HEARINGS ON THE PRESIDENT'S YOUTH EDUCATION AND EMPLOYMENT INITIATIVE

TUESDAY, FEBRUARY 26, 1980

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON ELEMENTARY, SECONDARY,

AND VOCATIONAL EDUCATION,

COMMITTEE ON EDUCATION AND LABOR,

Washington, D.C.

The committee met at 9:35 a.m., pursuant to recess, in room 2175, Rayburn House Office Building, Hon. Carl D. Perkins (chairman of the subcommittee) presiding.

Members present: Representatives Perkins, Ford, Miller, Kildee, Williams, Hawkins, Kogovsek, Goodling, Buchanan, and Erdahl. Staff present: John F. Jennings, counsel; Nancy Kober, staff assistant; and Richard DiEugenio, minority legislative associate. Chairman PERKINS. The subcommittee will come to order. A quorum is present.

The Subcommittee on Elementary, Secondary, and Vocational Education is continuing hearings today on the President's youth education and employment initiative.

This morning we will open with Mr. David Mundel of the Congressional Budget Office, who will be discussing Federal expenditures for secondary school age youth. He will be followed by a panel of representatives from the American Vocational Association. Then, we will hear from a panel of representatives from the Council of Great City Schools.

Go ahead, Mr. Mundel.

STATEMENT OF DAVID MUNDEL, ASSISTANT DIRECTOR FOR HUMAN RESOURCES AND COMMUNITY DEVELOPMENT, CONGRESSIONAL BUDGET OFFICE

Mr. MUNDEL. Thank you, Mr. Chairman.

This morning, I want to discuss the Federal commitment to young people through education and employment programs; the growth of that commitment; and the allocation of resources among different groups of people.

I have a prepared statement that I would like to submit in full for the record. I will briefly summarize that statement this morning.

The Federal commitment to assisting young people through education, training, and employment programs is large, and has grown substantially during the last decade. Expenditures for these programs, including aid to college students, exceed $9 billion annually for those youth aged 14 to 11, a per capita expenditure in excess of $250 per young person.

During the next few months, the Congress faces important legislative and funding decisions that will shape the future character of these policies. In order to provide a background for these decisions, I want to treat three items in this morning's testimony.

First, a brief overview of the youth employment and education problems that are the focus of these programs.

Second, a review the size and distribution of these programs— that is, who gets the resources from these $9 billion of Federal expenditures.

Third, a brief discussion of the youth policy options and decisions that confront the Congress over the next year.

Employment and education problems exist for all groups of young people-whites and blacks, men and women, urban, suburban, and rural kids. But they are concentrated. They are present in larger proportions among minority, lower income, and less educated young people. This is seen most dramatically in table 1 of my prepared statement.

The unemployment rates of young blacks far exceed those of whites. Unemployment is generally higher among female minority young people than among male, and among high school drop outs than among those young people who finish high school. Black and Hispanic drop outs fare even worse. Young women, both black and white, with children experience even more significant employment and unemployment problems.

Education problems are similarly concentrated among particular groups of young people. Many young people, even in 1980, will not finish high school, but the minority and low-income youths will complete at even lower rates. In 1978, 10 percent of white youth and 14 percent of blacks were not enrolled in school and had not received a high school degree. Over 20 percent of Hispanic young people were not enrolled and had dropped out.

Similarly, low-income young people drop out from high school much more frequently than do their more advantaged counterparts. Seventeen percent of the youth with family incomes below $15,000 a year have dropped out of high school prior to completion. Young people in particular regions of the country experience higher drop outs than those in other regions. For example, almost 20 percent of the young people in the rural South are not enrolled in high school and have not graduated from high school, whereas the average nonenrollment or dropout rate for youths aged 14 to 22 for the country as a whole is 11 percent.

Many observers have predicted that these employment and education problems will decline in the near future because of the declining numbers of 14- to 22-year-olds. It is argued, that as the numbers decline, young people will find it easier to obtain employment; that high schools will become less crowded, and therefore, more effective; and that, these young people will be more actively sought by colleges and universities.

It is not at all clear, however, that these brighter prospects will hold true for the less advantaged young people-the people who have most of the employment and education problems that we are talking about. Other factors-the economic outlook, an expectation of high inflation and relatively high unemployment, changes in the adult labor force, and the changing demographic composition of the

youth population itself, a population that is increasingly black and increasingly minority-make the outlook for disadvantaged youth much less favorable than that for young people in general.

These problems-the concentration among disadvantaged youth of education and employment difficulties-suggest that our youth education and employment programs should be concentrated on those most in need.

When we look at table 2, we can see whether or not the current Federal effort is targeted on those youth with the most severe education and employment problems.

Federal money is generally concentrated on the low-income, nonwhite youth. More than five times as much money is spent per capita on youth from lower income families as is spent on those from higher income families. About 1⁄2 times as much per capita is spent on nonwhite youth as on white youth.

These are the result of our current array of Federal instruments. The bulk of this assistance goes to youth who have completed high school, rather than those who are still enrolled in high school or have dropped out before completing their high school degrees. Approximately 50 percent of the total expenditure for young people between the ages of 14 and 22 is directed toward the fifth of the age group that is enrolled in college.

On a per capita basis in fiscal year 1979, the average Federal expenditure for postsecondary students was about twice as much as that spent on nonenrolled youth who did not complete high school, and about five times as much as that spent on high school students who were still attempting to complete their high school degrees. In the aggregate, nearly 21⁄2 times as many Federal dollars were directed to youth who were enrolled in school-that is, both college and high school-as were directed to youth who were not enrolled in school, who had either completed school or had dropped out prior to completion. About $6.5 billion went to those in school, and about $2.7 billion went to those who were not in school.

If we look at the education and employment programs that aid young people in toto, we find that 23 percent of the aid goes to elementary school students, 19 percent goes to secondary students, and 36 percent goes to students who are enrolled in college. Another 22 percent goes to those students who are not enrolled in school, either high school or college.

Beyond the question of targeting-that is, beyond the question of whether or not money goes to those people who have the most significant employment and education problems-we need to ask about the programs themselves. Are the resources effective in reducing the education and employment problems at which they are aimed?

The effectiveness of most Federal youth programs-particularly programs aimed at high school students-is unfortunately very uncertain. The effectiveness of Federal vocational education programs in improving the labor market opportunities of graduates is unclear. A congressionally mandated study of vocational education should improve our understanding of these activities.

It is generally acknowledged that the compensatory education programs, such as that supported by title I of the Elementary and Secondary Education Act, are effective in improving achievement.

But, as Secretary Hufstedler said yesterday, these programs are directed primarily at elementary school students. We have very little experience with the effect of compensatory education programs on high school students.

One thing is clear from a preliminary evaluation of these various youth training, education, and employment programs: there are no simple and no inexpensive solutions that will have long term effects.

The Job Corps, a program on which we have some data that suggest positive effects, costs approximately $9,000 to $10,000 per year per slot. Similarly, if we wanted to deal with the problems of young women with children-young women who have dropped out of high school or face difficult employment prospects-we would be faced with providing social services such as child care in order to let them have the opportunity to participate in these employment, training, or educational activities. These programs and the needed social services will not be cheap.

Without a concerted and carefully planned effort to improve the education and employment related skills of these disadvantaged young people, it is unlikely that the prospects for these young people will be improved.

The Congress is currently facing several critical youth policy decisions. One decision is whether or not to expand, or to implement new programs in the education and employment area. Allocations will have to be made among alternative areas-expansions of high school programs or expansions of aid to postsecondary schools, expansions of training programs or expansions of employment programs.

Within each program area, the Congress in concert with the administration will have to establish priorities regarding which activities are more effective. Is training more effective than employment? Is student aid more effective than an increased support for high school learning? Which activities are more effective in improving education and employment skills, and in serving the most needy population? Which programs should receive increasing budgetary attention?

Several major pieces of legislation are currently under discussion in the Congress. The administration has proposed a new secondary school program, and a new employment and training program for disadvantaged youth. In reviewing these proposals, the Congress will need to consider whether or not funds should be designated for specific purposes, or whether they should be dispersed to local schools or to local prime sponsors with the freedom to plan and design locally described and locally chosen programs.

The Congress will also have to decide what system of funding should be used to provide support for local school districts, for local prime sponsors, for other supporters of education and employment activities; and whether Federal funds should be used to encourage cooperation between the education system, the CETA youth programs, and the private employment sector into which we hope young people will successfully move.

The Congress also faces decisions about the reauthorization and funding of the Higher Education Act. When most people talk about education and employment problems, they do not speak in terms of

higher education. But these programs deal often with the same kinds of young people, and in a budgetary sense they often compete for exactly the same resources that improved high school programs and improved programs for high school dropouts will compete. In higher education, the Congress will have to decide whether to expand student assistance, or to give greater emphasis to counseling and other student services. If the current emphasis on student aid is to be maintained, not only will the level of support have to be established, but the mix of resources among grants, loans, and work, and the mix of resources among low income, middle income, and upper income students will need to be established.

One way to look at these choices is to refer back to what was done with the current program in 1979. If the Congress chooses to fund the Higher Education Act as it has been passed by the House of Representatives, they will add approximately $200 to the per capita support for the young people enrolled in college.

If the high school program proposed by the administration is adopted, it will add approximately $60 to the per capita support for high school students. The youth employment initiative would add about $90 per capita support.

The difficult question that confronts you is not only whether to add these per capita increases in support, and with them the programs that they will implement, but also whether within those per capita levels to concentrate those resources on those students most in need.

It is clear that $60 spread evenly among all high school students in the country will make very little difference. Similarly, the $90 spread evenly among those young people who have dropped out of high school or who are high school graduates but not enrolled in college will make very little difference.

Either the overall commitment of resources can be increased, or the resources can be concentrated on those most in need.

These youth policy choices are numerous and difficult. My testimony today is intended to give some background for your deliberations, not to provide answers.

Mr. Chairman, we welcome this opportunity to come before you and your committee today, and we look forward to working with you and your staff as you confront these policy choices over the next several months.

[Prepared statement of David Mundel follows:]