Absence of conflict of interest.
Citation
Cummings, D. (2023). Effects of the Subsidized and Transitional Employment Demonstration on earnings after eight years. (OPRE Report No. 2023-204). U.S. Department of Health and Human Services, Administration for Children and Families, Office of Planning, Research and Evaluation. [Los Angeles Wage Subsidy Program]
Highlights
- The study's objective was to examine the impact of the Subsidized and Transitional Employment Demonstration (STED) on earnings and wages in seven sites. This profile focuses on Los Angeles’ wage subsidy program, the On-the-Job Training (OJT) program. The authors investigated similar research questions for other sites; profiles of those studies are available here:
- The study was a randomized control trial that assigned 1,748 participants to either the OTJ program or a control group. Using a baseline survey and administrative data from the National Directory of New Hires (NDNH), the author used a statistical model to compare the outcomes of treatment and control group members.
- The study did not find statistically significant effects of the OTJ program on annual or cumulative earnings in the eight years after study enrollment.
- The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized control trial. This means we would be confident that any estimated effects would be attributable to the OJT program, and not to other factors. However, the study did not find statistically significant effects.
Intervention Examined
Transitional Subsidized Employment: On-the-Job Training
Features of the Intervention
The Los Angeles Department of Public Social Services has been implementing subsidized employment programs for Temporary Assistance for Needy Families (TANF) recipients since 2003. TANF recipients in Los Angeles County who fail to find employment after four weeks in a “job club” are eligible to participate in the Transitional Subsidized Employment: On-the-Job Training (OJT) program. OJT participants are offered wage subsidized jobs in private sector organizations. OJT participants spend the first two months of their placement on the payroll of a Workforce Investment Board but spend the final four months of their placement on their employer’s payrolls, with employers receiving a partial subsidy of up to $550 per month. The OJT program aims to help participants obtain a permanent, unsubsidized placement at the same employer.
Features of the Study
The study was a randomized control trial conducted in Los Angeles, California to examine the impact of the OJT program. Of the 1,748 participants who enrolled in the study, 877 were randomly assigned to the OJT program (the treatment group) and 871 to the control group that had access to other services offered to TANF recipients. Across all study participants, more than half were Hispanic (55 percent), 32 percent were Black, and 7 percent were White. Nearly two in five did not have a high school diploma (39 percent). The study relied on multiple data sources for analysis, including a baseline survey at study enrollment and quarterly earnings and unemployment insurance data from the National Directory of New Hires (NDNH). The author used a statistical model to compare the outcomes of treatment and control group participants.
Findings
Earnings and wages
- The study did not find statistically significant differences in annual earnings between the treatment group and the control group in the eight years after study enrollment.
- The study also did not find a statistically significant difference in cumulative earnings between the treatment group and the control group over the eight-year follow-up period.
Causal Evidence Rating
The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized control trial. This means we would be confident that any estimated effects would be attributable to the OJT program, and not to other factors. However, the study did not find statistically significant effects.