Transitional and subsidized jobs

Evidence Rating  
Scientifically Supported
Evidence rating: Scientifically Supported

Strategies with this rating are most likely to make a difference. These strategies have been tested in many robust studies with consistently positive results.

Health Factors  
Decision Makers

Transitional jobs are time-limited, subsidized, paid jobs intended to provide a bridge to unsubsidized employment. These positions are generally available to hard-to-employ individuals, such as those with limited or no job history, Temporary Assistance for Needy Families (TANF) recipients, individuals with disabilities, or individuals with criminal records. Transitional jobs can be in government, non-profit, or for-profit organizations, and may be combined with training and additional services, such as individual placement and support services, to help participants overcome barriers to employment and build work-related skills1. Additional services for individuals with disabilities can include sheltered workshop programs, social enterprises, and clubhouse programs2, 3.

Expected Beneficial Outcomes (Rated)

  • Increased employment

  • Increased earnings

Other Potential Beneficial Outcomes

  • Reduced recidivism

  • Reduced poverty

Evidence of Effectiveness

There is strong evidence that transitional and subsidized jobs programs increase employment and earnings for low income adults, youth, unemployed individuals, TANF recipients, and individuals recently released from prison for the duration of their subsidized position1, 4, 5, 6, 7, 8, 9, 10. However, these gains do not appear to consistently last beyond the duration of the transitional job4, 8, 9, 10.

Some transitional jobs programs can increase competitive employment and earnings after subsidized employment ends7, 11, 12, particularly for those that have been out of the workforce longer and those without a high school diploma4. Participants in 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 later5. However, transitional job programs appear to have no effect on longer term employment among TANF recipients and individuals who have been incarcerated4, 8, 9, 10.

Transitional jobs programs may reduce recidivism among individuals who have been incarcerated, particularly those at highest risk of re-offending4, 9, 10, 12. 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-offend10, 13. 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 rates4, 9.

Noncustodial parents may increase child support payments during program participation, though impacts fade after the programs end4.

Overall, transitional jobs without additional supports may not increase employment for individuals with severe mental illness2, 14, 15, with only small increases in long-term employment with extra supportive services2. 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)14.

Evaluations of ETJD suggests characteristics such as a program’s strategy, ability to find job placements, and commitments required of employers impact program success4. 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 employers7, but in ETJD programs it was in non-profit employers5. 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 system15.

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 ETJD costs ranged from $3,300 to $11,100 per participant4, while Wisconsin’s implementation of ARRA-subsidized job funding had an average cost per subsidized placement of $7,9137. 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 launch16. Cost benefit analysis of several programs suggest some transitional jobs programs can generate positive net benefits4, 13, though they may not save money for the government4. 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 earnings13.

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 almost 1 million children. Provision of jobs at this scale would cost approximately $23.1 billion17. 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 poverty6, 18.

The US has experienced 2 economic crises since 2007, with unemployment rates peaking at 10.6% in the Great Recession and 14.8% during the COVID-19 pandemic. Workers of color are more likely to experience a higher rate of unemployment in times of economic crises: for example, during the Great Recession unemployment rates for Black and Latino workers were 16% and 13%, respectively, while the white unemployment rate was 8%. Workers of color are also more likely to experience a slower return to pre-crisis unemployment levels during economic recoveries19. Subsidized employment appears to be most beneficial for individuals with the biggest barriers to employment, such as being unemployed,4 and may contribute to a more equitable economic recovery19.

Impact on Disparities

Likely to decrease disparities

Implementation Examples

Transitional jobs programs exist throughout the country20 but are not universally available.

The Enhanced Transitional Jobs Demonstration (ETJD) was a multisite project by the Department of Labor to test new subsidized employment models for hard-to-employ populations such as welfare recipients, former prisoners, and low income noncustodial parents5. Some results of a second multisite project with the same goals, the Department of Health and Human Services’ Subsidized and Transitional Employment Demonstration (STED), are now available4.

In 2020, Baltimore, Maryland launched the Baltimore Health Corps, where they recruited, trained, and employed 300 residents who had lost their jobs due to the COVID-19 pandemic, to support the city’s response to the crisis21. Colorado has a transitional jobs program that gives priority to unemployed or underemployed non-custodial parents, veterans, or displaced workers that are fifty years of age or older22.

Implementation Resources

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

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

Footnotes

* Journal subscription may be required for access.

1 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, DC: Center on Poverty and Inequality, Georgetown University Law Center; 2016.

2 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.

3 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.

4 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.

5 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.

6 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.

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

8 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, DC: Office of Planning, Research and Evaluation (OPRE), Administration for Children and Families (ACF), US Department of Health and Human Services (US DHHS); 2012.

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

10 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, DC: Office of Planning, Research and Evaluation (OPRE), Administration for Children and Families (ACF), US Department of Health and Human Services (US DHHS); 2012.

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

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

13 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.

14 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.

15 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.

16 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.

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

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

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

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

21 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.

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

Date Last Updated