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. [Twin Cities]
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 the Twin Cities’ Minnesota Subsidized and Transitional Employment Demonstration (MSTED). 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 799 participants to either the MSTED 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 participants.
- The study did not find statistically significant effects of MSTED on annual or cumulative earnings in the six 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 MSTED, and not to other factors. However, the study did not find statistically significant effects.
Intervention Examined
Minnesota Subsidized and Transitional Employment Demonstration
Features of the Intervention
Minnesota has been providing subsidized employment to Temporary Assistance for Needy Families (TANF) recipients since 2007. Minnesota Subsidized and Transitional Employment Demonstration (MSTED) participants are TANF recipients in the Twin Cities area who have been unable to find employment after six months or more of receiving TANF benefits. MSTED participants were offered one of two different subsidized employment options: temporary paid work experience in the non-profit or public sector (for participants who were less job ready) or wage-subsidized private-sector jobs that could eventually transition into unsubsidized permanent jobs (for participants with higher levels of job readiness). MSTED participants also received case management services available to TANF recipients.
Features of the Study
The study was a randomized control trial conducted in the Twin Cities metro area of Minnesota to examine the impact of MSTED. Of the 799 participants who enrolled in the study, 403 were randomly assigned to the MSTED (the treatment group) and 396 to the control group with access to other welfare-to-work services. Most study participants were women (81 percent). More than two-thirds were Black (65 percent), 16 percent were White, and 7 percent were Hispanic. More than two-thirds had a high school diploma (73 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 six 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 six-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 MSTED, and not to other factors. However, the study did not find statistically significant effects.