Training Vouchers, Cash Transfers, and Their Effects on Employment-Related Outcomes: A Review of the Literature
In 2021, the Chief Evaluation Office (CEO) and the Employment and Training Administration funded a contract to conduct a literature review (2010-2020) on the employment impacts of training vouchers and cash transfer programs. The review also included a limited number of older studies and studies describing the impact of these interventions in similar economic contexts, including Canada and Germany. Outcomes of interest for this review included employment, earnings, and educational attainment.
Researchers identified studies of four types of voucher programs:
- Individual training accounts (ITAs) allow for customer choice in paying for outside training from government-approved sources.
- Individual development accounts (IDAs) are personal savings accounts aimed at low-income earners. An employer or the government may match IDA deposits to incentivize saving for educational, professional, or financial goals.
- Career advancement accounts (CAA) are vouchers that fund career-oriented licenses, certifications, or associate degrees. The current MyCAA program has targeted spouses of active-duty service members, the National Guard, and reserve members in lower pay grades.
- Personal reemployment accounts (PRAs) fund employment-related assistance for unemployment insurance (UI) recipients. The recipient may receive some PRA funds as a bonus after starting a new job.
In studies of direct transfer interventions, researchers focused on unconditional transfers, those not related to income level or participation in an activity such as applying for jobs.
- Training voucher programs demonstrate generally, but not overwhelmingly, positive impacts on employment outcomes.
- Voucher programs in which participants receive more counseling appear to be more successful.
- It is difficult to draw conclusions about outcomes and impacts for cash transfer programs.
- Neither intervention appears to permanently reduce workforce participation.
- Recipients of training vouchers and cash transfers experience individual and community benefits outside of employment impacts.
Policy Implications: This report describes the existing evidence base on employment, earnings, and education-related outcomes associated with two types of interventions: training vouchers and cash transfers. Researchers’ findings identify key research gaps and may inform the development and improvement of future DOL programs.