A well-educated, highly skilled workforce is an essential part of the long-term health of our local, regional, and national economies. Gaining a postsecondary education is the most important determinant of differences in the lifetime earnings and incomes of workers. The economic benefits of increased employment and improved social outcomes make workforce development a promising fit for Pay for Success.
According to the Lumina Foundation, two-thirds of all jobs by 2020 will require postsecondary education.
Today, individuals face many barriers to employment. Some do not possess the skills or education required for available jobs, others face language barriers or have trouble navigating the process of searching for a new job. The need for an educated workforce is urgent.
The federal government has recognized the opportunity to support workforce development through Pay for Success. In July 2014, President Obama signed into law the Workforce Innovation and Opportunity Act (WIOA), the first major piece of federal workforce legislation since the Workforce Investment Act (WIA) of 1998. WIOA incorporates new opportunities for states and regions to innovate using ‘Pay for Performance’ (PfP) contracting, a tool similar to Pay for Success. Local workforce investment boards are authorized to use up to 10% of their funding for PfP contracts and additional funding will remain at the state level to drive support toward high-performing service providers.
Expanding Access to Adult Basic Education in Massachusetts
Social Finance is partnering with Jewish Vocational Services on a Pay for Success project to increase Adult Basic Education opportunities in Greater Boston.
Improving Outcomes for Veterans
Social Finance partnered with Bank of America Merrill Lynch to assess the feasibility of Pay for Success and Social Impact Bonds to serve US veterans, and explored opportunities in workforce development, wellness, and housing.