Lifelong Learning Accounts: Creating a Partnership in Lifelong Learning June 2006

Lifelong Learning Accounts:

Creating a Partnership in Lifelong Learning

June 2006

CAEL’s Mission

CAEL pioneers learning strategies for individuals and organizations. We advance lifelong learning in partnership with

educational institutions employers labor organizations government communities

CAEL works to remove policy and organizational barriers to learning opportunities, identifies and disseminates effective practices, and delivers value-added services.

AdultLearners

Employers and

Unions

Governmentand

Community

Colleges and

Universities

CAEL Connects:

CAEL’s Workforce Development Work

CAEL’s Lifelong Learning Work

CAEL’s Public Policy Work

What are LiLAs?

Lifelong Learning Accounts (LiLAs) are employer matched individual asset-building accounts to finance lifelong learning so that workers can upgrade their skills and knowledge to achieve their career goals while meeting the demands of businesses for a skilled workforce.

The Need for Lifelong Learning

Skills gap

42% of occupational categories with projected new job growth in the next decade will require a college degree or other post secondary award, compared to 29% in 2000.Source: Bureau of Labor Statistics (2001). Employment Outlook 2000-2010: Occupational Employment Projections to 2010. Online at, http://stats.bls.gov/opub/mlr/2001/11/art4full.pdf

85% of jobs are classified as “skilled” or require education beyond high school.Source: National Commission on Mathematics and Science Teaching for the 21st Century (2000). Before It’s Too Late. Online at, http://www.ed.gov/inits/Math/glenn/index.html

The Need for Lifelong Learning

At the same time, a slowing in the growth of educational attainment.

A 2003 Aspen Institute Study estimates that there was a 19 percent increase in the share of workers with post-high school education over the last 20 years. That will drop to 4 percent in the next 20 years.Source: The Aspen Institute (2003) Grow Faster Together Or Grow Slowly Apart: How Will America Work in the 21st Century? Online at, http://www.aspeninst.org/AspenInstitute/files/CCLIBRARYFILES/FILENAME/0000000225/DSGBrochure_final.pdf

Education Has a Clear and Compelling Impact on Salary Levels and Job Stability

Source: Bureau of Labor Statistics (2004). Education and Training Pays. Online at, http://www.bls.gov/emp/emped00.pdf.

Who Is Today’sAdult Learner?

3 out of 4 undergraduates have at least one characteristic of an adult learner

43% of postsecondary students are between 25 and 44 years old, 82% of whom work while enrolled.

Source: National Center for Educational Statistics (2003), Work First, Study Second: Adult Undergraduate Who Combine Employment and Postsecondary Enrollment..

Wisconsin’s Challenge

According to Measuring Up 2004, the percentage of 25-49 year olds enrolled in part-time postsecondary education in Wisconsin dropped from 4.3% in 1994 to 3.7% in 2004, below the top performing states’ percentage of 5.4%

Wisconsin earned a “D” grade for affordability of education.

Source: The National Center for Public Policy and Higher Education

Who Pays for Adult Learning?

FoundationsTANFState WorkforceETA - DisadvantagedETA - OtherState - CCsFed - Higher EdEmployers/ Unions

Informal Analysis by Ford Foundation

LiLA Components Include:

Universal LiLA eligibilityEmployer BasedPortableContributions from Individuals,

Employers and, potentially, Third PartiesVoluntary Participation Informed Choice

CAEL’s LiLA Initiative:

A three-site, multi-sector LiLA demonstration for 300-400 workers

A comprehensive, independent evaluation of the demonstration

National and state LiLA policy activities

Demonstration Sites

Chicago, IL -- 125 employees of the restaurant and foodservice industries

Northeast Indiana -- 75 manufacturing employees and 75 public sector employees

San Francisco -- 75 employees of the allied healthcare industry

Demonstration Results to Date

Fully operational in all three sitesWide range of employers, primarily

small and medium sizeHighly diverse group of participants

Over half of participants are non-white Nearly half earn less than $30,000 Over half are female Over half are under age 40

Top Reasons for Employer Participation

Way to provide an affordable benefit. Improve the skill set of workers. Improve employee morale. Increase retention of employees.

Top Reasons for Employee Participation

Pursue a degree. Obtain additional training and knowledge. Continue education.Learn a new or different skill. Increase earning potential.

Sample Uses

NursingLab TechnicianESLManagementAccountingComputersHVACQuality AssuranceCulinary Arts

LiLA Policy Goals

Make LiLAs available to all employees as part of standard employee compensation packages.

Enact legislation that provides tax incentives for education and training through LiLAs.

LiLA Policy Initiative

Federal Federal Tax Demonstration National Innovation Act

State State-based pilot (ME) State planning research (IL) Legislative initiatives

State tax incentives (OK)State matching pilot (IL and IN)

WIRED (Coastal Maine and Kansas City regions)

Proposed Federal LiLA Demonstration

Key Recommendations:

Use tax credits as third-party financing mechanism for a national system of LiLAs

Serve up to 200,000 individual workers in 10 states Build in a larger tax incentive to workers earning

$75,000 or less Through corporate tax credits, encourage employers of

all sizes to match individual contributions, including non-profits

Provide technical assistance to participating companies and advising to individual LiLA holders

Test the LiLA model at a much larger scale

National LiLAProject Sponsors

Ford FoundationAnnie E. Casey FoundationBank of America FoundationChicago Community TrustCity of Fort WayneOlive B. Cole FoundationEvelyn and Walter Haas, Jr.

FundWalter and Elise Haas FundFriedman Family FoundationRichard and Rhoda Goldman

FundGrand Victoria FoundationHewlett FoundationIndiana Department of

Workforce DevelopmentIndiana Michigan Power

Indiana Northeast DevelopmentLevi Strauss FoundationLincoln Financial Group

Foundation, Inc.Noble County Community

Foundation, Inc.Northeast Indiana Workforce

Investment BoardPolk Bros. FoundationSan Francisco FoundationSteuben County Community

Foundation (donor-advised)United States Department of

Labor (Maine program)Verizon Foundation

Contact Information

Amy ShermanPublic Policy DirectorCAEL55 East Monroe St., Ste. 1930Chicago, Illinois 60603312-499-2635 (phone)312-499-2601 (fax)asherman@cael.orgwww.cael.org