using information on a large number of displaced workers from Massachusetts who sought government-provided reemployment assistance in the early 1990s. The author points out some limitations of previous research with respect to evaluating how training programs affect reemployment pay. She argues that occupational changes by displaced workers may lead to some long-term benefits not captured in the studies to date, and that these occupational changes may be more pronounced for workers who have gone through training programs.

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