IZA published an RCT of ReHire Colorado, a state program providing transitional, subsidized jobs to low-income unemployed or underemployed individuals. Quick take: High-quality RCT finds little impact on participant earnings or employment once the transitional jobs end.

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Program:

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• ReHire Colorado places participants in temporary jobs with local employers and pays their full wages for up to 30 weeks. It seeks to match participants to jobs they're well-suited for, with the goal of transitioning them to unsubsidized employment with the host employer.

 

Study Design:

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• The study sample comprised 1,931 individuals randomly assigned to treatment (T) vs control (C). 62% of treatment group members were successfully placed in a transitional job. Based on careful review, this was a high-quality RCT (e.g., baseline balance, negligible attrition for employment and earnings outcomes).

 

Findings:

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• In Year 1 after program entry, the study found a statistically significant 14% gain in average earnings and 21% gain in time employed. But this is likely just due to the treatment group's receipt of transitional jobs that year (i.e., it's a measure of program implementation, not enduring impact).

• In year 2, after transitional jobs ended, the effects unfortunately faded. Average T & C earnings in year 2 were low ($9,948 T vs $9,320 C) and the difference between treatment and control ($628, or 7%) wasn't statistically significant. The T-C difference in time employed in year 2 was close to statistical significance, but small (about 2 weeks).

• The study reported positive effects on employment stability, job quality, and well-being, but these effects were based on a survey that had sample attrition of >50% (and sizable T-C differences in attrition), so are not reliable.