Vouchers in U.S. vocational training programs: an overview of what we have learned

An important decision that must be made in operating training programs targeted toward disadvantaged workers is whether the programs dictate the specific training programs that participants will take or they issue vouchers that permit participants to select their specific training programs. Over the past 40 years, the United States has operated a number of targeted training programs, some of which have used vouchers and voucher-like instruments to let participants determine their programs. This paper reviews the evidence from the U.S. experience. Although vouchers permit maximum consumer choice and reduce the need for government oversight, vouchers may not lead to optimal results due to imperfect information and a divergence between government and participant goals. Although vouchers are generally popular with participants, evaluations of U.S. training programs for poor workers and dislocated (displaced) workers show mixed results: many studies indicate that the impact of programs with vouchers is often lower than for programs without vouchers for poor participants, and the evidence is mixed for dislocated workers. When vouchers are used, appropriate counseling and assessment as well as the provision of provider performance information can improve the results.