Technological advances continue to transform the U.S. workforce, and workers must improve their skills to meet employers’ changing needs. Many employers report difficulties in finding qualified workers, and many unemployed workers lack the skills they need to find jobs. Training programs can help workers gain the skills needed for today’s jobs, and employment placement programs can help employers find qualified employees. In 2002, the federal government funded 44 employment and training programs that provided services, such as job search assistance, employment counseling, basic adult literacy, and vocational training, to over 30 million people at a cost of approximately $12 billion. Although these programs were administered by nine federal agencies, many of the programs provided services to the public through one-stop centers in communities throughout the country. When the Congress passed the Workforce Investment Act (WIA) in 1998, it mandated that at least 17 federally funded programs provide employment and training services through a one-stop center system (see table 1). WIA also established workforce investment boards. Each state workforce investment board is responsible for developing statewide workforce policies and overseeing its local workforce investment boards. The local workforce investment boards, in turn, are responsible for developing local workforce policies and overseeing one-stop center operations (see fig. 1). Some of the federal employment and training programs are not required to provide services through the one-stop centers. These include the Temporary Assistance for Needy Families program (TANF) and the H-1B Technical Skills Training Grant Program. The TANF program is administered by the Department of Health and Human Services and assists needy adults with children in finding and retaining employment. The H-1B Technical Skills Training Grants are administered by the Department of Labor, and the funds are distributed to select local workforce investment boards to increase the supply of skilled workers in occupations identified as needing more workers. In addition to federally funded programs, states use their own revenues to expand employment placement and training opportunities. For example, states create unemployment insurance (UI) tax offsets by decreasing the UI tax amount paid by employers and at the same time imposing a separate tax on employers for the same amount as the UI tax deduction. In addition, states use other employer taxes, and revenues from each states’ UI interest fund or from UI penalty fees imposed on employers. Employers may be charged UI penalty fees for late payments, for failing to file a UI return for an employee, or for failing to report an employee’s wages. While all of these revenues are generated through employer taxes, states also commit general revenue funds to expand employment placement and training opportunities. A study for the National Governors’ Association Center for Best Practices found that state-funded worker training programs are operating in 48 states. States have increased the availability of employment placement and training opportunities in various ways. Some states have used their revenues to expand federally funded programs. In fact, a recent national study by National Association of State Workforce Agencies found that 19 states used these revenues to supplement WIA job training services. Other states have used their revenues, including employer tax funds, to create their own employment placement and training programs; however, little is known about these programs. Some employers invest their own resources in training their workers. The exact amount of money that employers spend every year to train their workers is difficult to estimate; a study of trends in employer-provided training suggests that employers’ financial commitment to training has recently increased. Some individuals, as well, invest their own funds for training as a way to either upgrade their job-related skills or to become employable. Impact evaluations for public programs, like employment and training programs, produce findings that allow conclusions about the effectiveness of the programs to be made. These evaluations may be implemented using a few different design strategies. Two designs that are used to isolate a program’s effects, such as those on participants, are experimental designs and quasi-experimental designs. Experimental designs. These are characterized by the use of random selection and control groups. All individuals have an equal chance of being assigned to either the intervention group or the control group. The intervention group contains individuals who will receive the intervention, or program’s services, while the control group does not receive the intervention or services. This research design produces findings that allow conclusions about the effectiveness, or impact, of the intervention to be made. However, conducting experimental designs may be problematic because of the need to treat intervention and control groups differently. For example, to determine the impact of a training program on workers’ wages, a program would need to randomly provide services to some and randomly deny services to others, and track subsequent earnings for both groups of people. This approach requires services to be denied to some workers who qualify for training. Due to these difficulties, as well as the amount of time and money it takes to conduct experimental designs, quasi- experimental research designs are often preferable for their practicality. Quasi-experimental designs. These designs are characterized by comparison groups that are not randomly selected. For training programs, a quasi-experimental design would compare a group of people who have elected to take the training courses with nonparticipants who may have characteristics, such as wage or education levels, that are comparable to the group receiving services. Comparing the two groups allows researchers to account for other factors, such as the local economy, that may have influenced outcomes. The Department of Labor’s Employment and Training Administration (ETA) Office of Policy Development, Evaluation and Research has valuable resources related to designing and implementing evaluations. Labor has established evaluation coordination liaisons in each state to help with evaluations of federal programs. These liaisons can help states access logistical support and technical assistance for program evaluations. Such resources include ETA’s recent review of alternative research methodologies, which contains guidance on conducting experimental and quasi-experimental evaluations of workforce programs to determine the social and economic values of the programs. Twenty-three states reported using employer tax revenues in 2002 from a variety of employer taxes to fund their own employment placement and training programs. States most often provided job-specific training for workers. States reported spending a total of $278 million to provide these training and employment placement services. Some states established their programs as a way to address a variety of specific workforce and economic issues, such as chronic shortages of skilled workers. Twenty-three states reported using a variety of employer taxes in 2002 to fund employment placement and training services to address specific workforce issues (see fig 2). These states reported spending a total of $278 million on their workforce programs. Expenditures in 2002 varied dramatically from state to state, ranging from $100,000 in Kansas to over $84 million in California (see fig. 3). In 18 of the states, employer tax revenues completely funded these employment and training programs, while in 3 of the states employer tax revenues made up at least 50 percent of the funding for these programs. Only 1 state reported that employer tax dollars constituted less than 50 percent of its program’s funds. (For more information on individual state employment placement and training program budgets in 2002, see app. II.) States used various types of employer taxes to fund employment placement and training services (see table 2). Eleven states reported using a UI tax offset. Eight states funded their programs through a separate state employer tax. For example, Delaware employers were taxed $12.75 for the first $8,500 of each employee’s annual salary. Similarly, Massachusetts’s employers were taxed up to $8.10 per employee annually. Five states used UI penalty and interest funds. One state, California, reported combining funds from more than one employer tax source and funded its program through revenues generated by a UI tax offset and a separate state employer tax of up to $7 per employee. (For more information on the total funds collected by states through these employer taxes in 2002, see app. II.) California was the first state to use employer taxes for employment placement and worker training in 1982 and other states have followed suit (see fig. 4). In addition to California, 6 other states started using employer taxes to fund employment placement and training services by the end of the 1980s. New Hampshire most recently started to use these tax revenues to fund its program in 2001. Texas is the only state in our survey of programs operating in 2002 that has since terminated its worker training program. Some states established their programs as a way to address a variety of specific workforce and economic issues, such as chronic shortages of skilled workers. For example, Louisiana used $1.3 million to create an emergency medical services training program at a local community college after one of the state’s largest providers of paramedics and emergency medical care staff reported needing to hire most of its staff from out of state due to a lack of qualified workers. Similarly, to increase the supply of elder care providers, California funded training to certified nurses’ assistants so that they could become vocational nurses. In addition, other states noted that their employment placement and training programs address service and eligibility gaps in federally funded workforce programs. For example, Rhode Island officials said that because federal funds could not be used to provide training to employed workers prior to the passage of WIA, their employer tax-funded program provided employers with training funds specifically to improve employed worker skills. New Jersey and Washington officials also noted that their states used employer tax funds to provide employment placement and training services that are not offered through federally funded workforce programs. Other states, such as Louisiana, used employer taxes to fund training services for individuals who do not meet the income eligibility requirements used in WIA programs. Most states focused on certain industries, particularly manufacturing, because of their overall benefit to the state’s economy. California’s worker training program specifically targets manufacturing industries because these industries tend to offer high-paying, stable employment. Other industries that were also frequently targeted for training include: information; health care or social assistance; professional, scientific, or technical; and construction.