There is a significant misalignment between the skills of Americans without college degrees and the workforce needs of well-paying industries that do not necessarily require a college degree—such as health care, sales, science, technology, and engineering.
A competitive grant program, administered jointly by the U.S. Department of Labor and the U.S. Department of Education, could fund education programs that specifically build the skills needed by high-growth sectors or by particular employers. States could apply on behalf of high schools, nonprofits, postsecondary schools, or other entities that design programs emphasizing both industry-specific skills and more-generalized portable skills.
To improve the employment rates and earnings of Americans workers, we need to create more coherent and more-effective education and workforce development systems, focusing primarily (though not exclusively) on disadvantaged youth and adults, and with education and training more clearly targeted towards firms and sectors that provide good-paying jobs. This paper proposes a new set of competitive grants from the federal government to states that would fund training partnerships between employers in key industries, education providers, workforce agencies, and intermediaries at the state level, plus a range of other supports and services. The grants would especially reward the expansion of programs that appear successful when evaluated with randomized controlled trial (RCT) techniques. The evidence suggests that these grants could generate benefits that are several times larger than their costs, including higher earnings and lower unemployment rates among the disadvantaged.
This paper won the 2011 Hamilton Project Policy Innovation Prize for the best proposal to create jobs and enhance productivity. Learn more about The Hamilton Project Policy Innovation prize.