Browsing by Subject "BBER"

Now showing 1 - 3 of 3
  • Thumbnail Image
    Item
    Measuring the Impacts of Career Training on the Economy
    (University of Minnesota Duluth, 2024) Haynes, Monica; Chiodi Grensing, Gina; Ahmen, Mahad; Bakken, Mitchell; Wenginger, Avery
    The Housing and Redevelopment Authority of Duluth, Minnesota (HRA) and True North Goodwill both have several career-training programs designed to bring individuals into the labor market and build career pathways for in-demand jobs. The two organizations asked the UMD Labovitz School of Business and Economics’ research bureau, the Bureau of Business and Economic Research (BBER), to estimate the economic value of career advancement in the context of moving individuals and families from public assistance to a career. Many career training programs are designed to serve low-income individuals—the same individuals most likely to receive public assistance. Research has found that adults and children who live in low-income households are more likely to face difficult circumstances like homelessness, unsafe neighborhoods, food insecurity, and inadequate health care. The authors added that these unfavorable circumstances have detrimental effects on children, including low academic performance and mental health issues. Job training can provide numerous benefits for the participants. A study by Katz and colleagues (2022) found that sector-focused training programs generated substantial earnings gains (12%-34%) for participants. But research has also found that benefits extend beyond the individuals. A 2020 study conducted by Gasper et al. examined seven types of training programs in New York City. According to the study’s authors, investing one dollar in industry-focused career training yielded “between $2.80 and $17.78 after five years compared to if that dollar had been invested in a standard job screening and matching program.” This study estimated the financial benefits of two career scenarios—Scenario 1, which represented a full-time career as a construction laborer, and Scenario 2, which represented a full-time career as a registered nurse—using data from the Career Ladder Identifier and Financial Forecaster (CLIFF) portal's Snapshot and Dashboard tools. Data was collected and analyzed to compare the two career scenarios and a baseline scenario (a part-time cashier job). The study analyzed the earnings and public assistance benefits for a single adult living in St. Louis County, Minnesota, for 35 years, during which the adult's age ranged from 30 to 64 and who had an infant (age 0). Over the course of their lifetime, the person working as a part-time cashier will earn roughly $460,000 in after-tax income, defined as earnings minus taxes paid. By comparison, the person working as a construction laborer or a registered nurse will earn roughly $1.5 million and $1.9 million, respectively. Additionally, the person working as a part-time cashier could receive roughly $733,700 in public assistance benefits over the 35-year period, whereas the person working as a construction laborer or registered nurse could receive $127,300 and $132,500, respectively. For both career scenarios (construction laborer and registered nurse), state and federal government programs could save more than $600,000 in public assistance benefits over the course of the person’s working lifetime, as compared to working as a part-time cashier. The largest public assistance savings would come from the Medicaid program ($217,000 in savings), followed by Section 8/housing assistance ($182,500), SNAP ($141,200), and childcare assistance ($36,900). Lifetime savings from the Minnesota Family Investment Program (MFIP) would equal roughly $28,700. The financial benefits estimated in this analysis were also used to model the economic impacts of Scenarios 1 and 2 on the state’s economy overall. The results of modeling found that the economic impacts to the state resulting from the career advancement of just one individual with our parameters exceed the financial benefits to the individual. For example, the person choosing a career as a registered nurse would see a cumulative increase in their net financial resources of $889,400. Yet, the state would see economic impacts of more than $1.1 million because of increasing the person’s household income.
  • Thumbnail Image
    Item
    Navigating the Benefits Bridge: Resources for Employment Service Providers and Clients in Minnesota
    (University of Minnesota Duluth, 2023) Haynes, Monica; Chiodi Grensing, Gina; Bakken, Mitchell; Hopkins, Erin; Nadeau, Kenny; Perry, D'Lanie; Wendinger, Avery
    Public assistance programs are designed to be a bridge to economic stability; as individuals take home more earnings and become more financially stable, their benefits will decrease. Yet in some cases, by accepting a raise or increasing the number of working hours and, thus, wages, an individual may unintentionally reduce their net income (i.e., their combined wage plus benefits). This occurrence is sometimes referred to as a “benefits cliff” and can act as a barrier to career advancement for low-income individuals. Also, given the number of programs that exist and their often-complex eligibility rules, it can be very difficult for benefits recipients to understand how changes in their income might affect their eligibility for various programs. Recently, the Economic Services and Supports Division of St. Louis County, Minnesota—the local agency that administers many of the state and federal public assistance programs—asked the Bureau of Business and Economic Research (BBER) at the University of Minnesota Duluth’s Labovitz School of Business and Economics to provide a dynamic tool that could be used by career counselors when advising their clients about the potential financial impacts of a career change, using clients’ personalized information. To accomplish this, the BBER collected feedback from counselors, conducted a literature review and online search to identify existing tools, and analyzed data from various sources to determine the accuracy and usefulness of potential tools. The project will also include training by the BBER on how to use the tool. The BBER spoke to counselors in focus groups. The counselors noted that “higher minimum wages make it easier for people to surpass income thresholds—especially with small families,” thereby making those individuals more likely to lose public assistance benefits. Counselors also noted that each program has its own requirements and paperwork and that the program requirements are difficult to understand, even for them, which made it difficult to advise clients on how to make educated career choices. When asked what type of information, tools, or resources would be helpful in advising clients about public assistance programs and career advancement, many counselors said they most wanted to have a “simple calculator to calculate benefits for different variable inputs.” Examples of features they would like included the ability to calculate benefits for a given wage or a simple cost of living calculator to assist clients with budgeting. Several counselors mentioned that a handout or infographic depicting the process of moving from public assistance to a career could make conversations easier. The research team evaluated eight potential tools based on geographic availability, accuracy of data, and usability/design. Of the tools evaluated, the Federal Reserve Bank of Atlanta’s (hereafter referred to as the Atlanta Fed) CLIFF portal— developed using data from its Policy Rules Database (PRD)—was the most accurate for the largest number of St. Louis County assistance programs. Of the tools shown to the members of our working group—comprised of representatives from the county’s employment service providers— the CLIFF portal was also the most visually appealing and easiest to use. However, when comparing the data provided by the CLIFF portal with state and local policies, the working group identified inconsistencies with the Minnesota Family Investment Program (MFIP)—the state’s welfare program for low-income families with children—and the Supplemental Nutrition Assistance Program (SNAP). Therefore, the BBER contacted the Atlanta Fed to inquire about the possibility of incorporating Minnesota’s rather unique MFIP program. Since first connecting in January 2023, our collaboration with the Atlanta Fed has resulted in refinements to the user interface and the inclusion of policy rules for the MFIP program.
  • Thumbnail Image
    Item
    Northland Reliability Project Economic Impact Analysis
    (University of Minnesota Duluth, 2024-03) Haynes, Monica; Chiodi Grensing, Gina; Bakken, Mitchell; Wendinger, Avery
    Minnesota Power and Great River Energy are planning to build the NRP, a 180-mile, double-circuit 345-kV transmission line extending from northern to central Minnesota that will support continued reliable electric service in the state and the Upper Midwest. UMD's Bureau of Business and Economic Research (BBER) research estimates that by the time the high-voltage transmission line is completed in 2030, the companies will have invested more than $1.5 billion over the eight-year project when the impacts of inflation are included. Of the $1.5 billion in spending, the companies estimate that about $643.5 million will have been spent within the six-county region where the transmission line is located and $993.4 million within Minnesota. Statewide, the eight-year project is predicted to add $705.3 million in employee wages and benefits (labor income), more than $1 billion in value-added spending, and nearly $2 billion in output to the state’s economy.