University of Michigan Gateway Ford School


Local Impacts of Economic Change: Strategic Responsiveness of State and Local Workforce Development Systems to Economic Decline

Elsie Harper-Anderson, College of Architecture and Urban Planning, University of Michigan

Professor Harper-Anderson received funding from CLOSUP's Small Grants Program (FY 2004) for this research project on Local Impacts of Economic Change: Strategic Responsiveness of State and Local Workforce Development Systems to Economic Decline.

The economic boom period of the mid-1990's and subsequent bust of 2001 determined new winners and losers in urban labor markets. Opportunities created by the once expanding economy produced a new assortment of corporate professionals as well as a significant class of service workers. Unfortunately, the turn of the century brought a sudden halt to the new job machine. Effects of the gains as well as the subsequent losses were regionally concentrated in areas with the most economic activity. Consequently, state and local workforce development efforts gained heightened importance as former CEOs and highly educated technological gurus found themselves out of work and either jockeying for positions or seeking new training along side common folk. Workforce development systems were now facing clients and demands for services foreign to the traditional institution of workforce development.

While some Workforce Investment Boards met the challenge with well thought-out, customized service delivery and design strategies, others continued to implement standardized programs which were largely disconnected from the specificities of their local economies and workforces. The ability of workforce development systems to respond effectively to this latest economic shock was intimately embedded in willingness and ability to integrate workforce development systems with economic development efforts and further, to customize strategic design based on the unique features of a given region's economy.

This study examines efforts to link together and customize local workforce and economic development programs. The approach taken is to weave together information from multiple data sources. The investigation utilizes a combination of quantitative and qualitative methods in a multi-pronged approach. Key components of the research design include: the compilation of background regional economic data to assess the impact of national economic decline (2000-2003) on each local workforce development area; a case study design to provide detailed information on customization and partnership decisions at the state and local levels, in a variety of local economic and policy contexts; and a quantitative analysis to understand the influence of regional economic factors, individual characteristics, and policy decisions on the ability of workforce agencies to manage unemployment and meet Workforce Investment Act (WIA) annual performance requirements.

As the U.S. enters a new phase of reauthorized WIA legislation, states and local workforce investment areas are charged with redesigning, or at least updating, their delivery systems. This research underscores the importance of customized as compared to standard delivery systems as the critical ingredient to offsetting the impacts of economic change.

Research Findings
Preliminary findings from this research project include the following:

Key Findings Report

The following policy report, released in January 2008, is the report of initial findings from this project.

Press Coverage

The University of Michigan News Service released the following article on January 18, 2008 concerning this study.  | 
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