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- Skills Mismatch
Wage data is an important tool for helping state policymakers understand whether postsecondary education and training programs are helping people find careers with family-sustaining wages. However, the most commonly used state wage data does not include this information about every state resident. To remedy this, Maryland recently enacted HB 1206, which allows the Maryland Longitudinal Data Center System (MLDS) to receive aggregate wage information about students from the state’s Comptroller. This law makes Maryland one of the first states able to access tax data to determine student employment outcomes.
State agencies get wage information by utilizing the records collected through the administration of the unemployment insurance program, called unemployment insurance wage records. Most employers within a state are required to submit wage records for each employee to the state, so that the state can determine what unemployment benefits an individual is entitled to if they were to lose their job. These records are maintained in secure databases, and when connected with data about participants in workforce training and education programs, can show whether participants are finding jobs, and how much they are earning after completion. However, state unemployment insurance wage records do not contain information about all employees. The federal government, military, and self-employed do not participate in the unemployment insurance program, so there are no unemployment insurance wage records about these individuals. Residents working for employers in other states also have no in-state records. This can lead to significant gaps in available wage information in a state like Maryland, where many residents work for the federal government or military, or work in nearby Washington, D.C. or Virginia.
To find the employment outcomes of more residents and produce information to improve the state’s education and training system, Maryland recently enacted HB 1206. This allows MLDS, which securely matches data from Maryland’s K-12, postsecondary, and workforce systems, over time, to collect aggregate wage information from the state’s tax records. Aggregate data, which groups information about a number of students, allows MLDS to better understand student outcomes without jeopardizing an individual’s privacy.
Maryland was inspired to create this legislation after reading the Workforce Data Quality Campaign’s (WDQC) case study, “How Montana is Using Data to Drive Policy.” This report detailed how Montana measures the outcomes for college graduates using tax records maintained by the Montana Department of Revenue. Maryland utilized Montana’s method of providing student data to the tax agency, and receiving summary information in return. This method ensures that privacy laws surrounding tax records are respected.
The passage of HB 1206 makes Maryland and Montana the only two states that are able to have wage information about former students who are state residents – no matter where they are working. WDQC encourages more states to utilize their state’s tax information, or participate in cross-state wage data exchanges, such as SWIS, to ensure that they can understand the outcomes of all students and drive policies to ensure that taxpayer dollars are invested in successful programs that grow the economy.