Older Workers: Employment Assistance Focuses on Subsidized Jobs  
and Job Search, but Revised Performance Measures Could Improve	 
Access to Other Services (24-JAN-03, GAO-03-350).		 
                                                                 
Some economists predict that by 2030, the United States could	 
experience a labor shortage of 35 million workers. As the	 
shortage approaches, one option available is to encourage people 
to work beyond traditional retirement ages, especially because	 
people who are age 55 or older will constitute nearly a third of 
the poppulation. Accordingly, increasing demands will be made on 
the workforce development system to help ensure that older	 
workers are provided opportunities to help address the		 
anticipated labor shortage. Concerned that the existing workforce
development system may not meet the needs of older workers, the  
Subcommittee's Ranking Minority Member asked GAO to determine the
extent that older workers are enrolled in federal employment and 
training programs, what services are provided, and how		 
performance measures affect such services.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-350 					        
    ACCNO:   A05940						        
  TITLE:     Older Workers: Employment Assistance Focuses on	      
Subsidized Jobs and Job Search, but Revised Performance Measures 
Could Improve Access to Other Services				 
     DATE:   01/24/2003 
  SUBJECT:   Elderly persons					 
	     Employment 					 
	     Employment or training programs			 
	     Labor statistics					 
	     Performance measures				 
	     Labor force					 
	     BLS Current Population Survey			 
	     ETA Senior Community Service Employment		 
	     Program						 
                                                                 
	     Trade Adjustment Assistance Program		 

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GAO-03-350

Report to the Ranking Minority Member, Subcommittee on EmployerEmployee
Relations, Committee on Education and the Workforce, House of
Representatives

United States General Accounting Office

GAO

January 2003 OLDER WORKERS Employment Assistance Focuses on Subsidized
Jobs and Job Search, but Revised Performance Measures Could Improve Access
to Other Services

GAO- 03- 350

About 12 percent of the 1.3 million older people who were not working and
wanted a job were enrolled in these programs between July 2000 and June
2001. Some older workers received services without being enrolled in a
program but these people were not counted in program statistics. The
majority of older people enrolled received subsidized jobs through the
Senior Community Service Employment Program. About one- third participated
in programs funded by the Workforce Investment Act and Trade Adjustment
Assistance. Most of the older workers enrolled in these programs received
job search assistance, such as help in preparing for

interviews and writing resumes, but some also received job training.
Research findings have been inconsistent as to whether older workers have
distinct learning needs, but Workforce Investment Act program providers
are less likely now than in the past to have separate programs for older
workers. The Workforce Investment Act requires program providers to report
certain

information so that Labor can determine how well programs are performing.
These performance measures include how many participants find jobs and how
much their earnings have increased. Program providers report that some
performance measures provide a disincentive to enrolling older workers
into the program because of employment characteristics that may negatively
affect program performance. For example, in 6 of 10 the local areas we
visited, officials said they considered performance measures a barrier to
enrolling older workers seeking part- time jobs because they would have
lower earnings and therefore reduce program performance. Consequently,
some older workers may only receive job search assistance and not have
access to in- depth services, such as computer training.

Older workers enrolled in a computer training class in Sacramento, Calif.,
learning such skills as keyboarding, office applications, and Internet
usage. Source: Experience Works OLDER WORKERS

Employment Assistance Focuses on Subsidized Jobs and Job Search, but
Revised Performance Measures Could Improve Access to Other Services

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 350. To view the full report,
including the scope and methodology, click on the link above. For more
information, contact Sigurd Nilsen at (202) 512- 7215 or nilsens@ gao.
gov. Highlights of GAO- 03- 350, a report to the

Ranking Minority Member, Subcommittee on Employer- Employee Relations,
Committee on Education and the

Workforce, House of Representatives

January 2003

Some economists predict that by 2030, the United States could experience a
labor shortage of 35 million workers. As the shortage approaches, one
option available is to encourage people to work beyond traditional
retirement ages,

especially because people who are age 55 or older will constitute nearly a
third of the population. Accordingly, increasing demands will be made on
the workforce development system to help ensure that older workers are
provided opportunities to help address the anticipated labor shortage.
Concerned that the existing workforce development system may not meet the
needs of older workers, the Subcommittee*s

Ranking Minority Member asked GAO to determine the extent that older
workers are enrolled in federal employment and training

programs, what services are provided, and how performance measures affect
such services.

GAO recommends that the Secretary of Labor assess Workforce Investment Act

performance measures and make adjustments as necessary to eliminate
disincentives to enrolling older workers in the program. Labor generally
agreed with our recommendation and has formed a task force to review older
worker services and said that as it assesses program performance measures,
it

will identify and eliminate factors that discourage participation.

Page i GAO- 03- 350 Older Workers Letter 1 Results in Brief 3 Background 5
Older People Enrolled in Federal Programs Generally Receive

Subsidized Community Service Jobs and Job Search Assistance 9 Older People
Most Likely to Receive Subsidized Community Service Jobs and Job Search
Assistance 13 Providers Now More Likely to Include Older Workers in
Services with Younger Workers, but Some Still Offer Special Services 17
WIA Performance Measures May Affect Older Workers* Access to Services 23
Conclusions 28 Recommendation for Executive Action 29 Agency Comments and
Our Evaluation 29 Appendix I Objectives, Scope, and Methodology 31

Appendix II SCSEP National Grantee Activity in Program Year 2000 (July 1,
2000 to June 30, 2001) 34

Appendix III SCSEP Grantees* Use of 502( e) Funds in Program Year 2000
(July 1, 2000 to June 30, 2001) 35

Appendix IV WIA Earnings Change and Earnings Replacement Rate Performance
Measure Calculations 37

Adult Measure 37 Dislocated Worker Measure 37 Appendix V Comments from the
Department of Labor 38

Appendix VI GAO Contacts and Staff Acknowledgments 40 GAO Contacts 40
Staff Acknowledgments 40 Contents

Page ii GAO- 03- 350 Older Workers Related GAO Products 41

Tables

Table 1: Demographics of People Aged 55 and Over across SCSEP, WIA, and
TAA Programs 15 Table 2: States Using WIA Funds for Targeted Older Worker

Services, Program Year 2000 (July 1, 2000 to June 30, 2001) 20 Table 3:
WIA Employment Related Performance Measures for Adults and Dislocated
Workers 24 Table 4: Program Year 2000 Age Differences on WIA Performance
Measure Outcomes 25 Table 5: Part- time Workers by Age 27 Table 6:
Earnings Loss by Age of Workers Displaced from FullTime

Jobs between January 1999 and December 2001 28 Table 7: Proportion of
Population Aged 55 and Older and Funds Received for SCSEP and WIA Adult
and Dislocated Worker Programs for Selected States 32 Table 8: Local Areas
Selected for Site Visits 32 Table 9: SCSEP National Grantee Activity in
Program Year 2000 34 Table 10: SCSEP Grantees* Use of 502( e) Funds in
Program Year

2000 35 Figures

Figure 1: Proportion of People Aged 55 and Over Living in Each State in
2000 6 Figure 2: Use of SCSEP, WIA, and TAA by the 156, 000 People Aged

55 and Over Who Were Enrolled in Federal Employment and Training Programs
(July 2000- June 2001) 11 Figure 3: Number of People Enrolled in WIA and
TAA Programs by

Age (July 2000- June 2001) 12 Figure 4: Unsubsidized Placement Rates for
Older People Enrolled in WIA, TAA, and SCSEP (July 2000* June 2001) 16
Figure 5: Percentage of Older Workers Enrolled in WIA and JTPA Receiving
Targeted and Nontargeted Services 21 Figure 6: Employment Status by Age of
Workers Displaced from Full- Time Jobs between January 1999 and December
2001 27

Page iii GAO- 03- 350 Older Workers Abbreviations

JTPA Job Training Partnership Act SCSEP Senior Community Service
Employment Program TAA Trade Adjustment Assistance WIA Workforce
Investment Act

Page 1 GAO- 03- 350 Older Workers

January 24, 2003 The Honorable Robert E. Andrews Ranking Minority Member,
Subcommittee

on Employer- Employee Relations Committee on Education and the Workforce
House of Representatives

Dear Mr. Andrews: Some economists predict that by 2030, the nation could
experience a labor shortage of 35 million workers. If the potential labor
shortage is not addressed, the nation*s productivity, growth, and
international competitiveness could be threatened. As the shortage
approaches and labor markets begin to tighten, one option available to
increase the labor supply is to encourage people to stay in the labor
force beyond traditional retirement ages, especially because people who
are age 55 or older will

constitute nearly a third of the total population* an increase of 46
percent over three decades. Evidence suggests that older workers* those
people aged 55 and older who are either currently employed or seeking
employment* have a unique relationship with the labor market. Generally,
although older workers are less likely to lose a job, they are less likely
to seek reemployment after losing work and may experience a larger loss in
earnings, as compared to younger workers, when they do re- enter
employment. 1 With the potential labor shortage and an aging population,
increasing demands will be made on the workforce development system to
help ensure that older workers are provided adequate opportunities to help
address the anticipated labor shortage and meet employer needs for labor.

In 2000, several employment and training programs provided services to
older workers. These programs included the Senior Community Service
Employment Program, which primarily provides low- income older workers
with subsidized employment in public agencies and nonprofit organizations;
the Workforce Investment Act programs, which provide job search assistance
and training to adults and individuals who have lost their

1 See U. S. General Accounting Office, Older Workers: Demographic Trends
Pose Challenges for Employers and Workers, GAO- 02- 85 (Washington, D. C.:
Nov. 16, 2001).

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 03- 350 Older Workers

jobs because of layoffs or plant closings (dislocated workers); and the
Trade Adjustment Assistance programs, 2 which provide employment and
training assistance for those individuals who have lost their jobs due to
the adverse effects of international trade. When the Workforce Investment
Act replaced the Job Training Partnership

Act in 2000, it represented a major change in how employment and training
services were delivered to older workers. States were no longer required
to set aside funds to provide services specifically for older workers and
new performance measures were developed to assess program success. The act
also created a one- stop system where information about and access to a
wide array of employment and training services became available at a
single location. Concerned that existing federal employment and training
programs may not be oriented towards the needs of older workers, you asked
us to determine (1) the extent to which people aged 55 and older are
enrolled in federal employment and training programs and what services
they receive, (2) how employment and training services are provided to
older workers, and (3) how performance measures may have affected services
for older workers.

To determine what employment and training services are provided to people
aged 55 years and older (older workers) and how these services are
provided, we surveyed responsible officials in each of the 50 states and
Washington, D. C., and Puerto Rico, on states* services for older workers
through several of the major federal employment and training efforts: (1)
the Workforce Investment Act (49 states responded), (2) the Senior
Community Service Employment Program (50 states responded), and (3) the
Trade Adjustment Assistance programs (48 states responded). We also
surveyed all 595 local workforce areas to obtain information on services
provided to older workers and received 470 responses. In addition, we
conducted telephone interviews with the 10 national Senior Community
Service Employment Program grantees and visited 5 states (Arizona,
California, Florida, Massachusetts, and Pennsylvania) to obtain more
detailed information on how services are provided to older workers and
what these services include. We selected these states based on a variety
of considerations, such as the proportion of their population that was 55
or older and whether they used Workforce Investment Act funds

2 Trade Adjustment Assistance programs include Trade Adjustment Assistance
(TAA) and North American Free Trade Agreement Transitional Adjustment
Assistance (NAFTA- TAA). These programs were combined under the Trade
Adjustment Assistance Reform Act of 2002.

Page 3 GAO- 03- 350 Older Workers

specifically for older workers. Within each state, we visited two local
areas and met with local officials to discuss how older workers access
services and how these services are delivered. We judgmentally selected
these local areas to provide a mix of urban and rural areas. (App. I
contains a more detailed discussion of our scope and methodology.) We
performed our work between January and December 2002 in accordance with
generally accepted government auditing standards.

About 12 percent of the 1.3 million older people who were not working and
wanted a job were enrolled in federal employment and training programs
between July 2000 and June 2001. Although people who enroll in in- depth
employment and training services are included in program statistics,
others who receive more limited or informal services are not counted,
making it difficult to determine the total number of older workers
receiving employment and training services. Among those enrolled in
federal employment and training programs, we found that approximately
156,000 people were aged 55 and over* the majority of whom had subsidized
jobs through the Senior Community Service Employment Program. Participants
in this program usually earn the minimum wage and frequently work in
education and social service agencies in positions such as teacher aides
and receptionists. Fewer people age 55 and over were enrolled in the
Workforce Investment Act and Trade Adjustment Assistance programs. Of the
49,600 older people enrolled in these programs, most received job search
assistance, such as interviewing and resume writing workshops, while a
smaller number received training* including training for specific jobs as
well as for basic work skills. In addition, over 60 percent of those
leaving the Workforce Investment Act programs obtained unsubsidized jobs.

Employment and training providers are less likely now than in the past to
establish separate programs for older workers, but older workers still
have access to some services designed specifically for them. While
research findings on whether older workers have distinct learning needs
have been inconsistent, Workforce Investment Act and Trade Adjustment
Assistance providers generally do not serve older workers in separate
programs,

instead choosing to include older workers in the services they provide to
all workers. For example, 90 percent of local areas responding to our
survey said their occupational training classes funded through the
Workforce Investment Act are designed for workers of all ages. When the
Workforce Investment Act was enacted, eliminating the requirement that
states reserve funds for older workers, most states did not continue to
fund programs specifically for older workers. However, 10 states indicated
Results in Brief

Page 4 GAO- 03- 350 Older Workers

that they used Workforce Investment Act funds during 2000 to support
special programs for older workers, such as separate computer classes
tailored to older workers. Although most states have not used Workforce
Investment Act funds to support separate older worker programs, at the
local level the one- stop centers give older workers access to the
Workforce Investment Act and Trade Adjustment Assistance programs, as well
as to the Senior Community Service Employment Program that is specifically
for older workers. About four- fifths of local areas responding to our
survey said the Senior Community Service Employment Program is colocated
in their one- stop centers, increasing the likelihood that some targeted
services are available to older workers.

Employment and training providers report that Workforce Investment Act
performance measures have limited older workers* access to more intensive
services and training because older workers have employment
characteristics that may adversely affect program measures, particularly
those related to changes in earnings. The Department of Labor holds states
and local areas accountable for performance using several measures and
state and local areas may receive financial incentives if they meet or
exceed set performance levels but may be penalized if they fail to meet
these levels. Data from the Current Population Survey suggest that older
workers have unique employment characteristics, such as being more likely
than younger workers to work part time and to take larger pay cuts when
re- entering the labor market. All older workers can receive Workforce
Investment Act program basic job search assistance but their unique
employment characteristics may discourage program administrators from
enrolling older workers into more in- depth services,

such as training. For example, officials in 6 of the 10 local workforce
areas that we visited consider performance measures a barrier to enrolling
older workers because of their high prior wages and/ or their desire to
work part time.

We are recommending that the Secretary of Labor assess Workforce
Investment Act performance measures and make adjustments as necessary to
eliminate the disincentive to enrolling older workers in programs funded
by the Workforce Investment Act. In its comments, Labor generally agreed
with our recommendation and said that it has formed a task force to review
services to older workers and to identify policies to help meet the needs
of this group. Labor also noted that as it assesses program performance
measures it will identify and eliminate factors that discourage
participation of any group.

Page 5 GAO- 03- 350 Older Workers

In 2000, approximately 59 million people aged 55 and over resided in the
United States. The proportion of people aged 55 and over living in each
state ranged from about 13 percent in Alaska to about 27 percent living in
Florida (see fig. 1). Background

Page 6 GAO- 03- 350 Older Workers

Figure 1: Proportion of People Aged 55 and Over Living in Each State in
2000

In program year 2000, 3 older workers received employment and training
services from various federal employment and training programs, including
the Senior Community Service Employment Program (SCSEP),

3 A program year starts on July 1 of the calendar year. Program year 2000
ran from July 1, 2000, to June 30, 2001.

Alaska 12- 13.9% 14- 15.9% 16- 17.9% 18- 19.9%

Source: 2000 Decennial Census. 20- 21.9% 22- 23.9%

24- 25.9% 26- 27.9% Alabama

Arizona Alaska

Hawaii Arkansas

California Colorado

Florida Georgia Idaho

Illinois Indiana

Iowa Kansas

Kentucky Louisiana

Maine Michigan Minnesota

Mississippi Missouri Montana

Nebraska Nevada New Mexico

New York

North Carolina North

Dakota Ohio Oklahoma Oregon

Pennsylvania South Carolina South

Dakota Tennessee Texas Utah

Vermont New Hampshire Massachusetts Rhode Island Connecticut New Jersey
Delaware Maryland Washington, D. C. Virginia Washington

West Virginia Wisconsin

Wyoming Puerto Rico

Page 7 GAO- 03- 350 Older Workers

the Workforce Investment Act (WIA), and Trade Adjustment Assistance (TAA)
programs. These programs have various eligibility requirements and offer
employment and training services through different mechanisms.

Title V of the Older Americans Act of 1965 authorizes SCSEP to promote
part- time community service activities specifically for low- income older
individuals and to foster economic self- sufficiency through unsubsidized
employment. SCSEP, funded at $440. 2 million in program year 2001, is
limited to people 55 years and older with incomes at or below 125 percent
of the federal poverty level. 4 For program year 2000, Labor allotted 78
percent of the funds to 10 national grantees, including the AARP
Foundation, Experience Works (formerly Green Thumb), and the National
Council on the Aging, Inc. (See appendix II for a complete list of
national grantees and funds expended in program year 2000.) The remaining
22 percent was allotted to each of the 50 states, District of Columbia,
Puerto Rico, and the other territories. At least 75 percent of SCSEP funds
must be used to subsidize participants* wages* typically for minimum wage
jobs in nonprofit and public sector agencies. The remaining funds may be
used for such activities as assessments, counseling, training, and job
placement assistance. Section 502( e) of title V authorizes limited funds
to be used for projects placing older workers in unsubsidized employment
in the private sector. (See appendix III for more details on how these
funds were used in program year 2000.) These projects are intended to
emphasize training for jobs that reflect required technological skills.

TAA programs assist U. S. workers who lose their jobs because of increased
imports from, or shifts in production to, foreign countries. These
programs provide benefits such as trade re- adjustment allowances
(extended income support beyond normal unemployment insurance benefits),
services such as job training, and funds for job search and relocation.
Groups of workers or their representatives can petition the Department of
Labor for certification of eligibility to apply for services or benefits
under TAA programs. In fiscal year 2001, TAA programs received about $407
million to provide income support and training benefits.

WIA specifies one funding source for each of the act*s main client groups*
adults, dislocated workers, and youths* and creates a system whereby
clients can obtain information about and access to a wide array

4 In 2000, this would equate to $21,315 for a family of four in all states
except Alaska and Hawaii.

Page 8 GAO- 03- 350 Older Workers

of job training, education, and employment services at a single location,
called a one- stop center. WIA specifies 17 partner programs that are to
provide services through the one- stop center, including SCSEP and TAA.
This partnership can take different forms, including physical colocation
at the one- stop center or providing electronic linkages to the partners*
programs. WIA requires that the adult and dislocated worker programs,
funded at about $2.5 billion in program year 2001, provide three levels of
service: (1) core job search assistance, including the provision of labor
market information, and a preliminary assessment of skills and needs; (2)
intensive job search assistance, including comprehensive assessments,
creation of an individual employment plan, case management, and shortterm
prevocational services; 5 and (3) training, including skill upgrading,
literacy classes, and occupational training. Core services are available
to all job seekers, but WIA enrollment is required for intensive services
and training. Under the adult program, all persons aged 18 or older are
eligible to receive core services. In areas where funds are limited,
priority for intensive services and training must be given to recipients
of public assistance and other low- income individuals. The dislocated
worker program is generally for those individuals who have been laid off
and are unlikely to return to their previous employment. To be eligible
for the

youth program, persons must be aged 14* 21; have low income; and meet at
least one of six barriers to employment, such as being a school dropout,
homeless, or an offender.

When WIA replaced the Job Training Partnership Act (JTPA) in July 2000, it
replaced the requirement that each state reserve five percent of its adult
allotment specifically for older worker services with the provision that
states can set aside up to 15 percent of their adult, youth, and
dislocated worker allotments to support statewide workforce activities.
WIA also contains a requirement that each state and local area receiving
WIA funds must achieve certain levels of performance on several

measures. The Department of Labor evaluates performance on these measures
to determine fiscal incentives and sanctions. Some measures are common to
both the adult and dislocated worker programs, such as job placement and
retention, but earnings are measured differently for the two programs. For
the adult program, the measure compares participants* earnings before
entering the program to their earnings after completing

5 Short- term prevocational services prepare individuals for employment or
training and include development of learning skills, communication skills,
interviewing skills, punctuality, personal maintenance, and professional
conduct.

Page 9 GAO- 03- 350 Older Workers

the program and expresses the difference as an actual dollar amount. For
the dislocated worker program, participants* earnings after completing the
program are expressed as a percentage of their earnings before entering
the program.

In a previous GAO report on WIA performance measures, 6 we found that
established performance measures were a concern to state and local
officials because of the fiscal sanctions associated with failure to meet

them. We reported that the need to meet performance measures might be the
driving factor in deciding who receives WIA- funded services at the local
level. For example, local staff might be reluctant to provide WIAfunded
services to job seekers who may be less likely to get and keep a job or
those who may be less likely to experience an increase in earnings.

Approximately 12 percent of all older people who were not working and
wanted a job were enrolled in federal employment and training programs;
most of these individuals received subsidized community service jobs or
job search assistance, while a smaller number received training. The
majority of these older individuals, about 68 percent, were enrolled in
SCSEP. Other older workers may receive job assistance services without
being enrolled in a federal employment and training program, but these
individuals are not counted in program statistics. We found that
approximately 156,000 people aged 55 and older were

enrolled in SCSEP, TAA, and WIA adult and dislocated worker programs
between July 2000 and June 2001* representing about 12 percent of all the
people in this age group who wanted a job but were not working. According
to the Current Population Survey, an average of 1.3 million people aged 55
to 90 years old were unemployed or were out of the labor force and wanted
a job 7 during this same time period. Many of these

6 See U. S. General Accounting Office, Workforce Investment Act:
Improvements Needed in Performance Measures to Provide a More Accurate
Picture of WIA*s Effectiveness,

GAO- 02- 275 (Washington, D. C.: Feb. 1, 2002). 7 The Current Population
Survey defines the unemployed as actively seeking work. People defined as
out of the labor force and wanting a job, are people who are not searching
for employment but have stated they want a job. Some people who are
retired are considered to be out of the labor force and wanting a job.
Older People Enrolled in Federal Programs

Generally Receive Subsidized Community Service Jobs and Job Search
Assistance

Programs Enroll about 12 Percent of Older People Who Want Jobs

Page 10 GAO- 03- 350 Older Workers

individuals consider themselves to be retired but wish to rejoin the labor
market. Some of these individuals are actively looking for work; others
have tried to find work in the past and have become discouraged from
continuing their job search. In terms of the 59 million people who were

age 55 and older in 2000, less than 1 percent was enrolled in SCSEP, WIA,
and TAA.

The total number of older people enrolled in these federal employment and
training programs is smaller than the number of people aged 55 and older
who may have actually received services. Although federal employment and
training programs count the number of people enrolled in in- depth
services, 8 individuals who receive more limited or informal employment
assistance are not included in program statistics. Within the WIA
programs, for example, individuals can access self- service employment
resources, such as job listings, through entry- level core services
without enrolling in WIA. Similarly, within SCSEP, some older people
receive job search assistance from staff without being enrolled as clients
in the program. In Pennsylvania, for example, some SCSEP providers
maintain a job bank for older individuals who need help finding a job but
do not meet the income eligibility requirements for the program.

Of the 156,000 older people enrolled in the three federal employment and
training programs, more than two- thirds received SCSEP services. Our
surveys also show that more people aged 55 and over were enrolled in WIA
programs than in TAA programs (see fig. 2). 8 National program statistics
count the number of SCSEP participants in the community

service jobs program and the number of WIA participants enrolled in
intensive services and training.

Page 11 GAO- 03- 350 Older Workers

Figure 2: Use of SCSEP, WIA, and TAA by the 156,000 People Aged 55 and
Over Who Were Enrolled in Federal Employment and Training Programs (July
2000- June 2001)

Note: While individuals may be co- enrolled across programs, limited
national data exists on coenrollments and what data are available shows
few co- enrollments.

Although SCSEP only enrolls people aged 55 and over, the WIA and TAA
programs serve both older and younger individuals. We found that older
people make up a relatively small proportion of the total number of people
enrolled in WIA and TAA programs (see fig. 3). Our surveys show that both
the WIA dislocated worker and adult programs enrolled more older people
than the TAA programs. 68%  SCSEP

28% 

WIA 

4%

TAA Sources: SCSEP data is from the Department of Labor. WIA and TAA data
is from our national surveys that had a response rate of 94%.

Page 12 GAO- 03- 350 Older Workers

Figure 3: Number of People Enrolled in WIA and TAA Programs by Age (July
2000- June 2001)

Note: States that did not submit enrollment data by age are not included.

To the extent that it could be determined, the three federally funded
employment and training programs that we reviewed reach a small proportion
of those likely to be eligible. Although different eligibility
requirements and limited data make it difficult to determine the number of
older people who qualify for the three federal employment and training
programs we reviewed, some information is available on the number of older
people enrolled in individual programs. For example, SCSEP enrolled about
1 percent of adults aged 55 and older whose incomes would make them
eligible for services. Within WIA, the adult program enrolled less than 1
percent of all people aged 55 and older who would have been eligible on
the basis of age. The percentage of eligible older people enrolled in the
WIA dislocated worker program and the TAA programs is

0 25,000

50,000 75,000

100,000 125,000

150,000 175,000

200,000 225,000

250,000 WIA - Adult

WIA - Dislocated Worker

TAA Programs

Number of people age 54 and younger Number of people age 55 and over
Sources: WIA and TAA data are from our national surveys that had a
response rate of 94%.

Page 13 GAO- 03- 350 Older Workers

unknown, because national labor statistics do not track the population of
older people who qualify for these services. Nevertheless, information on
older people who have experienced mass layoffs shed some light on this
population. For example, the number of older people enrolled in the WIA
dislocated worker program represented about 14 percent of older people who
had experienced extended mass layoffs. 9 Likewise, the number of older
people enrolled in the TAA programs constituted about four percent of
people aged 55 or older experiencing extended mass layoffs. However,
extended mass layoff data only provides a rough approximation of the
population eligible for these two programs because the data excludes some
older people who may qualify for services and includes others who may not
meet program eligibility requirements, particularly for the TAA program.

Although WIA and TAA are seen as providing transitional services to help
unemployed people find jobs, SCSEP primarily provides low- income older
people with long- term subsidized employment. For those older people
enrolled in WIA and TAA programs, most received job search assistance,
while a smaller percentage received job training. The 106,000 individuals
who received SCSEP jobs worked part time in

nonprofit and governmental host agencies, and typically earned the minimum
wage. SCSEP participants worked in a variety of fields, ranging from
public works to health care; however, they most frequently held positions
in education and social service organizations. SCSEP community service
jobs vary and can include positions such as teacher aides, librarians, day
care assistants, receptionists, and nurse*s aides. Although some of the
host agencies provide services primarily to senior citizens, most SCSEP
jobs are with agencies that serve the general community.

SCSEP has historically focused on providing older people community service
opportunities and income support, rather than employment and training
services. However, recent legislative changes to the program have
emphasized the importance of transitioning SCSEP participants into

9 The extended mass layoff data described here covers cases where
employers have laid off at least 50 workers for a period of at least 31
days and the workers have applied for unemployment insurance. Older People
Most

Likely to Receive Subsidized Community Service Jobs and Job Search
Assistance

Page 14 GAO- 03- 350 Older Workers

unsubsidized jobs. 10 While some SCSEP administrators permit older people
to work in subsidized community service jobs for 15 years or more, other
SCSEP operators have instituted time limits* of 1 to 2 years* to encourage
participants to find unsubsidized employment. 11 SCSEP provides some job
search assistance and training services to people aged 55 and over to help
them find unsubsidized jobs. For example, many SCSEP providers help
participants create resumes and prepare for job interviews. In addition,
SCSEP operators have limited amounts of funding that can be used to pay
for classroom courses and on- the- job training at private sector
companies. For example, at least 14,000 older individuals* many of whom
were also enrolled in the community service jobs program* participated in
SCSEP training programs between July 2000 and June 2001 to prepare for
private sector jobs. 12 People aged 55 and over also received job search
assistance and training

services through WIA and TAA programs. Of the approximately 523,000 people
enrolled in TAA and WIA adult and dislocated worker programs between July
2000 and June 2001, about 49,600 were aged 55 and older. We estimate that
most of these older people received job search assistance,

while a smaller percentage received job training. 13 Job search assistance
can include the provision of job listings and information on the skills
needed to obtain these jobs, career counseling, and interviewing and
resume writing workshops. Training includes remedial education classes,
and occupational skills training taught in a classroom or on- the- job.

Remedial classes focus on literacy and other basic education and work
skills, while occupational skills training prepares people for specific
careers. For example, some occupational skills training helps participants
obtain credentials or licenses for particular professions, such as nursing
or truck driving.

10 The Older Americans Act Amendments of 2000, signed into law on November
13, 2000, mandated that Labor establish performance measures requiring
SCSEP operators to generally place at least 20% of program participants
into unsubsidized jobs. 11 Between July 2000 and June 2001, 13 states and
3 national grantees operating SCSEP programs had time limits on the length
of time participants could either stay at a specific

host agency or in the subsidized community jobs program. 12 These training
programs were primarily funded under section 502( e) of the Older
Americans Act. 13 This estimate is based on TAA and WIA data from our
national surveys, as well as WIA data from the Department of Labor.
Labor*s WIA data tracks participants who received services and exited WIA
during program year 2000.

Page 15 GAO- 03- 350 Older Workers

Within WIA adult and dislocated worker programs, older people received job
search assistance through core services before enrolling in the programs
and receiving intensive services and training. Of those people aged 55 and
over enrolled in these WIA programs, data suggest that about half of these
individuals also received training. In addition, many other older people
may have received job search assistance through WIA*s core services
without enrolling in the program and were not counted in program
statistics. Within the TAA programs, more people received job training
than job search services; however, only about 6,600 people aged 55 and
over were enrolled in this program.

Across SCSEP, WIA and TAA, we found similarities in the characteristics of
the older people enrolled in these programs. For example, women constitute
the majority of participants aged 55 and over in all three programs.
Likewise, as shown in table 1, most older participants in each program
have at least a high school diploma or general equivalency diploma.

Table 1: Demographics of People Aged 55 and Over across SCSEP, WIA, and
TAA Programs Program a Percentage of participants

aged 65 or over Percentage of female participants Percentage with at least
a high school

diploma or equivalent

SCSEP 62 73 66 WIA- Adult 19 57 76 WIA- Dislocated Worker 8 53 88 TAA 10
61 b 69

Sources: WIA and SCSEP data are from the Department of Labor. TAA data are
from GAO*s national survey and the Department of Labor. a WIA data cover
the 12,309 older workers enrolled in PY00, who received services through
local adult

and dislocated worker programs and who exited WIA during this same year.
The age data include all 12,309 older people but due to missing data the
gender data are for 12,308 and the education data for 10,070. SCSEP gender
and education data are for 60,978 PY00 enrollees who have not exited

the program. SCSEP age data are for 60,992 PY00 enrollees who have not
exited the program. b Data on the gender of TAA participants were provided
by the Department of Labor and cover

3,645 older people who received TAA services between 10/ 1/ 2000 and 9/
30/ 2001, and then exited the program. The other TAA data presented here
come from GAO*s TAA survey and cover the 6,628 older workers enrolled in
the program in PY00.

Although older participants share some similar characteristics across
programs, the people enrolled in SCSEP tend to be older than those
enrolled in WIA 14 and TAA programs. While the majority of SCSEP

14 WIA data are for individuals who received services through local adult
and dislocated worker programs and who exited WIA programs before April,
2001.

Page 16 GAO- 03- 350 Older Workers

participants are age 65 or older, approximately 80 to 90 percent of the
older participants in WIA and TAA programs are between the ages of 55 and
64. Older participants exiting WIA are more likely to be placed in
unsubsidized jobs than older participants exiting TAA and SCSEP (see fig
4).

Figure 4: Unsubsidized Placement Rates for Older People Enrolled in WIA,
TAA, and SCSEP (July 2000* June 2001)

Note: WIA placement rates are calculated by counting the number of people
aged 55 and over who were employed in the first full quarter after exiting
the program divided by the number of older people who exited during that
quarter. TAA placement rate is calculated by counting the total number of
people aged 55 and over who received services in PY00 and exited during
this same year, and then the percentage of this group that were employed
in the first full quarter after exiting the program. SCSEP placement rate
is calculated by counting the number of enrollees placed in unsubsidized
jobs divided by the established enrollment. The unsubsidized jobs figure
only counts placements of at

least 30 days that are intended to last for at least 90 days, and jobs in
which the participant is better off financially with the unsubsidized job
than with the community service position.

Placement rates (percentages)

0 10

20 30

40 50

60 70

80 WIA- Dislocated

Worker WIA- Adult

TAA SCSEP

Sources: SCSEP and WIA data are from the Department of Labor. TAA data are
from our national surveys that had a response rate of 94%.

Page 17 GAO- 03- 350 Older Workers

Fewer providers now serve older workers through separate and specially
tailored programs, but some special services are still available to older
workers. Research findings on how older workers learn and whether they
need special services have been inconsistent, and providers under
different programs have taken various approaches to serving older workers.
Providers are less likely under WIA than under JTPA to treat older workers
as a distinct group requiring a separate program, because WIA emphasizes a
common service delivery system for all workers and individual choice over
services. As they always have, TAA providers include older workers with
younger workers rather than providing separate services. SCSEP, which
serves exclusively older workers, tailors its job search and training
services to older workers, and is colocated in the one- stop centers.

Under WIA, providers are more likely to include older workers in services
with younger workers than to serve them in separate programs. WIA puts
greater emphasis than did JTPA on serving all workers together in one
common system and gives individuals more choice over the services they
receive. As a result, WIA providers are more likely to assess the needs of
older workers on a case- by- case basis, rather than considering them a
separate group that requires a separate set of services. Officials in 5 of
the 10 local areas we visited said the implementation of WIA resulted in
greater integration of older workers in services with younger workers. WIA
staff members in 9 local areas we visited included older workers with
younger workers in job search activities, and 90 percent of the local
areas responding to our survey included older workers with younger workers
in job training services.

Although some research studies support the approach of integrating older
workers with younger workers, other studies have found older workers
benefit from separate programs. Several research studies support the view
that older workers do not have distinct learning needs and would not
benefit from separate services. For example, two studies 15 found that the
diversity among older workers as to how quickly different older workers
learned new skills made it impossible to generalize about their

15 William Crown, ed., Handbook on Employment and the Elderly (Westport,
Conn.: Greenwood Press, 1996) and Noreen Hale, The Older Worker: Effective
Strategies for Management and Human Resource Development (San Francisco:
Jossey- Bass Publishers, Inc., 1990). Providers Now More

Likely to Include Older Workers in Services with Younger Workers, but Some
Still Offer Special Services

WIA Providers More Likely to Integrate Older Workers in Services with
Younger Workers

Page 18 GAO- 03- 350 Older Workers

employment and training needs. Another study 16 found that the most
effective training approaches for older workers are also the most
effective for younger workers. However, other studies 17 found that while
older workers can learn the same skills as younger workers, they benefit
from instruction that is more hands- on, involves more one- on- one
assistance, and is slower- paced than what is typically available in most
training programs. In particular, older workers may benefit from separate,
slowerpaced computer training classes because some older workers may be
unfamiliar with, and intimidated by, computers.

Several WIA officials we interviewed concluded that older workers should
be included in services with younger workers because as a group, older
workers have no distinct employment and training needs. For example, a
local area in Florida said older workers do well in job training programs
serving people of all ages. In past years the local area offered a nursing
class specifically for older workers, but it cancelled this class in part
because not enough older workers wanted to take it. Similarly, a local
area in Massachusetts no longer offered training programs specifically for
older workers, and said older workers do not need such services. According
to this local area, instructional methods that are successful with younger
workers are also successful with older workers, and the fact that some
older workers prefer to take classes with their peers* just as some
younger workers feel more comfortable in classes serving only younger

workers* does not imply that older workers need separate classes. One
provision in WIA that has led to greater integration of older workers with
younger workers is the requirement that program participants choose among
training programs offered by qualified providers. Under JTPA, a local area
could contract with a training provider to operate a job- training program
designed for a specific group, such as older workers. WIA generally
prohibits such contracting, instead letting individual program
participants choose which training to attend. Local areas now issue
vouchers to program participants, which they use to pay for training
programs offered by qualified providers. Because individual program 16 F.
I. M. Craik and T. A. Salthouse, eds., The Handbook of Aging and Cognition
(Mahwah,

N. J.: Erlbaum Press, 2000). 17 Neil Charness, et al, *Word- Processing
Training and Retraining: Effects of Adult Age, Experience, and Interface,*
Psychology and Aging, vol. 16, no. 1 (2001). Committee for

Economic Development, New Opportunities for Older Workers (New York 1999).
Irwin Goldstein, Training and Development in Organizations (San Francisco:
Jossey- Bass Publishers, Inc., 1989).

Page 19 GAO- 03- 350 Older Workers

participants choose which training program to attend, no program can be
restricted only to older workers, and older workers are more likely to be
integrated in training with younger workers. For example, a local area in

Pennsylvania used JTPA funds to contract with a provider for a training
program serving only older workers. Under WIA, program participants choose
among training programs offered by qualified local providers, and none of
these providers operates a program serving exclusively older workers.

Another change under WIA that resulted in greater integration of older
workers with younger workers was the elimination of the JTPA older worker
set aside. Under JTPA, states were required to reserve a portion of their
funds for services to older workers. Some states passed set- aside

funds along to local areas, and others contracted directly with training
providers to serve older workers on a statewide basis. WIA provided states
with greater flexibility, allowing them to use their statewide activities
funds for a wide variety of purposes. Most have not opted to reserve
statewide activities funds specifically for older workers, preferring
instead to include older workers in the regular adult and dislocated
worker services available in the one- stop centers. Twenty- six percent of
local areas responding to our survey said that because of the elimination
of the older worker set- aside, they were less likely to target training
programs specifically to older workers, although older workers still had
access to training funded through WIA. Several local areas we visited also
said they were more likely to include older workers in services with
younger workers due to the elimination of the set- aside. For example, a
one- stop center in Massachusetts now includes older workers in job search
and resume- writing workshops available to workers of all ages, rather
than providing separate workshops for older workers as they once did.

Ten of the states responding to our survey chose to use a portion of their
program year 2000 statewide activities funds specifically for older worker
services. Some states designated funds for older workers because SCSEP
providers applied to use the funds for this purpose. Another state
reserved funds for older workers to ease the transition from JTPA to WIA
and to promote best practices for serving older workers under WIA. These
states set aside a portion of their statewide activities funds for older
worker services ranging from $47,010 in Wyoming to $931,214 in South
Carolina (see table 2). Almost all the states used these funds for job
search assistance and classroom training, and a few also provided other
services such as on- the- job training.

Page 20 GAO- 03- 350 Older Workers

Table 2: States Using WIA Funds for Targeted Older Worker Services,
Program Year 2000 (July 1, 2000 to June 30, 2001) Services provided State
Amount expended Job search

assistance Occupational skills training Remedial training

Classroom training On- the- job

training Customized training a South Carolina $931,214 X X X Florida
855,475 X X Arizona 588,491 b X X X X

Louisiana 375,391 X X X X X District of Columbia 253,242 X X X Colorado
250,000 b X X Georgia 243,236 X Idaho 134,191 X X X X X

Massachusetts 50,000 X X Wyoming 47,010 b X X X X Source: Survey of state
WIA administrative agencies. a Customized training is designed to meet the
special requirements of an employer and is conducted with a commitment by
the employer to hire the individual upon successful completion of the
training. The employer pays not less than 50 percent of the cost of
training. b Program year 2000 funds reserved for older worker services,
not necessarily expended during that

program year.

Fewer older workers received targeted services funded by these 10 states
than received targeted services funded by the JTPA older worker set-
aside. In program year 2000, approximately 2,000 older workers received
targeted services, representing about 5 percent of the older workers
enrolled in the WIA adult and dislocated worker programs. In program year
1998, 18 about 11,000 people aged 55 and older received services funded by
the JTPA older worker set- aside, representing about 29 percent of the
older worker enrollment (see fig. 5).

18 Program year 1998 is the last year for which JTPA data are available.

Page 21 GAO- 03- 350 Older Workers

Figure 5: Percentage of Older Workers Enrolled in WIA and JTPA Receiving
Targeted and Nontargeted Services

Four of the states we visited were among those that used WIA statewide
activities funds specifically for older workers. Arizona, Florida, and
Massachusetts used program year 2000 statewide activities funds for older
workers, while California used program year 2001 funds. For example,
Massachusetts used the funds to support case managers at a one- stop
center who specialized in serving older workers. These specialists helped
older workers find jobs and managed support groups in which older

workers could share job- search experiences with their peers. Arizona used
its statewide activities funds partly to support job- training programs
serving only older workers, such as a customer service representative
training program. The state also reserved funds to send older workers to

training programs serving workers of all ages. California used $190, 853
in program year 2001 funds and $672,450 in program year 2002 funds for a
computer skills training program for older workers. This program served
only older workers, offered a slower pace of instruction and constant
review to ensure mastery of skills, and included a job- search component.

TAA providers, like most WIA providers, include older workers in services
with younger workers. None of the states responding to our survey of state
TAA administrators said they used TAA funds in program year 2000 to
provide separate services specifically designed for older workers. As they

always have, TAA providers served older workers along with younger
workers.

95%  

Receiving nontargeted services

5%

Receiving targeted services

Source: WIA data are from our survey of state WIA agencies that had a
response rate of 94%, and JTPA data are from the Department of Labor. WIA
JTPA

71% 29%

 Receiving nontargeted services



Receiving targeted services

Page 22 GAO- 03- 350 Older Workers

During our site visits, administrators of public employment and training
programs were unable to identify private sector companies that have
established large scale training programs specifically for people aged 55
and over. 19 As we noted in a prior GAO report, employers may feel that it
is more difficult to recoup the costs of hiring and training older workers
because of the shorter potential length of time older workers may remain
with the employer as compared with younger workers. 20 Because SCSEP is a
program exclusively for older workers, SCSEP staff

provide job search assistance and training that is tailored to meet older
worker needs. For example, SCSEP staff members in a local area in
Pennsylvania adapted their job search assistance by helping older workers
learn to address age- related questions in job interviews and advising
them to drop graduation dates from their resumes in order to deal with the
age

discrimination they may face in the job market. Another SCSEP provider in
Pennsylvania incorporated physical fitness into a program that trained
older workers for physically strenuous health care jobs, such as home
health aide. A number of SCSEP providers offered computer classes that
served only older workers and introduced new material more gradually.
These providers told us that older workers who have not learned new

technologies in many years benefit from these computer classes. In most
local areas, older workers who visit the one- stop centers have access to
some of these special services through SCSEP. Seventy- eight percent of
the local areas responding to our survey said SCSEP staff was physically
present in their one- stop centers at least once a week, usually providing
direct services to older workers. 21 In most of the local areas we
visited, older workers who visited the one- stop centers initially
received the same basic job search services available to workers of all
ages. Older workers were usually referred to on- site SCSEP staff only if
they had had no success with basic job search and other one- stop staff
members thought they could benefit from SCSEP services. At a minimum, on-
site SCSEP staff enrolled income- eligible older workers in the SCSEP

19 These program administrators, however, were able to identify private
employers* such as Wal- Mart and Disney World* that had a reputation for
hiring people aged 55 and over. 20 GAO- 02- 85.

21 Some SCSEP staff colocated in one- stop centers are permanent employees
of SCSEP provider agencies. Others are SCSEP enrollees whose subsidized
community service placement is in a one- stop center. SCSEP Offers Older

Workers Special Services and Is Accessible through One- Stop Centers

Page 23 GAO- 03- 350 Older Workers

subsidized job program. In five of the one- stop centers we visited SCSEP
staff offered additional on- site services specifically for older workers,
such as job search workshops tailored to older workers, ongoing case
management to help older workers find jobs, or a job bank of positions
appropriate for older workers. These services were usually available to
older workers not enrolled in SCSEP, as well as to SCSEP participants.

In three local areas we visited, WIA and SCSEP providers coordinated their
services in ways other than cross- referral and colocation to meet the
needs of their older workers. For example, in California one SCSEP
provider received WIA funds from the local Workforce Investment Board to
operate a satellite one- stop center focused on older workers. Although
the center served visitors of all ages, it offered an array of special
programs for older workers, such as a staffing service matching older
professionals with employers and a computer skills class tailored to older
workers. In a local area in Pennsylvania, a case manager in the one- stop
centers was funded jointly by the WIA and SCSEP programs and split her
time between helping visitors of all ages and providing specific services
to older workers. Officials in the local area said this approach allowed
the

case manager to make efficient use of her time, because she could serve
younger workers whenever no older workers needed assistance. Also, because
the case manager was an expert both on general workforce issues and on
older worker issues, she could determine the best service strategy for
each older worker.

Employment and training providers report that, as a result of WIA*s
performance measures, they are less likely to enroll some older workers in
services such as training. Bureau of Labor Statistics and Census data
suggest that older workers have unique employment characteristics, such as
a tendency to work part time and a likelihood to take larger pay cuts than
younger workers when they re- enter the labor market. These
characteristics may negatively affect outcomes on certain performance
measures, and, as a result, administrators in over half of the local areas
we visited indicated that performance measures are a barrier to enrolling
older workers into WIA intensive services and training.

WIA*s performance measures were established to provide for greater
accountability and to demonstrate program effectiveness. These performance
measures gauge program results in such areas as job placement, employment
retention, and earnings change, as well as skill attainment and customer
satisfaction. States are held accountable by Labor for the quality of the
service they provide in these areas, as judged WIA Performance

Measures May Affect Older Workers* Access to Services

Page 24 GAO- 03- 350 Older Workers

by specific performance outcomes. If states fail to meet their expected
performance levels, they may suffer financial sanctions; if states meet or
exceed their levels, they may be eligible to receive additional funds. A
prior GAO report 22 noted that the WIA performance levels are of
particular concern to state and local officials. If a state fails to meet
its performance

levels for 1 year, Labor provides technical assistance, if requested. If a
state fails to meet its performance levels for 2 consecutive years, it may
be subject to up to a 5 percent reduction in its annual WIA formula grant.

Under WIA, older workers are subject to the same performance measures as
all other workers. There are a total of eight WIA employment related
performance measures that are relevant to adults*- four pertaining to
individuals enrolled in the adult program and four pertaining to
individuals enrolled in the dislocated worker program (see table 3).

Table 3: WIA Employment Related Performance Measures for Adults and
Dislocated Workers

WIA Funding Stream Performance Measure Adult Entered employment rate
Employment retention rate at 6 months Average earnings change in 6 months
Entered employment and credential rate

Dislocated worker Entered employment rate Employment retention rate at 6
months Earnings replacement rate in 6 months Entered employment and
credential rate

Source: U. S. Department of Labor Employment and Training Administration,
Training and Employment Guidance Letter No. 7- 99 (Mar. 3, 2000).

The way two of these performance measures* earnings change which compares
pre- and post- WIA adult program enrollment earnings and earnings
replacement which compares pre- and post- WIA dislocated worker enrollment
earnings* are calculated may limit some older workers* access to more in-
depth services, such as computer training. The most favorable results to
these measures occur when individuals seek fulltime work and had low or no
prior earnings. (See appendix IV for a description of how these two
measures are calculated.) Older workers are more likely to work part time
than younger workers. As a result, older workers seeking part- time work
as well as older workers with high prior

22 GAO- 02- 275.

Page 25 GAO- 03- 350 Older Workers

earnings may produce lower outcomes on performance measures as compared to
those individuals seeking full- time work or with lower prior earnings.

Labor*s WIA outcome data for program year 2000 provides current
performance measure outcomes cumulatively for states 23 and provides
evidence that older workers* unique characteristics may adversely affect
program outcomes. With regard to the earnings change performance

measure outcome for those enrolled in the WIA adult program, older workers
had an increase in earnings that was approximately 35 percent less than
younger workers*$ 2,924 versus $4,566. Similarly, with regard to the
earnings replacement rate for those enrolled in the WIA dislocated

worker program, younger workers increased their earnings by 7 percent
whereas older workers experienced a decline in their earnings of 17
percent (see table 4).

Table 4: Program Year 2000 Age Differences on WIA Performance Measure
Outcomes

Age Adult- earnings

change outcomes (average earnings increase) Dislocated worker* earnings

replacement outcomes (earnings replacement rate)

18- 54 $4,566 1.07 55+ $2,924 .83

Source: U. S. Department of Labor, Program Year 2000, Workforce Investment
Act Standardized Record Data.

Note: These data are for people who received services through local adult
and dislocated worker programs and who exited the program in the first
quarter of program year 2000.

As a result of the potential impact on program performance measure
outcomes, WIA employment and training providers may be choosing to serve
only those job seekers who are most likely to have large earnings
increases. A prior GAO report 24 identified that the performance levels
for the measures that track earnings replacement for dislocated workers
and earnings change for adults may be especially problematic and that
several state officials reported that local staff were reluctant to
register dislocated workers with high prior earnings or already employed
adults. Officials in

six of the ten local workforce areas that we visited consider performance
measures a barrier to enrolling older workers into WIA because their high
23 There are no data from Alabama, Louisiana, New York or Pennsylvania.

24 GAO- 02- 275.

Page 26 GAO- 03- 350 Older Workers

prior wages and/ or their tendency to work part time negatively impact the
area*s performance. In addition, state officials in four out of the five
states that we met with concurred with this view. One state official
remarked that local workforce investment boards are struggling with the
WIA performance requirements, and are targeting their WIA training funds
to people seeking full- time jobs at certain wage levels to meet the WIA
requirements for earnings gain/ replacement. The official further stated
that the WIA earnings requirements make it difficult to serve job seekers
looking for part- time work, and those who had prior full- time jobs with
high salaries.

Several state and local officials commented that performance measures
create a barrier to providing services and suggested creating a separate
set of performance measures for older workers or special populations. One
of the state officials stated that, in regards to the performance
measures, it is imperative that the vast majority of participants earn
higher wages and get full- time employment, which is at odds with serving
older workers who prefer part- time jobs. Two other local officials told
us that older workers seeking part- time work would not be enrolled in
intensive services or training because of their effect on performance
measure outcomes, but could receive core services at the one- stop centers
or be referred to another program.

Of the 230 local workforce investment boards providing written comments on
our survey, 23 specifically addressed the negative effects of the
performance measures on older workers. For example, one official stated,
*federal programs must recognize the need and desire on the part of people
55 and older for part- time work. Performance goals discourage serving
this group.* Seven of the 10 SCSEP national grantees we contacted also
expressed a belief that WIA performance standards could be a disincentive
to enrollment of older workers.

Older workers have unique employment characteristics, such as a being more
likely to work part- time jobs and experiencing a greater decline in
earnings when re- entering the workforce, according to the 2001 Current
Population Survey 25 and the Bureau of Labor Statistics. 26 Older workers
are 25 Current Population Survey, 2001, conducted by the Bureau of the
Census for the Bureau of Labor Statistics. Washington: Bureau of the
Census, 2001. 26 U. S. Bureau of Labor Statistics, January 2002 Displaced
Worker Supplement to the Current Population Survey.

Page 27 GAO- 03- 350 Older Workers

approximately 50 percent more likely than younger workers to work part
time (see table 5).

Table 5: Part- time Workers by Age Age Total labor

force Part- time workers

Percentage of part- time

Workers

16- 54 122,934,000 19,915,000 16 55+ 18,881,000 4,575,000 24

Source: 2001 Current Population Survey. Note: Labor force includes both
employed and unemployed workers. The part- time category includes people
with part- time jobs or are unemployed looking for part- time jobs.

The Bureau of Labor Statistics data also show older workers who are laid
off are less likely than younger workers to become re- employed.
Furthermore, these data show that these older workers are more likely to
be re- employed part- time (see fig. 6). Figure 6: Employment Status by
Age of Workers Displaced from Full- Time Jobs

between January 1999 and December 2001 Percent 0 10

20 30

40 50

60 70

80 90

100 Total Re- employed Re- employed and

working part- time

Workers aged 20- 54 Workers aged 55 and over Source: Bureau of Labor
Statistics, unpublished data from the Displaced Worker Supplement.

Page 28 GAO- 03- 350 Older Workers

Older workers who were laid off from full- time jobs between January 1999
and December 2001 also tended to experience a slightly greater loss of
earnings than younger workers upon re- employment. 27 Specifically, older
workers replaced 89 percent of their previous median weekly earnings on
average, versus 92 percent for younger workers (see table 6). These
figures understate the impact of job loss on the income of older workers
because they only pertain to full- time work and older workers are less
likely to work full time when they are re- employed.

Table 6: Earnings Loss by Age of Workers Displaced from Full- Time Jobs
between January 1999 and December 2001

Employed full- time Age Median weekly

earnings on lost job Median weekly

earnings on current job

Replacement rate (percentage of earnings on lost job)

25- 54 $643 $593 92 55- 64 $710 $630 89

Source: Bureau of Labor Statistics, unpublished data from the Displaced
Worker Supplement.

According to some economists, the United States will face a significant
labor shortage by 2030. As the population ages, older workers could become
crucial in filling this projected shortage. Many older workers have
difficulty re- entering the workforce, and often rely on federal
employment and training programs to help them find employment. Others need
these programs to help them upgrade some skills, particularly computer
skills, so they can enter or remain in a workplace that is becoming
increasingly reliant on information technology.

Research findings have been inconsistent as to whether older workers need
special services to help them find or retain employment and employment and
training providers have taken different approaches to providing services
to older workers. Under WIA, older workers are likely to be integrated
with younger workers when receiving employment and training services
through the one- stop centers rather than receive these services through
separate targeted programs. While performance measures are not necessarily
a problem, the way that some of WIA*s performance measures are constructed
has created perverse incentives for

27 For additional information see Louis Jacobson, et al, The Costs of
Worker Dislocation

(Kalamazoo: W. E. Upjohn Institute for Employment Research, 1993).
Conclusions

Page 29 GAO- 03- 350 Older Workers

program administrators to exclude some older workers from receiving more
in- depth WIA services, such as training for a particular occupation or
upgrading computer skills. Consequently, some older workers, and any other
workers who share similar employment characteristics with older workers,
may not receive the more in- depth services that may be necessary to help
ensure that these workers are provided adequate opportunities to fill the
anticipated labor shortage and meet employer needs.

In light of concerns that older workers have unique employment
characteristics that could adversely affect certain program outcomes and
that older workers who need in- depth job search assistance and job
training to remain in, or re- enter, the workforce may not receive such
services, we recommend that the Secretary of Labor assess WIA performance
measures and make adjustments as necessary to eliminate the disincentive
to enrolling older workers in WIA.

We provided a draft of this report to Labor for review and comment. Labor
noted that it found our draft to be both informative and interesting
because the Department has a strong interest in the aging of the American
workforce and recognizes that the increasing numbers of older people will
require changes in the way older workers are thought of and treated by the
employer community. Labor generally agreed with our recommendation and
identified steps that it is taking to address it. Labor also provided
technical comments that we incorporated where appropriate. Labor*s entire
comments are reproduced in appendix V.

Although Labor acknowledged that our conclusion that some performance
measures may provide a disincentive to enrolling older workers in WIA
programs may be correct, Labor believes that such a conclusion may be
premature and noted that it is based on a limited number of comments from
project operators and Workforce Investment Boards. While we agree that our
conclusion is based on a limited number of survey responses and

interviews, we also believe that such comments raise a warning flag to
what could be a pervasive problem, and as such, should be taken into
consideration. Regarding our recommendation that Labor assess WIA
performance measures and make necessary adjustments to eliminate
disincentives to enrolling older workers in WIA programs, Labor generally
agreed, pointing out that as it assesses WIA performance measures it will

identify and eliminate factors that discourage participation of any group.
Labor also noted that it is preparing a report for the Senate
Appropriations Recommendation for

Executive Action Agency Comments and Our Evaluation

Page 30 GAO- 03- 350 Older Workers

Subcommittee on Labor, Health and Human Services, and Education that
addresses some of the same issues covered by our report. Finally, Labor
noted that it has formed a task force to review services to older workers
and to identify policies to help meet the needs of this group. We will
send copies of this report to the Honorable Elaine L. Chao,

Secretary of Labor; relevant congressional committees; and other
interested parties. Copies will be made available to others upon request.
In addition, the report will be available at no charge on the GAO Web site
at

http:// www. gao. gov. Please contact me on (202) 512- 7215 if you or your
staff have any questions about this report. Other major contributors to
this report are listed in appendix VI.

Sincerely yours, Sigurd R. Nilsen Director, Education, Workforce,

and Income Security

Appendix I: Objectives, Scope, and Methodology

Page 31 GAO- 03- 350 Older Workers

We were asked to determine (1) to what extent people aged 55 and over are
enrolled in federal employment and training programs and what services
they receive, (2) how employment and training services are provided to
older workers, and (3) how performance measures may have affected services
for older workers. In our review of federal employment

and training programs we focused on three programs funded by the
Department of Labor (Labor): SCSEP because it is the only Labor program
that serves exclusively older workers; WIA because it is the largest
program in terms of funding for employment and training services and
because its predecessor program, JTPA, required states to set aside funds
to provide employment and training services specifically for older
*workers; and TAA because Labor officials told us the program serves many
older workers laid off from mature manufacturing industries such as steel
making and textiles.

To conduct our review we visited 10 local areas in 5 states, meeting with
both local and state officials. We surveyed state officials responsible
for the WIA, SCSEP, and TAA programs in all 50 states, the District of
Columbia, and Puerto Rico. We also surveyed officials from all 595 local
Workforce Investment Boards nationally. We conducted phone interviews with
the ten national SCSEP grantees and interviewed officials from Labor and
from research and advocacy organizations such as AARP, Urban Institute,
and National Association of State Units on Aging. We obtained and analyzed
service and outcome data from Labor on the WIA and SCSEP

programs. Although we did not independently verify the data from the
Department of Labor we did review and take into consideration Labor*s
documents describing the quality of the WIA data. Finally, we reviewed
research studies on older workers* employment and training needs.

We selected five states for site visits according to several criteria,
including the proportion of the population that was aged 55 and older and
the amount of funds received for administering SCSEP and the WIA Adult

and Dislocated Worker programs (see table 7). We also chose some states
because we knew they had special programs or policies regarding older
workers as well as to ensure geographic diversity. In each state, we
interviewed officials responsible for administering the state*s WIA and
SCSEP programs. In some states, we also met with officials responsible for
the TAA program. Appendix I: Objectives, Scope, and

Methodology Site Visits

Appendix I: Objectives, Scope, and Methodology

Page 32 GAO- 03- 350 Older Workers

Table 7: Proportion of Population Aged 55 and Older and Funds Received for
SCSEP and WIA Adult and Dislocated Worker Programs for Selected States

State Proportion of population

55+ (2000) Rank WIA Adult, WIA Dislocated

Worker, and SCSEP Funds (Program Year 2000) Rank

Arizona 21.6% 26 $32,906,236 25 California 18.3 47 495,357,738 1 Florida
27.3 1 105,684,671 5 Massachusetts 22.2 17 35,418,614 20 Pennsylvania 24.8
3 95,409,899 6

Source: U. S. Census Bureau and Department of Labor.

Within each state we judgmentally selected two local workforce areas to
visit* one urban and one rural area (see table 8). In each location, we
interviewed officials representing the WIA program and officials from at
least one local SCSEP program. The local SCSEP programs we met with
received funds from state SCSEP grantees and from several of the national
SCSEP grantees. In addition, in some local areas we visited one- stop

centers, met with organizations that promote local business development,
and observed job- training programs designed for older workers. Finally,
while in California we met with Experience Works, a SCSEP national grantee
that received WIA funds to operate a computer- training program targeted
to older workers.

Table 8: Local Areas Selected for Site Visits State Local area City
Funding source for local SCSEP program( s)

Maricopa County Peoria (suburban Phoenix) Arizona, National Council on the
Aging, Inc. Arizona Navajo County Show Low National Council on the Aging,
Inc. Silicon Valley San Jose California California Stanislaus County
Modesto California, National Senior Citizens* Education and

Research Center Chipola Marianna Florida Florida Suncoast Sarasota AARP
Foundation Boston Boston National Senior Citizens* Education and Research
Center Massachusetts Franklin/ Hampshire Counties Greenfield
Massachusetts, National Senior Citizens* Education and

Research Center Central Pennsylvania Lewisburg Pennsylvania, Experience
Works Pennsylvania Luzerne/ Schuylkill Counties Wilkes- Barre Pennsylvania

Source: GAO analysis

Appendix I: Objectives, Scope, and Methodology

Page 33 GAO- 03- 350 Older Workers

We distributed three surveys to the 50 states, the District of Columbia,
and Puerto Rico, focusing on services to older workers during program year
2000 (July 1, 2000, to June 30, 2001). One survey was designed to obtain
information on how states used SCSEP funds, including their use of these
funds for training, whether they imposed time limits on host agency
assignments, and how they used 502( e) funds. We received 50 responses to
this survey (96 percent). Rhode Island did not return the SCSEP survey,
and Florida was unable to return the survey because it did not centrally
administer its SCSEP funds during program year 2000. A second survey was
designed to obtain information on how states used WIA funds to serve older
workers, including the number of older workers served, what services they
received, and whether and how states used their statewide activities funds
specifically for older workers. We received 49 responses to this survey
(94 percent). Connecticut, Delaware, and South Dakota did not return the
WIA survey. Our third survey was designed to obtain information on how
states used TAA funds to serve older workers, including how many older
workers were served and what services they received. We received 48
responses to this survey (94 percent). Michigan, Missouri, and South
Dakota did not return the TAA survey, and Puerto

Rico did not have a TAA program. We also distributed a survey to all 595
local Workforce Investment Boards nationally to obtain information on how
local workforce areas delivered services to older workers during program
year 2000. This survey covered topics including special services available
to older workers in the one- stop

centers, the colocation of SCSEP staff in the one- stop centers, and the
impact of the loss of older worker set- aside funds on services to older
workers. We received 470 responses to the survey (79 percent).

Finally, we conducted telephone interviews and a mail survey to obtain
information from the ten national SCSEP grantees on their services to
older workers during program year 2000. The telephone interviews with all
ten national grantees covered topics such as how job search and training
services were delivered, the use of 502( e) funds, and coordination with
WIA. All 10 national grantees returned the mail survey, which included
quantitative questions on services provided and the use of 502( e) funds.
Surveys

Appendix II: SCSEP National Grantee Activity in Program Year 2000 (July 1,
2000 to June 30, 2001)

Page 34 GAO- 03- 350 Older Workers

Table 9: SCSEP National Grantee Activity in Program Year 2000 National
grantee Expenditures Participants served Number of states in

which grantee operated b AARP Foundation $52,814,971 15,253 32 Asociacion
Nacional Pro Personas Mayores (ANPPM) 13,372,006 2,556 11 Experience Works
(EW) 109,547,345 29,416 45 National Center and Caucus on Black Aged, Inc.
(NCBA) 13,048,388 2,672 11 National Council on the Aging (NCOA) 39,314,754
8,524 19 National Senior Citizens Education and Research Center, Inc.
(NSCERC) a 65,325,900 15,156 28 National Urban League (NUL) 15,328,944
3,504 16 United States Forest Service (USFS) 27,394,144 5,563 42 National
Indian Council on Aging, Inc. (NICOA) 6,077,530 1,415 15 National Asian
Pacific Center on Aging (NAPCA) 6,037,991 1,326 8

Source: The source for participants served and number of states in which
grantees operated was Labor. The source for expenditures was our survey of
the national grantees. a Name has since been changed to Senior Service
America (SSA).

b States include District of Columbia and Puerto Rico.

Appendix II: SCSEP National Grantee Activity in Program Year 2000 (July 1,
2000 to June 30, 2001)

Appendix III: SCSEP Grantees* Use of 502( e) Funds in Program Year 2000
(July 1, 2000 to June 30, 2001)

Page 35 GAO- 03- 350 Older Workers

According to our surveys, eight national grantees and 22 state grantees
used 502( e) funds during program year 2000 to place older workers in and
train them for private sector employment. Grantees can operate 502( e)
projects through two funding mechanisms: they can apply for funds from a
national pool of competitively awarded 502( e) funds, and they can choose
to use a portion of their regular formula funds to sponsor 502( e)
projects.

Table 10: SCSEP Grantees* Use of 502( e) Funds in Program Year 2000
Services provided

Occupational skills training Grantee 502( e)

funds expended a Number

served Subsidized employment/ onthe-

job training Job search assistance Classroom

training Customized training Remedial

training

AARP $391,120 1,162 X EW 1,389,899 9,667 X X X X NCBA 40,879 68 X X X NCOA
1,601,082 1,574 X X X NSCERC b 523,164 610 X X X X USFS 88,362 48 X X X X
X NICOA 28,477 14 X X NAPCA 73,460 44 X X Arizona 25,359 15 X California
24,208 25 X X X X X Delaware 52,228 43 X X Georgia 40,510 66 X X X X X
Kansas 140,000 101 X X X Louisiana 38,836 21 X X Michigan 6,000 3 X
Minnesota 4,296 Not

available X X X Montana 42,245 75 X X X X New Hampshire 4,100 5 X X X New
Mexico 52,960 7 X X X X New York 65,573 89 X X X North

Carolina 57,912 43 X X X X X Ohio 336,570 216 X X X Oregon 30,519 18 X X
Pennsylvania 99,777 110 X X X South

Carolina 14,217 9 X X X South Dakota 2,469 27 X X X X Utah 76,000 175 X X
X X X Vermont 99,200 60 X X X X Appendix III: SCSEP Grantees* Use of 502(
e) Funds in Program Year 2000 (July 1, 2000 to

June 30, 2001)

Appendix III: SCSEP Grantees* Use of 502( e) Funds in Program Year 2000
(July 1, 2000 to June 30, 2001)

Page 36 GAO- 03- 350 Older Workers

Services provided Occupational skills training Grantee 502( e) funds
expended a Number

served Subsidized employment/ onthe-

job training Job search assistance Classroom

training Customized training Remedial

training

Virginia Not available 6 X X X Wisconsin 19,637 23 X Source: Surveys of
state and national SCSEP grantees.

a Includes competitively awarded and regular formula 502( e) funds. b Name
has since been changed to Senior Service America (SSA).

Appendix IV: WIA Earnings Change and Earnings Replacement Rate Performance
Measure Calculations Page 37 GAO- 03- 350 Older Workers

Measure 3: Adult Average Earnings Change in Six Months

Of those who are employed in the first quarter after exit:

Total post- program earnings (earnings in quarter 2 + quarter 3 after
exit) minus pre- program earnings (earnings in quarter 2 + quarter 3 prior
to registration) divided by the number of adults who exit during the
quarter. Measure 7: Dislocated Worker Earnings Replacement Rate in Six
Months

Of those who are employed in the first quarter after exit:

Total post- program earnings (earnings in quarter 2 + quarter 3 after
exit) divided by the pre- dislocation earnings (earnings in quarters 2 +
quarter 3 prior to dislocation)

Source: U. S. Department of Labor, Employment and Training Administration,
Training and Employment Guidance Letter No. 7- 99 on Core and Customer
Satisfaction Performance Measures for the Workforce Investment System,
March 3, 2000, pp. 11 & 13- 14. Appendix IV: WIA Earnings Change and
Earnings Replacement Rate Performance

Measure Calculations Adult Measure

Dislocated Worker Measure

Appendix V: Comments from the Department of Labor

Page 38 GAO- 03- 350 Older Workers

Appendix V: Comments from the Department of Labor

Appendix V: Comments from the Department of Labor

Page 39 GAO- 03- 350 Older Workers

Appendix VI: GAO Contacts and Staff Acknowledgments

Page 40 GAO- 03- 350 Older Workers

Joan Mahagan (617) 565- 7532 Wayne Sylvia (617) 565- 7492

Melissa Emrey- Arras, Laura Greene, and Lorin Obler made significant
contributions to this report, in all aspects of the work throughout the
assignment. In addition, Michael Coullahan conducted the information
gathering segment for the SCSEP national grantees, Arthur Merriam and
Joseph Evans contributed to the initial design of the assignment, Shana
Wallace and Stuart Kaufman assisted in the design of the four national

surveys, Carolyn Boyce conducted the data analysis for one of these
surveys, Roger Thomas provided legal support, and Corinna Nicolaou
assisted in the message and report development. Appendix VI: GAO Contacts
and Staff Acknowledgments

GAO Contacts Staff Acknowledgments

Related GAO Products Page 41 GAO- 03- 350 Older Workers

Workforce Investment Act: States* Spending Is on Track, but Better
Guidance Would Improve Financial Reporting. GAO- 03- 239. Washington, D.
C.: November 22, 2002. Workforce Investment Act: States and Localities
Increasingly Coordinate

Services for TANF Clients, but Better Information Needed on Effective
Approaches. GAO- 02- 696. Washington, D. C.: July 3, 2002.

Workforce Investment Act: Coordination of TANF through One- Stops Has
Increased Despite Challenges. GAO- 02- 739T. Washington, D. C.: May 16,
2002.

Workforce Investment Act: Youth Provisions Promote New Service Strategies,
but Additional Guidance Would Enhance Program Development. GAO- 02- 413.
Washington, D. C.: April 5, 2002.

Workforce Investment Act: Coordination between TANF Programs and One- Stop
Centers Is Increasing, but Challenges Remain. GAO- 02- 500T. Washington,
D. C.: March 12, 2002.

Workforce Investment Act: Better Guidance and Revised Funding Formula
Would Enhance Dislocated Worker Program. GAO- 02- 274. Washington, D. C.:
February 11, 2002. Workforce Investment Act: Improvements Needed in
Performance

Measures to Provide a More Accurate Picture of WIA*s Effectiveness.

GAO- 02- 275. Washington, D. C.: February 1, 2002.

Older Workers: Demographic Trends Pose Challenges for Employers and
Workers. GAO- 02- 85. Washington, D. C.: November 16, 2001.

Workforce Investment Act: New Requirements Create Need for More Guidance.
GAO- 02- 94T. Washington, D. C.: October 4, 2001.

Workforce Investment Act: Better Guidance Needed to Address Concerns Over
New Requirements. GAO- 02- 72. Washington, D. C.: October 4, 2001.

Trade Adjustment Assistance: Trends, Outcomes, and Management Issues in
Dislocated Worker Programs. GAO- 01- 159. Washington, D. C.: October 13,
2000. Related GAO Products

Related GAO Products Page 42 GAO- 03- 350 Older Workers

Senior Community Service Employment: Program Reauthorization Issues That
Affect Serving Disadvantaged Seniors. GAO/ T- HEHS- 99- 126. Washington,
D. C.: May 19, 1999.

(130101)

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