Analyzes two demonstration projects funded by the U.S. Departments of Labor and Health and Human Services to evaluate the effectiveness of subsidized employment. The authors describe different subsidized employment models; provide an overview of study methodology to evaluate the impact of the subsidized employment programs on participant employment, earnings, incarceration, public assistance receipt, and child support payments; and share early findings from the research. 

“In 2010, the U.S. Department of Health and Human Services launched the Subsidized and Transitional Employment Demonstration (STED) and the U.S. Department of Labor launched the Enhanced Transitional Jobs Demonstration (ETJD), complementary large-scale research projects evaluating the effectiveness of the latest generation of subsidized employment models. The ETJD and STED projects are evaluating a total of 13 subsidized employment programs in 10 locations across the United States, all of which aim to improve participants’ long-term success in the labor market. They target groups considered ‘hard to employ’ (recipients of Temporary Assistance for Needy Families [TANF], people with criminal records, young people who are neither in school nor working, and others), and they use subsidies to give participants opportunities to learn employment skills while working in supportive settings, or to help them get a foot in the door with employers… Each of the 13 program models is distinct, but it is possible to group them into three broad categories:

  • Modified Transitional Jobs Models place all or nearly all participants into fully subsidized, temporary jobs designed to teach soft skills and provide work experience. There is no expectation that host employers will hire participants permanently.
  • Wage Subsidy Models place participants directly into permanent positions. An employer receives a temporary subsidy covering all or part of an employee’s wages and, in return, is expected to move the individual into a regular, unsubsidized job if things go well.
  • Hybrid Models use a combination of modified transitional jobs and wage subsidies” (p.iii).

“The evaluation team will follow the groups for at least 30 months using government administrative records and individual surveys to measure a variety of outcomes such as employment, earnings, incarceration, public assistance receipt, and child support payments….The evaluations will carefully study the implementation of each program and will assess each program’s financial costs and benefits” (p.iii).

(Abstractor: Author)

Full publication title: Testing the Next Generation of Subsidized Employment Programs: An Introduction to the Subsidized and Transitional Employment Demonstration and the Enhanced Transitional Jobs Demonstration