Absence of conflict of interest.
Glosser, A., Barden, B., Williams, S., Anderson, C. (2016). Testing two subsidized employment approaches for recipients of Temporary Assistance for Needy Families: Implementation and early impacts of the Los Angeles County Transitional Subsidized Employment Program. (OPRE Report 2016-77). Washington, DC: Office of Planning, Research, and Evaluation. [Contrast 3: Paid work experience versus on-the-job training]
- The study’s objective was to examine the impact of paid work experience, part of Los Angeles’ Subsidized and Transitional Employment Demonstration, on employment, earnings, and public benefit receipt relative to on-the-job training. The authors also investigated related impacts, the profiles of which are available [here].
- The authors used regression methods in a randomized controlled trial study to examine the impacts of participating in paid work experience. The data sources included administrative wage records, subsidized employment payroll records, Temporary Assistance for Needy Families (TANF) benefit payment records, and survey data.
- The study found that paid work experience had positive, statistically significant impacts on employment, earnings, and benefit receipt compared with on-the-job training.
- The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the paid work experience program and not to other factors.
Los Angeles’ Subsidized and Transitional Employment Demonstration
Features of the Intervention
The Los Angeles Subsidized and Transitional Employment Demonstration implemented two programs providing subsidized employment to TANF recipients to improve their employment, earnings, benefit receipt, and well-being. Los Angeles County worked with 21 Worksource Centers (American Job Centers) to deliver the programs. The centers oversaw employer recruitment, subsidized job placement of participants, and case management during placements. Centers received $1,200 for every subsidized job placement and $400 for every participant who transitioned to an unsubsidized job. The paid work experience program provided people with work experience by placing them in a public or nonprofit sector job for six months. People who participated in the paid work experience program were paid minimum wage, with their wages fully subsidized by the Workforce Investment Board. The on-the-job training program provided people with a work environment aimed at mimicking real world employment. The program provided people with a private sector job for six months. Their wages were fully subsidized for two months by the Workforce Investment Board, then partially subsidized by the Workforce Investment Board by up to $550 a month in months three to six. The goal of the on-the-job program was to have participants continue to work with the employer in positions with unsubsidized wages.
Features of the Study
The authors employed a randomized controlled trial design. From November 2012 to November 2013, 2,622 eligible people receiving TANF benefits in 21 Worksource centers in Los Angeles County were randomly assigned to one of three groups. The three groups were a treatment group of 876 receiving paid work experience, a treatment group of 877 receiving on-the-job training, and a control group of 871 that did not have access to subsidized job opportunities but received other welfare-to-work services. To be eligible, the TANF recipients must (1) not have been able to obtain unsubsidized employment after a four-week job search with the help of TANF staff members and (2) have had barriers to employment such as limited work experience, low levels of education, criminal convictions, or prolonged spells on TANF. Among the people randomly assigned, the average age was 32; 85 percent were female; 55 percent were Hispanic, Latino, or Spanish; 32 percent were non-Hispanic African American; and 39 percent did not finish high school. This study examines the effects of the paid work experience program relative to the on-the-job program.
The authors used a statistical model to estimate the impact of paid work experience on employment, earnings, and benefit outcomes relative to the control condition, accounting for background characteristics of the people involved. The authors do not specify which characteristics were included in their model, but they collected various demographic variables such as age, race and ethnicity, percentage female, employment measures, number of children, educational attainment, whether the person has a disability, length of benefit receipt, and income. The data sources included administrative wage records, subsidized employment payroll records, TANF benefit payment records, and two surveys.
- The study found that people who received paid work experience were significantly more likely to be employed in the year after random assignment than those who received on-the-job training (by 16 percentage points based on administrative data and 9 percentage points based on self-reports).
- The study found that people who received paid work experience were significantly more likely to be employed in all four quarters after random assignment than those who received on-the-job training (by 7 percentage points).
Earnings and wages
- There was a positive, statistically significant impact of paid work experiences on earnings. People who received paid work experiences earned about $1,400 more during the year after random assignment than those who received on-the-job training.
Education or training attainment and completion
- The study found no impacts of paid work experience on earning a high school diploma or on earning a professional license or certification during the year after random assignment.
Public benefit receipt
- There were positive, statistically significant impacts of paid work experiences on TANF receipt. People who received paid work experiences were less likely to receive any TANF payments, and received about $300 less in TANF benefits, during the year after random assignment than those who received on-the-job training.
Considerations for Interpreting the Findings
There are two main considerations when interpreting the findings. First, the study includes analyses on more than 35 employment, earnings, and benefits outcomes, but the authors do not use statistical methods to adjust for the large number of analyses. Performing multiple statistical tests on related outcomes makes it more likely that some impacts will be found statistically significant purely by chance and not because of program’s impacts. It is possible that some of the findings reported in this profile are statistically significant because of chance and not because of the impacts of paid work experiences.
Second, the authors noted that more people in the treatment group were placed in paid work experience jobs (79 percent) than in the comparison group (42 percent). The positive findings for paid work experience might be attributable to more people receiving paid work experiences compared with a smaller proportion of people who received on-the-job training.
Causal Evidence Rating
The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the paid work experience program and not to other factors.