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Subsidized Jobs Programs Work, New Report Shows

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A new report from Georgetown’s Center on Poverty and Inequality draws on 40 years of evidence from subsidized jobs programs to call for increased federal, state, and local investments in these strategies, describing them as “underutilized, potentially powerful tools for lifting up workers in or at risk of poverty and deep poverty.”

The report profiles dozens of programs that placed participants in jobs in the public, non-profit, or for-profit sectors.  Many targeted specific vulnerable populations such as young people who aren’t in school or working, single mothers, non-custodial parents, or workers with a criminal conviction.  Many programs offered training or education before or during the job placement; some also provided “wraparound” services such as transportation assistance or housing referrals.

Subsidized jobs programs can provide short-term income support to help people with employment barriers (such as limited skills or a criminal conviction) shift to unsubsidized employment.  They also can provide temporary support for workers in an economic downturn.  During the recent recession, for example, state programs funded by the TANF Emergency Fund (a product of the 2009 Recovery Act) created more than 260,000 jobs as unemployment soared.    

Many of the programs have rigorous evaluations either completed or ongoing.  Evidence shows these initiatives provide much-needed income and can lead to longer-term benefits such as unsubsidized employment, higher earnings, less use of public benefits, improved educational outcomes for participants’ children, and fewer interactions with the criminal justice system.

While more experimentation is still needed, especially for people with the most serious employment barriers, “enough is known today for a significant, national effort to expand subsidized employment programs,” the report explains.  Its recommendations include making subsidized jobs programs a permanent part of federal employment policy and providing substantial, dedicated funding.  Permanent programs can alleviate poverty even in good economic times and scale up more easily during a recession.  Dedicated funding would encourage innovation and provide the resources needed to “make meaningful headway against poverty.”