Citation
Dorsett, R., Hendra, R., Robins, P. K., & Williams, S. (2013). Can post-employment services combined with financial incentives improve employment retention for welfare recipients? Evidence from the Texas Employment Retention and Advancement evaluation. (No. 1413-13). Madison, WI: Institute for Research on Poverty.
Highlights
- The study’s objective was to examine the impact of the Texas Employment Retention and Advancement (ERA) program on employment entry and retention in two sites: Corpus Christi and Fort Worth.
- The authors conducted a non-experimental study using data originally collected for a randomized controlled trial. They analyzed survey data and state Unemployment Insurance records to estimate the effects of the ERA program on employment entry and retention.
- The study found a positive and statistically significant relationship between participation in the ERA program and the likelihood of transitioning into employment and between ERA and employment retention at the Corpus Christi site.
- The quality of causal evidence presented in this report is low because the authors did not account for differences in wages or employment between the ERA and comparison groups before the beginning of the ERA program. This means we are not confident that the estimated effects are attributable to the Texas ERA program; other factors are likely to have contributed.
Intervention Examined
Texas Employment Retention and Advancement (ERA)
Features of the Intervention
The Texas ERA program was offered to people applying for or receiving cash assistance under the Temporary Assistance for Needy Families (TANF) program in Texas. Most applicants were not working when they entered the program. The program included pre-employment services such as job-search assistance and a monthly supplement of $200 for participants exiting TANF who worked more than 30 hours per week after receiving an earned income disregard for four months (earned income disregards allow for some income to not be counted against cash aid or other benefits). Participants also received post-employment services such as employer site visits and reemployment assistance provided by local workforce development boards.
Features of the Study
In the original evaluation of the ERA program, participants were randomly assigned to the ERA program (treatment group) or to the control group. The treatment and control groups both received pre-employment services focused on quick job entry. However, only the treatment group received the post-employment services or the financial incentive. Although the sample was originally randomized, the authors examined outcomes only for those who entered employment, who were unlikely to be a random subgroup. To address this nonrandom selection, the authors used a non-experimental approach to simultaneously estimate time to employment entry and time to employment exit (that is, retention). The study used data from the Fort Worth and Corpus Christi ERA sites from 2000 to 2002. There were 3,123 participants in the sample at the time of random assignment. The authors restricted the sample to women. Roughly half of the participants had a high school degree and more than 60 percent were between the ages of 18 and 29. More than half the sample had one or more children. More than 60 percent had received previous cash assistance, and about 60 percent had two years or less of previous employment. TANF program staff collected data on participants’ characteristics during program enrollment. The authors obtained employment and quarterly wage data from the Texas Unemployment Insurance system.
Findings
- At Corpus Christi, for those who were unemployed when the study began, the ERA program increased the likelihood of transitioning into employment by 14.3 percent. For those who were employed when the study began, ERA increased retention (that is, it decreased the likelihood of transitioning out of employment) by 13.1 percent.
- At Corpus Christi, when estimating the effects separately during and after the program, the authors found that ERA increased the likelihood of transitioning into employment by 13.6 percent during the program period. It also increased retention by 17.6 percent during the program period.
- The study found no statistically significant relationships between ERA and any outcomes at the Fort Worth site.
Considerations for Interpreting the Findings
Although selection into the ERA program was by random assignment, the authors examined a nonrandom subsample of the originally randomly assigned sample and did not account for differences that existed between the treatment and comparison groups before the program began.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the authors did not account for differences in wages or employment between the ERA and comparison groups before the beginning of the ERA program. This means we are not confident that the estimated effects are attributable to the Texas ERA program; other factors are likely to have contributed.