Transitional and subsidized jobs

There is strong evidence that transitional and subsidized jobs programs increase employment and earnings for low income adults, youth, unemployed individuals, Temporary Assistance for Needy Families (TANF) recipients, and recently released former prisoners for the duration of their subsidized position (MDRC-Cummings 2020, MDRC-Barden 2018, Georgetown-Dutta-Gupta 2016, Mathematica-Maxwell 2015, EMC-Roder 2013, OPRE-Butler 2012, MDRC-Jacobs 2012, OPRE-Redcross 2012). However, these gains do not appear to consistently last beyond the duration of the transitional job (MDRC-Cummings 2020, OPRE-Butler 2012, MDRC-Jacobs 2012, OPRE-Redcross 2012).

Some transitional jobs programs can increase competitive employment and earnings after subsidized employment ends (CLASP-Baider 2006, MDRC-Bloom 2010a, EMC-Roder 2013), particularly for those that have been out of the workforce longer and those without a high school diploma (MDRC-Cummings 2020). Participants from some programs of the U.S. Department of Labor’s Enhanced Transitional Jobs Demonstration (ETJD) project were more likely to be working in full-time, permanent jobs, earning over $10 per hour, and to have employer-sponsored health insurance 30 months later (MDRC-Barden 2018). Transitional job programs appear to have no effect on longer term employment among TANF recipients and individuals who have been incarcerated (MDRC-Cummings 2020, OPRE-Butler 2012, MDRC-Jacobs 2012, OPRE-Redcross 2012).

Transitional job programs may reduce recidivism among individuals who have been incarcerated, particularly those at highest risk of recidivism (MDRC-Cummings 2020, MDRC-Jacobs 2012, OPRE-Redcross 2012, MDRC-Bloom 2010a). The Center for Employment Opportunities’ program in New York City and the RecycleForce program in Indiana, for example, reduced recidivism among participants who entered the program within four months of release from prison, particularly those who were more disadvantaged and those most likely to re-offend (MDRC-Foley 2018, OPRE-Redcross 2012). However, the Transitional Jobs Reentry Demonstration and two of the three programs from the Subsidized and Transitional Employment Demonstration (STED) did not appear to affect recidivism rates (MDRC-Jacobs 2012, MDRC-Cummings 2020).

Non-custodial parents may increase child support payments during program participation, though impacts fade after the programs end (MDRC-Cummings 2020).

Transitional jobs without additional supports may not increase employment for individuals with severe mental illness (Davis 2018b, Cochrane-Suijkerbuijk 2017, Abraham 2017), with only small increases in long-term employment (Cochrane-Suijkerbuijk 2017). For example, transitional work rehabilitation programs through Veterans Affairs medical centers appear to have small or no effects on long-term employment for participating veterans with Post-Traumatic Stress Disorder (PTSD) (Davis 2018b).

The Enhanced Transitional Jobs Demonstration (ETJD) suggests characteristics such as program strategy, ability to find job placements, and required employer commitments impact program success (MDRC-Cummings 2020). Employer characteristics are not consistent predictors of success: for example, in programs supported by the American Recovery and Reinvestment Act (ARRA), permanent employment was typically with for-profit employers (EMC-Roder 2013), but in ETJD programs it was with non-profit employers (MDRC-Barden 2018). A study of the transitional work program for veterans with PTSD found placement in community settings was more effective than placement in the Veterans Health Administration system (Abraham 2017).

Program costs vary based on program structure (e.g., maximum wage rates and hours worked, percentage of wages and payroll costs subsidized, and maximum time allowed for participation). For example, in the Enhanced Transitional Jobs Demonstration (ETJD) costs ranged from $3,300 to $11,100 per participant (MDRC-Cummings 2020), while Wisconsin’s implementation of ARRA-subsidized job funding had an average cost per subsidized placement of $7,913 (EMC-Roder 2013). Initial start-up costs for a subsidized employment program are significant, but some programs can increase earnings and employment for participants within the first year of program launch (Geckeler 2019). Cost benefit analysis of several programs suggest some transitional jobs programs can generate positive net benefits (MDRC-Cummings 2020, MDRC-Foley 2018), though they may not save money for the government (MDRC-Cummings 2020). For example, a cost benefit analysis of RecycleForce, an ETJD program in Indiana, found a $2,200 net benefit per person due to the sustained impacts on recidivism and earnings (MDRC-Foley 2018).

A recent report projects that providing subsidized jobs to unemployed and underemployed individuals in families with children would reduce child poverty by 8.6%, or 0.8 million children. Provision of jobs at this scale would cost approximately $23.1 billion (Urban-Minton 2019). Income gains to participants in transitional and subsidized jobs programs may be offset by reduced government benefits and increased taxes, creating barriers to program success and transitioning participants out of poverty (CDF 2015, Mathematica-Maxwell 2015).

It is unclear what impact transitional and subsidized jobs programs have on disparities in employment and earnings between the general population and individuals who are hard-to-employ or historically disadvantaged workers such as Temporary Assistance for Needy Families (TANF) recipients, people with criminal records, older workers, other long-term unemployed individuals. While there is strong evidence that such programs increase employment and earnings for the duration of the subsidized position, these gains do not appear to consistently last beyond the duration of the transitional job (MDRC-Cummings 2020, OPRE-Butler 2012, MDRC-Jacobs 2012, OPRE-Redcross 2012), except in some circumstances (MDRC-Barden 2018, Cochrane-Suijkerbuijk 2017). Subsidized employment is likely to be most beneficial for individuals with the biggest barriers to employment (MDRC-Cummings 2020). Transitional job programs also have the potential to decrease disparities in employment for individuals who have been incarcerated, particularly those who are more disadvantaged and those most likely to re-offend (MDRC-Foley 2018, OPRE-Redcross 2012).

Subsidized and transitional jobs programs are often used as a tool during economic crises, which further exacerbate racial inequities and poverty, harm workers of color, and worsen conditions for other historically disadvantaged workers; using these programs may contribute to more equitable economic recoveries (CBPP-Meyer 2021).

Subsidized employment programs were initially created as tools to support workers during economic crises. In response to the Great Depression, President Franklin D. Roosevelt’s New Deal programs, including the Work Progress Administration (WPA), were established to stabilize the economy and provide jobs and relief to workers in the 1930s (MDRC-Cummings 2020). Over the decades, programs have expanded to support workers who experience high rates of joblessness, even when labor market conditions are good (MDRC-Cummings 2020). For example, in the 1970s the National Supported Work Demonstration expanded subsidized work programs to women receiving Aid to Families with Dependent Children and individuals who were formerly incarcerated, and the Youth Incentive Entitlement Pilot Project provided jobs to disconnected youth (Georgetown-Dutta-Gupta 2016). More recently, in 2010, the U.S. Department of Health and Human Services launched the Subsidized and Transitional Employment Demonstration (STED) and the U.S. Department of Labor launched the Enhanced Transitional Jobs Demonstration (ETJD), two complementary, large-scale research projects designed to build rigorous evidence on the effectiveness of the latest generation of subsidized employment models and to inform future program development, providing jobs to individuals who were formerly incarcerated or are non-custodial parents (MDRC-Cummings 2020).

Given the history of overincarceration of people of color (who make up more than two thirds of the prison population) and the discriminatory hiring practices individuals face following release from prison, effective transitional jobs for those who were previously incarcerated are needed. Half of individuals released from prison are reincarcerated within three years (OPRE-Redcross 2012). Even without the burden of a criminal record, Black and Hispanic workers are more likely to experience a higher rate of unemployment during an economic crisis and are more likely to experience a slower return to pre-crisis unemployment levels during economic recoveries. During the Great Recession, the unemployment rate for Black workers was 16% compared to 8% for white workers (CBPP-Meyer 2021), making transitional and subsidized jobs an important tool for just economic recoveries.

• What population(s) is the subsidized employment program recruiting from?
• What additional supports or resources can subsidized employment program include to better support their target population and improve long-term outcomes?
• How can transitional jobs programs partner with local or regional employers to meet current and future workforce needs?
• How can program implementation support a more equitable recovery during times of economic crises?
• What underlying conditions contribute to training and skills gaps in your community? What other strategies can be implemented to address those underlying conditions?

Transitional jobs programs exist across the country (Georgetown-Subsidized Employment Programs) but are not universally available.

The Enhanced Transitional Jobs Demonstration (ETJD) was a multi-site project by the U.S. Department of Labor to test new subsidized employment models for hard-to-employ populations such as welfare recipients, former prisoners, and non-custodial parents with low incomes (MDRC-Barden 2018). Some results are now available from a second multi-site project with the same goals, the U.S. Department of Health and Human Services’ Subsidized and Transitional Employment Demonstration (STED) (MDRC-Cummings 2020).

In 2020, Baltimore, Maryland launched the Baltimore Health Corps, which recruited, trained, and employed 300 residents who lost their jobs due to the COVID-19 pandemic, to support the city’s response to the crisis (Rockefeller-Baltimore Health Corps 2020). Colorado has a transitional jobs program that prioritizes unemployed or underemployed non-custodial parents, veterans, or displaced workers that are fifty years of age or older (NCSL-WD Legislation 2019).

CEO - Center for Employment Opportunities (CEO). Change that works.

Georgetown-Subsidized Employment Programs - Eckel M, Belledonne J, Bambrick B, et al. Subsidized employment programs. Washington, D.C.: Center on Poverty and Inequality, Georgetown University Law Center; 2021.

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Abraham 2017 - Abraham KM, Yosef M, Resnick SG, Zivin K. Competitive employment outcomes among veterans in VHA therapeutic and supported employment services programs. Psychiatric Services. 2017;68(9):938-946.

CBPP-Meyer 2021 - Meyer BL. Subsidized employment: A proven strategy to aid an equitable economic recovery. Washington, D.C.: Center for Budget and Policy Priorities (CBPP); 2021.

CDF 2015 - Ending child poverty now. Washington, D.C.: Children's Defense Fund (CDF); 2015.

CLASP-Baider 2006 - Baider A, Frank, A. Transitional jobs: Helping TANF recipients with barriers to employment succeed in the labor market. Washington, D.C.: Center for Law and Social Policy (CLASP); 2006.

Cochrane-Suijkerbuijk 2017 - Suijkerbuijk YB, Schaafsma FG, van Mechelen JC, et al. Interventions for obtaining and maintaining employment in adults with severe mental illness, a network meta-analysis. Cochrane Database of Systematic Reviews. 2017;9(7):CD011867.

Davis 2018* - Davis KC, Patel D, Shafer P, et al. Association between media doses of the Tips From Former Smokers campaign and cessation behaviors and intentions to quit among cigarette smokers, 2012-2015. Health Education and Behavior. 2018;45(1):52-60.

Davis 2018b - Davis LL, Kyriakides TC, Suris AM, et al. Effect of evidence-based supported employment vs transitional work on achieving steady work among veterans with posttraumatic stress disorder a randomized clinical trial. JAMA Psychiatry. 2018;75(4):316-324.

EMC-Roder 2013 - Roder A, Elliott M. Stimulating opportunity: An evaluation of ARRA-funded subsidized employment programs. New York: Economic Mobility Corporation (EMC); 2013.

Geckeler 2019 - Geckeler C, Folsom L, Hebbar L, et al. The impact of a social enterprise and workforce system operated transitional employment program in Los Angeles: Final report for the impact evaluation of the Los Angeles Regional Initiative for Social Enterprise (LA:RISE) Pilot Program. Oakland: Social Policy Research Associates (SPR); 2019.

Georgetown-Dutta-Gupta 2016 - Dutta-Gupta I, Grant K, Eckel M, Edelman P. Lessons learned from 40 years of subsidized employment programs: A framework, review of models, and recommendations for helping disadvantaged workers. Washington, D.C.: Center on Poverty and Inequality, Georgetown University Law Center; 2016.

Georgetown-Subsidized Employment Programs - Eckel M, Belledonne J, Bambrick B, et al. Subsidized employment programs. Washington, D.C.: Center on Poverty and Inequality, Georgetown University Law Center; 2021.

Mathematica-Maxwell 2015 - Maxwell NL, Rotz D. Building the employment and economic self-sufficiency of the disadvantaged: The potential of social enterprises. Princeton: Mathematica Policy Research (MPR); 2015.

MDRC-Barden 2018 - Barden B, Juras R, Redcross C, Farrell M, Bloom D. New perspectives on creating jobs: Final impacts of the next generation of subsidized employment programs. New York: Manpower Demonstration Research Corporation (MDRC); 2018.

MDRC-Bloom 2010a - Bloom D. Transitional jobs: Background, program models, and evaluation evidence. New York: Manpower Demonstration Research Corporation (MDRC); 2010.

MDRC-Cummings 2020 - Cummings D, Bloom D. Can subsidized employment programs help disadvantaged job seekers? A synthesis of findings from evaluations of 13 programs. New York: Manpower Demonstration Research Corporation (MDRC); 2020.

MDRC-Foley 2018 - Foley K, Farrell M, Webster R, Walter J. Reducing recidivism and increasing opportunity: Benefits and costs of the RecycleForce enhanced transitional jobs program. New York: Manpower Demonstration Research Corporation (MDRC); 2018.

MDRC-Jacobs 2012 - Jacobs E. Returning to work after prison: Final results from the transitional jobs reentry demonstration. Manpower Demonstration Research Corporation (MDRC); 2012.

NCSL-WD Legislation 2019 - National Conference of State Legislature (NCSL). 2017 and 2018 Workforce Development Enactments.

OPRE-Butler 2012 - Butler D, Alson J, Bloom D, et al. What strategies work for the hard-to-employ: Final results of the hard-to-employ demonstration and evaluation project and selected sites from the employment retention and advancement project. Washington, D.C.: Office of Planning, Research and Evaluation (OPRE), Administration for Children and Families (ACF), U.S. Department of Health and Human Services (U.S. DHHS); 2012.

OPRE-Redcross 2012 - Redcross C, Millenky M, Rudd T, Levshin V. More than a job: Final results from the evaluation of the Center for Employment Opportunities (CEO) transitional jobs program. Washington, D.C.: Office of Planning, Research and Evaluation (OPRE), Administration for Children and Families (ACF), U.S. Department of Health and Human Services (U.S. DHHS); 2012.

Rockefeller-Baltimore Health Corps 2020 - Rockefeller Foundation. New ‘Baltimore health corps’ to hire and train hundreds of jobless residents to serve neighborhoods hardest-hit by Covid-19.

Urban-Minton 2019 - Minton S, Giannarelli L, Werner K, Tran V. Reducing child poverty in the U.S.: An updated analysis of policies proposed by the children’s defense fund. Washington, D.C.: Urban Institute; 2019.

WI DCF-Employment Services - Wisconsin Department of Children & Families (WI DCF). Employment Services.