Toward more valid evaluations of training programs serving the disadvantaged

The author challenges the widespread assumption that the wage effects of federal training programs are reliable and unbiased estimates of productivity effects and social benefits. Evidence is presented that the reputations of government training programs are unreliable and that employers stigmatize those eligible for Targeted Jobs Tax Credit and Comprehensive Employment and Training Act on-the-job training contracts. Graduates of classroom training programs which are known to be funded by the Job Training Partnership Act are likely to be similarly stigmatized. TJTC eligibles are seriously underpaid by employers and job training partnership act graduates may experience a similar fate. Consequently, the true effect of JTPA on the productivity of disadvantaged workers may be considerably larger than its effect on wages. The author describes alternative methods of obtaining estimates of productivity effects of training programs.