Using wage records in workforce investments in Ohio: rehabilitation/wage-record followup reports jointly developed in the 1990s by two Ohio State agencies and the Unemployment Compensation Program enable the agencies to track the status of former clients by means of matching wage records by Social Security number

Monthly Labor Review, May, 2004 by Rich Gordon, Mark Schaff, Greg Shaw

The Ohio Rehabilitation Services Commission receives basic grant funding and authorization for the provision of vocational rehabilitation services under Title IV of the Workforce Investment Act of 1998. Hence, the commission has a fundamental interest in determining the magnitude of the economic benefits received by clients as a result of the commission's interventions. Since the early 1990s, the commission and the Bureau of Labor Market Information, with assistance from the Unemployment Compensation Program Services Bureau, have jointly developed rehabilitation/wage-record followup reports by matching wage records to rehabilitation clients by Social Security number. These reports address rehabilitation planning and program needs at three levels:

1. National, improving wage-record documentation of training successes.

2. State, securing State funding to meet Federal funding matching requirements through wage-record documentation of job retention rates.

3. Local, providing individual client followup data at 1 year, 2 years, and 3 years after closure for feedback to counselors.

This article discusses each of these ongoing applications of wage-record data to crucial rehabilitation program functions. The article concludes with a discussion of measures that will improve the usefulness of the applications.

The national level

The staffs of the commission, the Unemployment Compensation Program Services Bureau, and the Labor Market Information Bureau developed techniques for utilizing wage-record documentation and increasing training cost reimbursements from the Social Security Administration (SSA) to the commission. The commission makes followup contact with its clients to verify their employment status and wages prior to closing a case. Despite the agency's provision of services identified in its rehabilitation plan, a case is closed and deemed unsuccessful if the commission loses contact with the client and the client's employment status cannot be assessed. Historical evaluations of postclosure wage-record matches indicate that a small, but significant, portion of these unsuccessful closures involves clients who actually are employed at competitive wages. The lack of employment documentation is most critical for vocational rehabilitation clients who are beneficiaries of Supplemental Security Income or Social Security disability income.

The commission is not authorized to seek reimbursement from the SSA for training expenses when a closure is unsuccessful. However, on the basis of wage-record documentation, the staff has been able to utilize the employer-generated wage records, when matched to a client's Social Security number, to determine the client's wages and employment status after the case is terminated and apply successfully for SSA reimbursement of training costs.

During the first year that the commission undertook the matching of clients' wage records with their Social Security numbers, the new wage-record documentation led to reimbursement of $334,000 in training costs from the SSA. The commission now projects SSA training reimbursements between $500,000 and $1 million annually. These are essentially new Federal funds for the agency. In other words, the work status of former clients with whom commission counselors had lost contact, but who subsequently were successful in finding a job, can now be documented through unemployment compensation wage records from employers (based on the client's Social Security number), thereby permitting the rehabilitation agency to receive gaining cost reimbursements of about $500,000 to $1 million each year from the SSA.

The practical, general lesson to be learned from this project for workforce development is that wage records can be used to assess program outcomes. Wage records offer a viable alternative to traditional followup studies that often prove to be difficult, limited in coverage, and costly. The use of wage records affords a way to do such work efficiently and effectively--that is, to "work smarter" in developing outcome measures that can serve to guide future investments in the workforce.

The State level

Most Federal rehabilitation funding requires a significant match of State monies--approximately 80 percent of Federal monies matched with 20 percent of State funds. With State budgets falling as a result of reduced revenues, it became especially important for State rehabilitation agencies to be able to provide objective indicators of the economic success of their programs. In the case of the Rehabilitation Commission, agency administrators and budget negotiators benefited from their ability to demonstrate, on the basis of wage-record followup studies, high Ohio employment retention rates for competitively placed rehabilitation clients.

Starting with the Federal fiscal year 1993 rehabilitation class (that is, the cohort of rehabilitation case closures from October 1, 1992, to September 30, 1993), the staffs of the commission and the Bureau of Labor Market Information began utilizing wage records to produce 1-year, 2-year, and 3-year followup reports regarding clients' employment in Ohio following the commission's closure of their cases. (See table 1.) These reports are most meaningful for those clients who have completed their rehabilitation plan; who have not been placed in sheltered workshops, subsidized businesses, or homemaker situations; and who compete in the labor market as regular workers. (Such individuals are called competitively placed clients.) As shown in table 2, the 1-year employment retention rates by cohort ranged from a low of 74 percent for the Federal fiscal year 1993 cohort to a high of 81 percent for the 1999 rehabilitation class. The 2-year employment retention rates ran as low as 69 percent for the 1993 cohort and as high as 74 percent for the 1998 cohort. The 3-year employment retention rates ranged from a low of 67 percent for the 1996 cohort to a high of 70 percent for the 1997 cohort.