February 29, 2024
This PATH evaluation found that completing certain training activities increases a participant’s wage premiums by nearly $3,500, in the first two years after exiting their program. Furthermore, these training programs are found to be cost effective, with the cost of training being recovered within a year’s time. Keep reading for more information about MCDA’s analysis on PATH training programs.
PATH (Partnership. Accountability. Training. Hope) is a program designed to identify barriers to employment (such as childcare needs, transportation, and literacy) and help connect clients to the resources they need to gain employment. The PATH program was implemented on January 1, 2013, by the (now) Michigan Department of Health and Human Services, the Michigan Workforce Development Agency (now part of the Department of Labor and Economic Opportunity), and the Michigan Works! Agencies.
The PATH program begins with an assessment that identifies barriers to employment. During the assessment period, clients are also provided services that help them find employment, particularly clients who have difficulties sustaining employment or who have been unemployed for some time. After the evaluation period, caseworkers help connect clients to resources that help remove identified barriers. The PATH program helps connect clients to resources ranging from professional clothing, help with transportation, building job search skills, or preparing for a new career.
Training activities play an important role in the PATH program. These training activities can include on-the-job training, specialized certifications, and even degree conferral toward a new career. Five of these activities were analyzed by MCDA in 2022 to assess the PATH program’s overall effectiveness.
The report used advanced analytics, such as propensity score analysis, to provide stakeholders with key insights into whether PATH training programs are achieving their goal of helping PATH clients find employment.
Between 2017 and 2019, there were nearly 22,000 PATH clients who completed the 21-day PATH assessment period. Of this total, 17.5 percent received at least one of the five training services of interest. The other 82.5 percent of PATH participants received services that fall under the scope of job search/job readiness, employment, education, or unpaid work activities.
The evaluation found that PATH training did lead to higher earnings for trainees compared to those who did not receive training. On average, individuals receiving training experienced a significantly larger increase in wages than those who did not receive training. The wage gap continued to grow over the period examined. Two and a half years (10 quarters) after exiting the program, trainees experienced a quarterly wage increase of $988, on average. Over the course of a year, PATH trainees earn an average of $2,366 more than non-trainees.
Six months (two quarters) after exiting the program, trainees have a higher probability of being employed than non-trainees. This higher probability is maintained throughout the period examined -- two and a half years after exiting the program.
Additionally, using a wage premium benchmark, this evaluation found that PATH training programs are cost-effective. The average cost of providing training to PATH program participants is about $1,130. One year after exiting the PATH program, trainee wage premiums1 total $1,340, thus exceeding the average training cost by $210 after only one year. Two years after program participation, wage premiums are nearly double the first year’s wage premiums, totaling nearly $3,500 over the two years. Thus, the cost-effectiveness of training appears significant.
1 Wage Premium = (Increase in wages for trainees) - (Increase in wages for non-trainees)
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