Citation
Roder, A. & Elliott, M. (2013). Stimulating opportunity: An evaluation of ARRA-funded subsidized employment programs. New York: Economic Mobility Corporation. Retrieved from http://economicmobilitycorp.org/uploads/stimulating-opportunity-full-report.pdf.
Highlights
- The study’s objective was to examine the impact of subsidized employment programs in five states on the employment and earnings outcomes of unemployed people. The focus of this profile is Florida’s Back to Work program, which placed participants in partially subsidized jobs in which employers were expected to cover 5 to 20 percent of the employee’s wages for up to one year.
- For the evaluation of the Florida Back to Work program, the authors used administrative wage data to compare the employment and earnings outcomes of program participants with the employment and earnings outcomes of a similar group of people who were not placed in subsidized employment.
- The study found that participants in Florida Back to Work were more likely to be employed and earned $1,921 more in the year following the program than those in the comparison group.
- The quality of causal evidence presented in this report is low because the authors did not include sufficient controls in their analysis. This means we are not confident that the estimated effects are attributable to the subsidized employment program. Other factors are likely to have contributed.
Intervention Examined
Florida's Back to Work Program
Features of the Intervention
The Temporary Assistance to Needy Families Emergency Fund (EF) was created in 2009 through the American Recovery and Reinvestment Act. The EF was intended to help states create or expand subsidized employment programs that created jobs for unemployed people and encouraged employers to hire workers. Participants were placed in subsidized positions with nonprofits, for-profit firms, and public agencies for a fixed time period, and their salaries were partially or fully subsidized. Florida’s Back to Work program, administered by the Agency for Workforce Innovation, placed participants in partially subsidized jobs in which the employers were expected to cover 5 to 20 percent of an employee’s wages. For-profit firms that participated were required to commit to keeping the employee after the subsidy period ended. Positions could last up to one year; however, the program lasted only six months and the duration of many positions was much shorter. All programs funded through EF ended in September 2010.
Features of the Study
The study included five states, for which the authors conducted a pre-post analysis in which participants’ earnings and employment in the four quarters following completion of the program were compared with their outcomes in the four quarters before participating in the program. This type of analysis can describe the experiences of participants but cannot determine whether they were better off as a result of participating in the program.
The authors attempted a more rigorous analysis, which is the focus of this profile, of the EF subsidized employment programs in Florida. Officials provided data on a group of unemployed people who were eligible for the Back to Work program but never participated. The authors compared the employment and earnings outcomes of the group that was placed into subsidized jobs with the outcomes of the comparison group that was not placed into subsidized jobs, and tested for significant differences between the two groups. Data on participant characteristics were obtained from the Agency for Workforce Innovation; participants’ quarterly employment and earnings were collected from Florida’s Unemployment Insurance wage reporting system. The authors used 2009 as the pre-program period and 2011 as the post-program period.
Findings
- The study found that the employment rates among Florida Back to Work participants were 23 percentage points higher than employment rates in the comparison group in the first quarter of 2011, and 5 to 7 percentage points higher than the comparison group in the following three quarters. Earnings were also higher in the program group than in the comparison group; however, it was not until the third quarter of 2011 that post-program earnings in the program group exceeded that group’s pre-program earnings.
- Florida Back to Work participants earned $1,921 more, on average, in 2011 than those in the comparison group.
Considerations for Interpreting the Findings
The analyses for each state in which participants’ earnings and employment in the four quarters following completion of the program were compared with those same participants’ outcomes in the four quarters before participating in the program can describe the experiences of participants, but cannot determine whether the participants were better off as a result of participating in the program. Thus, these analyses have low causal evidence.
For the more rigorous analysis in Florida, the study did not appear to statistically control for demographic characteristics or earnings measured more than 12 months before program participation in the calculation of impacts. These statistical controls are required to receive a moderate causal evidence rating, the highest rating possible for nonexperimental studies.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the authors did not include sufficient statistical controls in their analysis. This means we are not confident that the estimated effects are attributable to the subsidized employment program. Other factors are likely to have contributed.