The Pew Charitable Trusts hosted a webinar on August 20 exploring approaches to evaluating workforce development and job training incentives. Ellen Miller from Virginia’s Joint Legislative Audit and Review Commission (JLARC) and Ellen Harpel from Smart Incentives presented on their experiences evaluating workforce incentives in Virginia and New York.
Workforce incentives are a growing category. According to the C2ER state incentives database, workforce incentives represent roughly 10% of the total programs, but between 2020 and 2024 their number doubled. As long as workforce and talent remains a top economic development priority, the growth trend will likely continue.
Ellen Miller described Virginia JLARC’s evaluations of the Virginia Jobs Investment Program (VJIP), Small Business Jobs Grant, and Worker Retraining Tax Credit. The assessment found VJIP and the Small Business Jobs Grant have had mixed success in encouraging business location and expansion in the state and supporting job creation. They did have other positive outcomes including increasing employee knowledge and skills. The Worker Retraining Credit was found not to be fully utilized and not effective at encouraging businesses to retrain workers.
Ellen Harpel reviewed the PFM Group Consulting’s evaluation of six worker-specific tax credits as part of a broader evaluation of economic development tax incentives in New York State. She served on the project team and took the lead on assessing the Employee Training Incentive Program (E-TIP), Empire State Apprenticeship, New York Youth Jobs Program, Hire a Veteran, Employment of Persons with Disabilities, and Workers with (developmental) Disabilities tax credits. Most of these tax credits are used by few taxpayers and cost very small amounts of money. Most have also had minimal impacts on workforce development for both businesses and individuals. One notable takeaway for this set of incentives is that a relatively small proportion of tax credits that taxpayers are eligible for are actually taken by taxpayers in a given year.
Both speakers also discussed the puts and takes of conducting evaluations. They addressed data availability and quality, different approaches to measuring return on investment to the state, and estimating the impact of the incentives on business decisions and outcomes. Two takeaways are the need for more data to be able to determine whether participating workers are better off as a result and indications that grants, rather than tax credits, are a more efficient way to achieve the stated policy goals.
For more information on this topic, please see the speaker slide decks.
Photo credit: CNW Group/SkilledTradesBC
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