PIAAC AND WORKFORCE BOARDS

Jennifer Hunt

Deputy Assistant Secretary for Microeconomic AnalysisDepartment of the Treasury

March 31, 2014

JENNIFER HUNT (DAS MICROECONOMICS) DEPARTMENT OF THE TREASURY MARCH 31, 2014 1 / 12

ADMINISTRATION INTEREST

ADMINISTRATION LABOR MARKET CONCERNS

1 UnemploymentWill be temporaryThough less temporary than would like

2 Inequality rising since 1979Inequality risingWages at bottom stagnatingWages of lower half of males falling

JENNIFER HUNT (DAS MICROECONOMICS) DEPARTMENT OF THE TREASURY MARCH 31, 2014 2 / 12

HOW COULD PIACC HELP?

COULD PIACC ONLINE HELP JOB–FINDING, WAGES?

1 By substituting for existing work–readiness and other exams?E.g. free substitute for Work KeysCurrent private tests expensiveSo could expand use of tests if free

2 As demonstration of aptitudeTo show employer directlyTo allow WIB to make appropriate recommendations to employer

3 As indicator of future training needed

4 As before/after measure of training effectiveness

JENNIFER HUNT (DAS MICROECONOMICS) DEPARTMENT OF THE TREASURY MARCH 31, 2014 3 / 12

HOW COULD PIACC HELP?

DO WE KNOW SUCH TESTS ARE HELPFUL?

1 No – hasn’t been evaluated2 No – and test score variation explains little wage variation

E.g. variation in AFQT score explains only 15% variation in wages

3 On the other handPIACC test might be betterSome of productivity comes from matching worker with right jobSo tests perhaps better at measuring raw potential than wageAnd perhaps better for predicting what training would benefit from?

JENNIFER HUNT (DAS MICROECONOMICS) DEPARTMENT OF THE TREASURY MARCH 31, 2014 4 / 12

RECOMMENDATION

EVALUATE

1 Randomly assign to use of diagnostic versus no diagnosticOr: to use of existing diagnostic versus PIACC

2 Keep track of whether those with biggest score increasesbefore/after training get better jobs faster

3 Draw on expertise of DOL’s Chief Evaluation Officer to do this

JENNIFER HUNT (DAS MICROECONOMICS) DEPARTMENT OF THE TREASURY MARCH 31, 2014 5 / 12

PIACC’S TASK DATA

PIACC’S TASK DATA

1 PIACC has very useful information on tasks workers doObviously not useful diagnostic for someone not workingBut international comparison indicates where US has to improveWhile also painting a brighter picture than the test scores

2 Questions about reading, writing, problem solving etc. on the job

JENNIFER HUNT (DAS MICROECONOMICS) DEPARTMENT OF THE TREASURY MARCH 31, 2014 6 / 12

PIACC’S TASK DATA

INFORMATION–PROCESSING SKILLS AT WORK (AV.)

JENNIFER HUNT (DAS MICROECONOMICS) DEPARTMENT OF THE TREASURY MARCH 31, 2014 7 / 12

PIACC’S TASK DATA

GENERIC SKILLS AT WORK (AV.)

JENNIFER HUNT (DAS MICROECONOMICS) DEPARTMENT OF THE TREASURY MARCH 31, 2014 8 / 12

PIACC’S TASK DATA

GENERIC SKILLS AT WORK (AV.)

JENNIFER HUNT (DAS MICROECONOMICS) DEPARTMENT OF THE TREASURY MARCH 31, 2014 9 / 12

PIACC’S TASK DATA

US TASK RESULTS BY INTERNATIONAL COMPARISON

1 US workers seem to do skilled and complex tasks at workConsistent with high US wages and productivity

2 Work in teams and don’t choose own tasks

3 Large number of workers doing manual tasks

Consistent with high inequality of test scores, wages

JENNIFER HUNT (DAS MICROECONOMICS) DEPARTMENT OF THE TREASURY MARCH 31, 2014 10 / 12

PIACC’S TASK DATA

MORE SKILLED TASKS ↔ HIGHER PRODUCTIVITY

JENNIFER HUNT (DAS MICROECONOMICS) DEPARTMENT OF THE TREASURY MARCH 31, 2014 11 / 12

PIACC’S TASK DATA

CAN THIS INFORMATION BE USEFUL FOR TRAINING?

1 Suggests can help bottom workers by getting out of manual tasks2 Can we train workers such that employers give them task control?

Or is that a management practice fully determined by employers?Need more research into whether helps lower paid workers

JENNIFER HUNT (DAS MICROECONOMICS) DEPARTMENT OF THE TREASURY MARCH 31, 2014 12 / 12