Public Service Employment and Mandatory Work: A Policy Whose Time Has Come and Gone and Come Again?

This paper examines what public service employment (PSE) has and has not been in the past and what it might be in the future. It tracks a mind numbing number of programs, yet finds reliable evidence sadly limited. Still there seems to be enough data to draw some sharp conclusions. PSE done wrong can be wasteful, inefficient displacing, and counterproductive. PSE done carefully seems to be able to increase employment, keep displacement near 25%, and produce genuinely valuable output. (And in some circumstances, PSE may raise earnings of low skilled workers more effectively than wage subsidies.) There are some critical tradeoffs in any PSE program: Jobs which are more likely to increase future earnings also tend to be more expensive and difficult to implement. Jobs which are more like "real" jobs seem to impart greater value to the community, but also carry a greater tendency to displace public workers. There is good reason to believe that states may have difficulty employing welfare recipients as they reach the harder to serve cases and as the economy moves into recession. Nonetheless, many states are currently implementing or planning small work programs. This experience may help them to better implement larger programs in the future.