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Testing a Financial Incentive to Promote Re-employment among Displaced Workers: The Canadian Earnings Supplement Project (ESP)

Author

Listed:
  • Howard S. Bloom

    (Manpower Demonstration Research Corporation, New York)

  • Saul Schwartz
  • Susanna Lui-Gurr

    (Social Research and Demonstration Corporation, Vancouver)

  • Suk-Won Lee

    (Hankuk University of Foreign Studies)

  • Jason Peng

    (Social Research and Demonstration Corporation, Vancouver)

  • Wendy Bancroft

    (Social Research and Demonstration Corporation, Vancouver)

Abstract

This article presents findings from a randomized experiment conducted in four Canadian provinces to measure the effects of a generous financial incentive that was designed to promote rapid re-employment among workers who were displaced from their jobs by changing economic conditions. The incentive tested was an earnings supplement which, for as long as 2 years and as much as $250 weekly, would replace 75 percent of the earnings loss incurred by displaced workers who took a new lower-paying full-time job within six months of receiving a supplement offer. Findings from the experiment indicate that although persons offered the supplement understood its terms and conditions, only 2 out of 10 actually received supplement payments. Furthermore, the supplement offer had little effect on job-search behavior, employment prospects, or receipt of unemployment insurance. Nevertheless, persons who received supplement payments benefited from them substantially. On average, they received payments for 64 weeks, totaling $8,705. © 2001 by the Association for Public Policy Analysis and Management.

Suggested Citation

  • Howard S. Bloom & Saul Schwartz & Susanna Lui-Gurr & Suk-Won Lee & Jason Peng & Wendy Bancroft, 2001. "Testing a Financial Incentive to Promote Re-employment among Displaced Workers: The Canadian Earnings Supplement Project (ESP)," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(3), pages 505-523.
    • Handle: RePEc:wly:jpamgt:v:20:y:2001:i:3:p:505-523
    DOI: 10.1002/pam.1005
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    References listed on IDEAS

    as
    1. Howard S. Bloom, 1990. "Back to Work: Testing Reemployment Services for Displaced Workers," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number btw, August.
    2. repec:mpr:mprres:856 is not listed on IDEAS
    3. Noel Gaston & Daniel Trefler, 1997. "The Labour Market Consequences of the Canada-U.S. Free Trade Agreement," Canadian Journal of Economics, Canadian Economics Association, vol. 30(1), pages 18-41, February.
    4. Patricia Anderson & Walter Corson & Paul Decker, "undated". "The New Jersey Unemployment Insurance Reemployment Demonstration Project: Follow-Up Report," Mathematica Policy Research Reports eba060d41b8145b5a230fa76b, Mathematica Policy Research.
    5. Meyer, Bruce D, 1996. "What Have We Learned from the Illinois Reemployment Bonus Experiment?," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 26-51, January.
    6. Atkinson, Anthony B & Micklewright, John, 1991. "Unemployment Compensation and Labor Market Transitions: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1679-1727, December.
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    Cited by:

    1. Brigitte C. Madrian, 2014. "Applying Insights from Behavioral Economics to Policy Design," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 663-688, August.
    2. Sinyagin, Yury (Синягин, Юрий) & Sheburakov, Ilya (Шебураков, Илья), 2018. "Rationale and development of a model for increasing the efficiency and effectiveness of public civil servants on the basis of a person-centered approach to management [Обоснование И Разработка Моде," Working Papers 061819, Russian Presidential Academy of National Economy and Public Administration.

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