Impacts of soft skills development on the employment and earnings of the difficult-to-employ

The purpose of this study was to assess the overall effectiveness of the Welfare-to-Work (WtW) program, STRIVE Central Jersey, by analyzing the wages of low-skilled high school dropouts and Welfare recipients. WtW programs are widely practiced to improve the lives of the underprivileged by attempting to remove them from Welfare and transition them into employment. Such individuals typically lack Human Capital which is comprised of Personal Capital, consisting of hard skills like education, and Social Capital, consisting of soft skills like self-confidence. WtW programs, like STRIVE, focus mainly on Social Capital by attempting to instill self-esteem and human empowerment with the expectation that this will transform them into employable individuals. The STRIVE program is a process model in which successful individuals progress from one stage of the program to the next. The biographical characteristics specific to the individuals in each stage of the program were assessed to determine what characteristics allow some individuals to succeed and others to not. OLS and Probit models were utilized to make this assessment. Likewise, because of this systematic processing, there is potential for endogeneity in the form of outcomes which are a function of previous stages of the program. Heckman Selection models were applied to determine whether a selection process is occurring. Findings of this study are consistent with previous evaluations of such programs. It was found that STRIVE Central Jersey employed 32 percent of its participants and 56 percent of its graduates. The characteristics, age and being single, had a negative influence on the progression of a participant through the STRIVE process. The wages of STRIVE graduates decreased from $11.40 to $9.92 an hour. Of the $9.92 an hour wage earned, $4.45 is the STRIVE effect on wages for all participants. It was found that, compared to White individuals, Black individuals earned $2.31 less in wages, therefore the STRIVE effect for Black individuals was $2.14. The overall impact of STRIVE Central Jersey was not an encouraging one. The financial well-being of these underprivileged individuals was not improved as a result of participating in the program as individuals were left earning only $715.20 above the poverty threshold.M.S.Includes bibliographical references (p. 85-87)