Income Security Policy Paper No. 2

Reality or Illusion: The Importance of Creaming on Job Replacement Rates in Job Training Partnership Act Programs

Kathryn H. Anderson, Richard V. Burkhauser, and Jennie E. Raymond

March 1992

Abstract:  Critics of the Job Partnership Training Act of 1982 (JTPA) argue that most of its job placement success has been the result of the "creaming" of participants--that is, of serving individuals who are most employable at the expense of those most in need. Using a bivariate probit model of JTPA trainee selection and job placement success, this paper analyzes the selection of JTPA past recipients. It provides a first approximation of the importance of non-random selection on job placement rates. Creaming is found to take place within service delivery areas (SDAs), especially with respect to the avoidance of eligible high school dropouts, but private industry councils do not simply maximize their job placement rates. The authors estimate that, in the absence of creaming, placement rates in Tennessee would fall by 18 percent. But the major change would come in increased enrollment in urban areas, not in the socio-economic characteristic of enrollees within SDAs.

A revised version of this paper appears as "The Effect of Creaming on Placement Rates Under the Job Training Partnership Act," Industrial and Labor Relations Review, 46(4)(July 1993): 613-624. Those interested in this work should see that journal.