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Can Post-Employment Services Combined with Financial Incentives Improve Employment Retention for Welfare Recipients? Evidence from the Texas Employment Retention and Advancement Evaluation

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  • Dr Richard Dorsett

Abstract

Data from a recently-completed experimental program for out-of-work welfare recipients in Texas are used to examine the effects of a time-limited financial incentive coupled with post-employment services on recipients’ rates of entering and leaving employment. While there is strong evidence that such programs can increase overall employment, the crucial question of how these increases arise is not well-understood. This paper presents a rigorous analysis of employment entry and exit effects, using a fully-specified dynamic model of employment duration that accounts for non-random sorting into employment statuses through flexible specifications for duration dependence and unobserved heterogeneity. The results indicate that for the Corpus Christi site, short-term effects were due to both employment retention and employment entry but, over time (as the program ceased operation), the retention effects faded out but the employment entry effects persisted and grew. For the Fort Worth site, there were smaller effects overall and less evidence of impacts that lasted much beyond the program operation period.

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  • Dr Richard Dorsett, 2013. "Can Post-Employment Services Combined with Financial Incentives Improve Employment Retention for Welfare Recipients? Evidence from the Texas Employment Retention and Advancement Evaluation," National Institute of Economic and Social Research (NIESR) Discussion Papers 409, National Institute of Economic and Social Research.
    • Handle: RePEc:nsr:niesrd:409
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    1. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    2. Philip K. Robins & Charles Michalopoulos & Kelly Foley, 2008. "Are Two Carrots Better Than One? The Effects of Adding Employment Services to Financial Incentive Programs for Welfare Recipients," ILR Review, Cornell University, ILR School, vol. 61(3), pages 410-423, April.
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    Cited by:

    1. Dorsett, Richard, 2014. "The effect of temporary in-work support on employment retention: Evidence from a field experiment," Labour Economics, Elsevier, vol. 31(C), pages 61-71.
    2. Jesse Rothstein & Till von Wachter, 2016. "Social Experiments in the Labor Market," NBER Working Papers 22585, National Bureau of Economic Research, Inc.

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