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7 Effectiveness of Temporary Jobs Programs Programs providing temporary subsidized employment have been a mainstay of youth employment and training efforts in the United States since the War on Poverty. The committee reviewed five reports on YEDPA programs that provided temporary jobs for youths. Three served out-of-school youths exclusively: Ventures in Community Improvement (VICI), Supported Work, and the Public Versus Private Sector Jobs Demonstration Project. Two were designed primarily for in-school youths: the Summer Youth Employment Program (SYEP) and the Youth Incentive Entitlement Pilot Projects (YIEPP). PROGRAMS FOR OUT-OF-SCHOOL YOUTHS Table 7.1 presents the characteristics of the three serving out-of-school youths. Table 7.2 summarizes the and results of the evaluations of those programs. Ventures in Community Improvement programs research design Ventures in Community Improvement was a demonstration project operated under the Youth Community Conservation and Improvement Projects (YCCIP) part of YEDPA. The target population consisted of youths aged 16-19 who were out of school, had employment difficulties, or were economically disadvantaged (eligible for CETA). The program provided participants with up to 12 months of work experience (on average, participants stayed for 6 months) on construction projects to improve public or low-income housing. Participants were supervised by union journeymen at a ratio of 6 to 1. Job placement assistance was provided to those completing the program, and participants were actively encouraged to complete a General Equivalency Diploma (GED) program. One objective of the project was to determine the impact of the program on participants' subsequent labor market outcomes. Other objectives were to test the feasibility of replicating the program model on a broader scale and to find a way to measure the value of the community housing improvements produced under the program. In all, there were eight sites involving a total of 1,500 participants. The demonstration 137

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140 was implemented between September 1978 and February 1979 and concluded in all sites in September 1980. Comparison groups were derived from three sources: participants in YCCIP programs run by the Department of Housing and Urban Development (HUD; operating under an interagency agreement with the Department of Labor) in four sites that overlapped VICI; youths in formula-funded YCCIP construction programs in three sites; and youths randomly selected from VICI waiting lists after the programs were fully enrolled with youths judged to be the most motivated. According to the evaluation report, objections raised by the Department of Labor and a pressing need to launch the VICI project without further delay were cited as the reasons for not following a true randomized evaluation design. Unfor- tunately, few detailed data on participants in non-VICI programs are provided and no data are provided on comparison group members drawn from the VICI waiting lists. Postprogram follow-up data were obtained from interviews adminis- tered to comparison groups as well as the VICI participants at 1 month, 3 months, and 8 months postprogram. Final samples used for estimating effects varied from 160 to 500 VICI participants and from 160 to 650 comparison group members. Although long-term program effects could not be estimated, the statistically significant estimated short-term effects of VICI relative to individuals drawn from VICI waiting lists were (1) an increased probability of employment; (2) an increased probability of being in an apprenticeship position or on an apprenticeship waiting list; and (3) higher quarterly earnings (a maximum of $1,050 with an average effect of $3221.~ Not surprisingly, comparisons among VICI, HUD, and other YCCIP participants failed to identify a dominant program. All of the effects of VICI participation were estimated after controlling for demographic characteristics, geographical location, and the date of the participant's most recent interview. The evaluation report states that personal characteristics did not exhibit statistically significant effects on outcomes, while site differences did, but these results are not shown in the report. The evaluation design of the study is seriously flawed in several respects. The nature of the various programs used to make comparisons with VICI, as well as the participants, differed from VICI. The YCCIP The analyses of outcomes are based on various multivariate tech- niques, including binomial logit, log-linear regression, and tobit analysis. The interpretation of the program effects therefore varies. For example, the finding with respect to employment is that the likelihood of employment is 111 percent higher among VICI participants than among "controls." This finding implies that for a participant whose probability of employment was 0.5 prior to the program the probability would be about 0.68 after participating; one whose employment probability was 0.9 prior to participating would have ~ probability of 0.95 of being employed after participating in the VICI program.

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141 . programs often served 10 or fewer youths, and the HUD and VICI programs usually enrolled more, up to 120 and 60, respectively. In addition, both the supervisory ratios in the programs and the nature of the work differed from VICI. VICI programs were construction oriented; the HUD and YCCIP programs included less skilled activities, usually landscaping and neighborhood cleanup (in YCCIP). VICI participants were older and less likely to be enrolled in school. Because of high sample attrition (only 37 percent of the VICI participants and 35 percent of the combined comparison groups were interviewed at the 8-month follow-up), the data actually used for assessing program effects consisted of the most recent interview data for each participant who was interviewed at least once after program completion. In addition to the lack of equivalence in geographical coverage, the follow-up sample for VICI participants differed not only from the general VICI participant population but also from the HUD and YCCIP comparison groups. The study could not determine what, if any, biases would be present as a result of differences between the follow-up samples and the total client populations. Given the severe shortcomings of the evaluation design, what, if anything, can be learned? The report may provide reliable insights and documentation regarding implementation and program delivery issues. Some attention was paid in the report to the optimal degree of site adherence to a standard plan and latitude for across-site variations to ~ ~ ~ ~ ~ _ ~ ~ _ ~ _ me: ~ : ~ _ -_ ~lIUII~U"~= lU~1 ~11~1~1~1~. The report clearly identifies the fact that referral agencies had little incentive to refer potential clients to the competing VICI project. The educational link is shown to be weak: educational institutions had little incentive to play an important role in the project. Moreover, participants lacked the energy and motivation to pursue adult education at the end of a day on a construction project. The involvement of union journeymen as crew supervisors turned out to be particularly helpful in job placements because of the journeymen's knowledge of the informal labor market and their contacts; their referrals and recommendations carried more weight than comparable activities by CETA job developers. Although an evaluation of the long-term program effects is ruled out by the small sample size and limited follow-up period, the study does attempt a benefit-cost analysis of the program from a societal point of view. Under a variety of alternative assumptions, the present value of the benefits consistently exceeds the present value of the costs. However, benefit-cost calculations are only as credible as the underlying estimated program effects, and the evaluation study fails to provide reliable evidence on the effectiveness of the VICI program in changing the employment and earnings prospects of disadvantaged young people. Supported Work Supported Work was a national demonstration program begun in 1975. The program concentrated on four target groups: women who had been receiving Aid to Families with Dependent Children (AFDC) for several

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142 years; ax-addicts; ax-offenders; and young (17- to 20-year-old) high school dropouts. Five of the 15 sites enrolled dropouts. Dropouts participating in the program had no immediate plans for further educa- tion and were without immediate employment prospects; many had a history of delinquency. Supported Work sought to inculcate participants with the necessary work habits, desire for employment stability, skills, etc., for future labor market success; these were to be achieved through subsidized work experiences that would be gradually more demanding and approximate regular unsubsidized employment. Three aspects distinguish the Supported Work program: (1) peer group support; (2) graduated stress; and (3) close supervision. The peer group aspect was implemented through the assignment of individuals to work crews consisting mainly of program participants, and this aspect was accomplished in a more or less consistent fashion across sites. Graduated stress was intended to expose the participant to increasingly higher performance standards that eventually corresponded to those typical of regular, unsubsidized jobs. There was a good deal of variation across sites in how this program aspect was actually implemented. Close supervision was designed to facilitate the transfer and then development of skills, proper work habits, and proper attitudes. Supervisors could be either program staff or nonprogram supervisors from the host employer. All five Supported Work sites that had youth enrollees participated in the evaluation. Applicants were randomly assigned to experimental and control groups. Those in the experimental group could participate in the program for a maximum period of 12 to 18 months, depending on the site. Both experimentals and controls in the sample were interviewed at baseline and then at 9-month intervals that continued for up to 36 months for some sample members .2 For purposes of the evaluation study, the enrollment period started in the second quarter of 1975 and lasted until the second quarter of 1977. The maximum length of the postprogram period covered by interviews was determined by when an individual enrolled. On average, youths in the program left it well in advance of the maximum period allotted for participation; only about 18 percent of the enrollees left to take other jobs or to enroll in an educational or training program (Maynard, 1980:Table III.2). The statistically significant positive effects of Supported Work on employment rates, hours of work, and earnings were largely confined to the period of participation in the program (see Table 7.3~. During the first 3 months following enrollment, program participation increased average monthly earnings of participants by $289 (389 percent), average hours worked by 112 hours per month (459 percent), and the probability 2A special resurvey was conducted over the period July 1980-January 1981. This resurvey provided data covering a period of 38-67 months following initial enrollment. The results of the study did not substantially alter the conclusions reached in the original study (Maynard et al., 19821.

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143 TABLE 7.3 Selected Supported Work Outcome Differences For Young Dropouts Months After Percentage Hours Worked Average Earnings Enrollment Employed Per Month Per Month 1-3 4-6 7-9 10-12 13-15 16-18 19-21 21-24 25-27 28-30 31-33 34-36 37-39 40-42 43-45 46+ 68* 43* 27* 19* 4.3 -3.4 -0.2 1.4 0.1 -5.3 -4.9 -5.2 2.4 -4~1 -1.4 2.1 112* 76* 52* 29* 5 -1.8 -2.7 2.3 -2.5 4.2 -6.2 -5.9 0.3 -8.7 -2.7 4.3 $289* 200* 146* 92* 8 18 13 29 _9 -26 ~33 -21 9 -31 -20 18 NOTE: Adjusted participant group mean minus control group mean. *Statistically significant at the .05 level or below in a two-tailed test. SOURCES: Data for months 1-15 from Maynard (1980~; data for months 16 and beyond from Maynard et al. (1982~. Of employment by 68 percentage points (336 percent) relative to controls. By 10 to 12 months following enrollment, these positive effects attenuated dramatically: program participation raised average monthly earnings by $92 (56 percent), average hours worked per month by 29 hours (58 percent), and the probability of employment by 19 per- centage points (52 percent). Beyond 13 months from the date of initial enrollment, program participation had no overall statistically significant effects on labor market outcomes as compared with members of the control group. The fact that experimentals had longer job tenure than controls because of program participation had no impact on postprogram employment rates, hours of work, or wage rates (Table 7.3~. Statistically significant program gains in hours of work during the period of actual participation tended to be larger among younger participants, females, whites, the more educated, those who left school because they wanted a job, those living with their parents, those

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144 raised by both parents, and those with greater job training in the year prior to enrollment. Supported Work had no long-term impact on educa- tion and training decisions or on drug use. Similarly, there were minimal long-term program effects on welfare dependence for youths, and criminal activity was not reduced by the program. Results of the benefit-cost analysis of the program indicate that from the societal viewpoint estimated costs exceeded estimated benefits by $1,465 per youth participant. While net costs were found to be quite sensitive~to the method of estimating the value of output and project costs, none of the alternatives reversed the benefit-cost result .3 Overall, the evaluation study appears to have been very careful in its attention to conditioning factors, random assignment, and the use of appropriate statistical techniques. We are therefore confident in the stated finding of no postprogram effect for the severely dis- advantaged youths who participated in Supported Work. Supported Work Youth Variation Starting in July 1979 four Supported Work sites were selected to participate in a special variation of the program, the Supported Work Youth Variation (Scharfman, 1981~. The special variation was directed toward 17- to 20-year-old high school dropouts, many of whom had a history of delinquency. Their experiences in the conventional Supported Work program were unfavorable compared with the outcomes for other targeted groups participating in the program. The variation sought to incorporate features not generally provided in the regular program, e.g., counseling, vocational education, skills assessment, and training; to extend the length of the program to 24 months; and to establish a tangible link to long-term labor market success and thereby improve in-program performance. Unfortunately, there was no comparison group for this follow-up study and therefore we did not find the reported results meaningful. 30n the basis of a special verification study conducted in three sites among ax-addicts and ax-offenders in the sample, self-reported arrests were found to be underreported by 46 percent, on average, by both experimentals and controls. The study notes that the measured underreporting among those subgroups may or may not be generalizable to the youth sample (Maynard, 1980~. Before estimating the value of reduced criminal activity, a factor of 1.7 is applied to the control- experimental arrest differential to correct for underreporting in the benefit-cost calculations. As noted in regard to the Job Corps evaluation (see Chapter 6), no underreporting factor is generally accepted in the criminal justice literature.

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145 Public Versus Private Sector Jobs Demonstration Project The Public Versus Private Sector Jobs Demonstration Project focused on differences in postprogram employment and earnings between partici- pants in fully subsidized public sector jobs and those in fully sub- sidized private sector jobs. The target population was 16- to 21-year-old, out-of-school youths eligible to participate in the Youth Employment and Training Program (YETP) portion of CETA. Five YETP sites that were operating from January 1979 to April 1980 were selected for the demonstration project. Eligible youths who had completed preliminary forms were matched in pairs within each site on the basis of age, race, sex, and their scores on a reading test and then randomly assigned to a fully subsidized job slot in either the public or private sector. The subsidized jobs paid the minimum wage and the 100 percent subsidy lasted 25 weeks. A total of 2,100 participants began the program. As is typical, there was participant heterogeneity across the five sites. Information provided for our review documents the degree of effort required at each site to develop job slots with public and private employers. This information was disaggregated by industry for private employers and by functional areas for public sector employers. In general, more effort was required to place youths in private sector subsidized jobs than in public sector subsidized employment. Forty-four percent (921) of the participants completed 25 weeks in the program. Completion rates were higher among females, blacks, and those in public sector jobs (49 percent) than in private sector jobs (38 percent). Immediate postprogram information was gathered at the end of the program period and at 3 and 8 months after program termination. At the 3-month follow-up only about 43 percent of the original sample could be located and interviewed (54 percent of completers and 34 percent of noncompleters). Among completers the full-time job rate was 50 percent for public sector participants compared with 64 percent for private sector participants. On the other hand the part-time job rate was 16 to 17 percent for both public sector and private sector participants. Public sector participants exhibited a higher rate of enrollment in educational or training classes (26 percent) than private sector participants (18 percent). After controlling for various individual characteristics, private sector participation continued to be associated with higher postprogram employment rates. Results from the 8-month follow-up are derived from the approxi- mately 35 percent of the original sample who were located and inter- viewed (42 percent of completers and 29 percent of noncompleters). Although multiple regressions are not available for this period' the results continue the earlier patterns among program completers: the full-time job rate was higher among private sector participants (61 percent) than among public sector participants (52 percent), and the part-time job rates were much the same for public sector (23 percent) and private sector (25 percent) participants. By the time of the 8-month follow-up, none of the private sector participants and only 4 percent of the public sector participants was in an educational or

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146 training program. At the time of the 8-month follow-up, there was virtually no difference in the employment rate for completers (80 percent) and noncompleters (78 percent), though the high attrition makes even this statement problematic. We cannot conclude on the basis of the evaluation that there was any difference in the effects of subsidized employment in the public versus the private sector. Although private sector participation was consistently associated with higher rates of subsequent employment, adjustments for nonprogram-related characteristics considerably narrowed the private sector advantage. The evaluation of this demonstration project offers no basis on which to decide whether the effort required to secure subsidized jobs in the private sector was worth the additional cost. Although the study appeared to be very promising in terms of both the nature of the project it described and its research design, sample attrition severely limits the reliability of the reported findings. We are not confident, therefore, about drawing conclusions about the effectiveness of the project or about the issue of the desirability of subsidizing public sector compared with private sector jobs. PROGRAMS SERVING IN-SCHOOL YOUTHS Table 7.4 presents the characteristics of the two programs serving in-school youths. Table 7.5 summarizes the research design and results of the evaluations of those programs. Summer Youth Employment Program The objective of SYEP was to provide economically disadvantaged youths (14- to 21-year-olds) with summer work experience in order to "assist these youths to develop their maximum occupational potential and to obtain employment not subsidized under CETA (P.L. 95-524, Sec. 481 ibid. Program emphasis varied across sites. Some sites offered vocational training, others provided job counseling, some a combination of both. Time and resource constraints were cited as the reasons for not recording the precise program elements to which each participant was exposed. Consequently, nothing can be learned about what sorts of interventions were particularly effective or ineffective in accomplish- ing program objectives. Sites also differed in terms of geographic characteristics, i.e., urban, suburban, and rural, and in terms of adherence of eligibility criteria. The evaluation we considered is of the SYEP conducted at eight sites chosen by the Department of Labor in the summer of 1979. It is based on data for approximately 2,000 youths who were ostensibly randomly chosen to participate or, if not accepted into the program on grounds other than eligibility, to be in the comparison group. Approxi- mately 250 youths were divided between the participant and comparison groups in each site. The treatment and comparison groups differed significantly in terms of some personal characteristics both across and

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150 SYEP's goal of encouraging youths to return to school. The data indicate that the program was particularly successful in raising the part-time employment rate of severely disadvantaged 16-year-old black males during the subsequent school year and particularly unsuccessful in bringing about part-time employment for severely disadvantaged 15-year-old females. Overall, the program seemed to have no significant effect on the likelihood of contact with the criminal justice system. Also, there is no evidence of program effects on attitudes toward such contact. The results did indicate mutually negative attitudes by participants and program personnel toward each other. It is not legitimate to treat the evaluation results as if they were produced by a random experimental/control group design. The manner in which participants and nonparticipants were chosen varied across sites. Also, the evaluation report does not explain why the youths who were eligible for SYEP, who constituted the comparison group, were not accepted for participation in SYEP. Although the study suggests program participants gained in employment during the program and in part-time employment after the program, the evaluation design does not allow reliable inferences to be drawn about the effectiveness of the SYEP. As with other public employment and training programs in the 1970s, the question of displacement received some attention with regard to SYEP. The number of jobs provided in a public employment program may not be the net number of jobs created as a result of the program because some of the jobs would have existed even if there had been no special jobs program and because the participants who have jobs may displace others who would have had the jobs had the program not existed. To the extent that displacement occurs, it is argued, the usual estimates of the social benefits of the program may be overestimates. The determination of whether displacement occurs for employment and training programs and, if so, to what degree and in what circumstances, is quite complex at both a practical and a theoretical level. It should be noted that while theory suggests that there may be displace- ment leading to overestimates of benefits as conventionally measured, there is also a theoretical possibility of replacement, if program participants are moved from a labor surplus market to a labor shortage market, in which case conventional methods would overestimate costs and, thereby, underestimate the net social benefits of the program [see, for example, Johnson (1979) and Kemper (1980) for discussion of this issue]. While estimating the degree of displacement is par- ticularly relevant in the context of estimating the net social benefits and costs of a given program, society may still ask what proportion of program output is over and above what would have existed in the absence of the program. We reviewed two attempts to estimate displacement in the Summer Youth Employment Program; one (Zimmerman, 1980) relied on data col- lected from personal interviews with program operators, and one (Crane and Ellwood, 1984) was based on aggregate data relating state-level employment to enrollment in SYEP and other variables. The study by

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151 Zimmerman is based to a considerable degree on supervisors' judgments about what projects would have been undertaken in the absence of the program in the eight sites. It concludes that "in 30 percent of the cases the output produced by SYEP project participants would have been produced at the same scale by alternative suppliers in the absence of the project" (Zimmerman, 1980:77~. The study by Crane and Ellwood takes an entirely different approach. The authors used unpublished data from the Current Population Survey for the 12 largest states for 1972-1978, for the months of April, July, and October, in order to measure employment by race and age group, and unpublished program data for SYEP placements by race and age for the same states over the same time period. The analysis relates employment- to-population rates for nonwhite 16- to 19-year-olds by state to the number of SYEP jobs per civilian nonwhite 16- to 19-year-olds for the state, using various other employment and school measures to control for what employment would have been in the absence of SYEP. In such a regression, the coefficient of the SYEP placement variable provides an estimate of how much each SYEP placement increased the employment rate for nonwhites aged 16-19 across the 12 states during that time period. Theoretically, if the SYEP job caused total displace- ment, the coefficient of the SYEP variable would be approximately zero; if there were no displacement the coefficient would be close to 1. The authors conclude (Crane and Ellwood, 1984:23~: "Regardless of the specification, estimated supplementation effects of SYEP seemed to fall between .5 an .75. Thus our best estimates is that for each SYEP job provided to nonwhite youths, one-third of a job is lost in the private sector for this group. n Despite their assertion, only one of the four equations yields an estimate that is significantly different from both 1.0 and zero. Because of reservations we have about the precision of the estimates and their statistical significance, we are not inclined to accept the estimates of displacement derived from this study. Overall, we do not believe that either the Zimmerman or Crane and Ellwood study provide reliable estimates of the magnitude of displacement in the Summer Youth Employment Program. Youth Incentive Entitlement Pilot Projects The Youth Incentive Entitlement Pilot Projects, which was mandated under YEDPA, was the largest YEDPA demonstration program. It cost approximately $240 million--$224 million for stipends and local program operations and $16 million for monitoring and research (Diaz et al., 1982:150--and lasted 2-1/2 years (early spring 1978-August 1980) with an additional phase-out period of a year (fall 1980-summer 1981~. Low-income youths aged 16-19 who had not yet graduated from high school constituted the eligible target population for the program. The key innovation of the program was that all eligible youths who lived in the target area were entitled to a job if they met enrollment conditions. Eligible youths were guaranteed minimum-wage jobs, part-time during the school year and full-time during the summer months.

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152 To continue their participation in the program, participants were required to be enrolled in school or in an approved alternative educational program and to be making satisfactory progress toward a high school diploma. The short-run goals of the program were to reduce school dropout rates, raise high school graduation rates, provide work experience, and provide income during the program participation phase. The longer-term goal was to improve life-cycle labor market outcomes as a result of staying in school and receiving work experience (Farkas et al., 1984~. In all there were 17 demonstration projects across the country, and more than 70,000 youths participated. As implemented, the program had four major characteristics: 1. the average 15- to 16-year-old was enrolled in the program for 15 months (13.4 in the full program plus 1.6 in the transition year); 2. 71 percent of the work experience jobs were in the public sector; 3. beyond provision of the job itself, very few services and little training was provided: two-thirds of the youths in the program received orientation, one-fourth were tested, and one-half received employment counseling; 4. the enrollment requirement was enforced but the school attendance and performance requirements were generally not enforced. YIEPP was not a skills training, job search, or behavior modification program. Thus, any effects observed are due to the work experience and school enrollment aspects of the program. In effect, the youths were provided with jobs and then left on their own to benefit or not. The entitlement program was designed to saturate an area with jobs. Consequently, the presence of the program could have an effect on the employment of eligible youths even if they did not participate in the program since the total number of jobs available in the local area would have increased. To account for this, an innovative approach was taken in designing the evaluation--use of matched sites. Four of the large-scale sites were selected as pilot sites for evaluation purposes. Four sites that did not have the entitlement program were selected as comparison sites. Cincinnati, a program site, was matched with Louisville; Baltimore with Cleveland; rural Mississippi counties with other rural Mississippi counties; and Denver with Phoenix. The evaluation technique was to estimate regressions on outcomes (e.g., employment); the independent variables were individual characteristics (to control for factors not accounted for by the match) and a dummy variable indicating whether the person was in a program site; the coefficient on the dummy variable is the program effect. Clearly, in using this approach the quality of the match becomes critical. The evaluation was also designed to include all eligible youths, both participants and nonparticipants, in the pilot-site study group. This evaluation strategy can counter the selectivity bias that plagues evaluations based on nonrandom selection of participants and controls because those choosing not to participate can differ in significant

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153 ways from those choosing to participate. This method also yields information on what the program participation rate might be given a permanent, ongoing program. Stratified random samples of eligible youths from the pilot sites and youths from the comparison sites who would have been eligible had YIEPP operated in their areas were selected as the interview sample for the evaluation. Youths who were aged 15-16 at the start of the program constituted the study group for the final report so the steady state effects of a permanent program for 16- to 19-year-olds could be determined. This group was also selected because it was believed that older youths had already made career decisions prior to being aware of the program and that this would contaminate pure program effects. In addition, the program participation rates of older youths were lower than those for the younger group, e.g., through summer 1980 cumulative participation rates were 66 percent among 15- to 16-year olds and 46 percent among 17- to 20-year olds. The sample for the final analysis was limited to blacks aged 15-16 at the time of program enrollment because they constituted the over- whelming majority of participants and because most Hispanic youths in the final evaluation sample were residents of Denver, a site that had had substantial implementation problems. In addition, white youths in the sample were considered too small in number and too heavily concen- trated in the Cincinnati/Louisville pair (where a school busing con- troversy led to substantial changes in white school attendance) to provide reliable separate estimates. The sample of black youths num- bered about 1,400 (excluding Denver/Phoenix); about 40 percent were from Baltimore/Cleveland and 30 percent each from Cincinnati/Louisville and rural Mississippi. Because other large YEDPA programs were operating in the comparison sites, the test was not one of the entitlement program compared with nothing. While the evaluation provides no way of judging how signifi- cant a factor this characteristic is, as in other evaluations it would probably lead to an underestimate of program effects since youths in the matched comparison sites were able to participate in other employment and training programs. As noted above, the program was run as a full--fledged entitlement between spring 1978 and August 1980. During the transition period between August 1980 and August 1981, the program operated at a reduced level with a limited number of openings. The true postprogram follow-up period, as defined for purposes of the evaluation, was the postoperation period during the fall semester of 1981. The follow-up period is troublesome in several regards. First, it is not a long period in which to observe postprogram effects, and it raises serious concerns about the extent to which effects that are observed may persist over time. Second, the final interview covered less than 2 months of the postprogram (i.e., postoperation) period for 62 percent of the sample. While most youths eligible for the program did not receive entitlement jobs during the transition period, the analysis design depends on defining the postoperation period as the postprogram period, since in theory the employment of eligible youths might be affected by the availability of an entitlement job. The

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154 evaluation design does not permit examination of changes in program effects over time because time since leaving the program cannot be a variable in this design. There are statistically significant in-program and postprogram effects on weekly earnings, largely attributable to enhanced employment rates, but also due in a modest way to small but statistically sig- nificant increases in hours worked and wage rates received (in the postprogram period). In-program earnings effects during the school year were estimated to range between 46 and 161 percent higher than weekly earnings in the absence of the program. Comparable earnings effects during the summer periods vary between 48 and 65 percent. During operation, the entitlement program significantly lowered unemployment rates and raised employment and labor force participation rates for young blacks as well as for all youths. The magnitude of the effect was sufficient to eliminate substantially the employment and unemployment differentials between black and white youths eligible for the program. Thus, employment-to-population rates for blacks increased from 21.1 to 41.3 percent, and those of ~ ~ 37.4 percent during the program (Farkas et al., 1982~. Unemployment rates decreased during the program, from 72.1 to 51.7 percent among black eligibles and from 61.1 to 54.8 percent among white eligibles. An important finding of the YIEPP evaluation is that approximately two-thirds of the youths eligible for the program did participate at some time. This finding means, in part, that youths are willing to work at the minimum wage but that in the absence of a program like YIEPP employers are unwilling to hire as many (at the minimum wage) who wish to work. It may also mean, in part, that in the absence of such a program in-school youths are not as likely to be in the labor force. YIEPP demonstrated that a system can be found to employ significant numbers of disadvantaged youths. YIEPP jobs were largely in the public sector; private sector involvement increased over time, but the participation rate of private business was generally low. The percentage of all youth job hours spent working for private work sponsors increased from 14 percent in September 1978 to 23 percent in June 1980. Although not empirically tested under entitlement, the effect of varying subsidy rates on private employers' willingness to participate was estimated in Baltimore and Detroit using employers' responses to hypothetical questions: "Would you be willing to act as a work sponsor at a 50 percent subsidy, a 75 percent subsidy, etc."? No comparison was made between expressed willingness to participate and actual whites increased from 31.2 to behavior (Ball et al., 1981~. Only 5 percent of businesses said they would participate if offered a 50 percent subsidy; 10 percent said yes with a 75 percent subsidy. Even at a 100 percent subsidy, only 18 percent of private employers surveyed said that they would participate. While the elasticity of the employer participation rate with respect to changes in the subsidy rate appears high, i.e., a doubling of the subsidy rate more than doubles the indicated

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155 participation rate, this was not a true experimental test of participation since there were no observations of actual behavior. The overall effects of YIEPP on secondary school enrollment and graduation were generally inconsequential. Virtually all of the estimated schooling effects are statistically insignificant. However, for black females in 1981, there was a sizable, statistically signifi- cant reduction in college enrollment; otherwise, the overall college enrollment effects are statistically insignificant, with some variation across sites. This particular program effect is troubling and deserves further scrutiny. In the postprogram follow-up semester, program earnings effects were estimated to be 39 percent above weekly earnings in the absence of the program. These figures took the sites as the unit of observation and are based on average earnings increases for all youths in the site regardless of participation. If one assumes that the observed effects persist for a year, there would be an estimated increase of $545 in annual earnings for eligibles. During the postprogram period in the fall of 1981, labor force participation rates of the full youth cohort were higher than those of the comparison group, but unemployment rates were not significantly different. Among young black eligibles) unemployment and labor force participation rates were not significantly different from those of the comparison group. Because of the scale of the entitlement effort and its potential as a model for future programs serving a substantial portion of the youth population, we devoted considerable effort to our review of this evaluation. We concluded that the YIEPP evaluation was a sound one and that meticulous attention was paid to the problems inherent in the quasi-experimental (matched sites) design used in the evaluation. The drifting apart of matched pairs of pilot and comparison sites over time, i.e., the Baltimore/Cleveland and Cincinnati/Louisville pairs, was recognized. The potential bias induced by attrition was sys- tematically investigated through a special attrition sample and found not to change the essential conclusions of the study. Although not enough information is available to determine the long-term effects of YIEPP, the finding that there are noteworthy positive in-program effects on the employment rates of black and white youths is convincing. Correction of program effects for individual characteristics using regression analysis does not change the results. Unfortunately, it is not possible to be as confident about other in-program effects or about effects generally for Hispanic or white youths because problems with the Denver/Phoenix and Cincinnati/Louisville pairs severely reduced the number of Hispanics and whites in the study. Related to the discussion of the magnitude of the employment effects of the entitlement program is the issue of displacement or net job creation. The report on in-program effects (Farkas et al., 1982)

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156 estimates that one new job was created for each 1.4 entitlement jobs funded in the public sector and for each 2.2 jobs funded in the private sector. The report also indicates that these assessments may be con- servative in the sense that they only measure the extent of displacement among program-eligible youths and do not include a measure of displace ment of ineligible people (e.g., nondisadvantaged or out-of-school youths or adults) who might otherwise have been hired. If these estimates are accurate, approximately 40 percent of the measured employment change resulted from shifting people who would have been employed in the absence of the program. Such a finding would have important implications for the net effects of the program in terms of job creation, as well as obvious cost implications. We discussed earlier the complexities involved in estimating dis- placement in connection with our review of the Summer Youth Employment Program above, and many of those concerns apply here as well. Because samples of youths were drawn both in the entitlement pilot sites and in the matched comparison sites, one could in theory capture one major element of the degree of displacement by using the comparison site figures to estimate what the employment of entitlement-age youths would have been had there been no entitlement project. This is essentially what Farkas et al. (1983) did by comparing the employment rates in the pilot sites with those in the comparison sites during the period of program operation for similar age-race groups and then dividing the differences in employment by the number of entitlement jobs in the pilot sites to measure net job creation displacement. Their estimate of the magnitude of net job creation is about 70 percent, implying displacement of around 30 percent. At the same time, control sites probably had substantial numbers of youths in YEDPA and other federal employment and training programs, and so the meaning of YIEPP displacement, even if accurately measured, is not clear. Another study of displacement in the entitlement program (Gould et al., 1982) surveyed a sample of private firms, both those that had actually provided jobs for entitlement participants and those that had not. Information was gathered on the levels of output and employment in these firms before, during, and after the period of the entitlement program. Using the data from the period before entitlement and for those firms not directly hiring participants, the authors developed econometric models that provided estimates of what employment in the firms would have been had there not been an entitlement project. (The analysis was complicated by the fact that even in the preprogram period many of the employers had other subsidized workers, presumably from CETA programs, in their firms.) The authors estimate that about 40 percent of the jobs created through entitlement resulted in displace- ment. While this was an imaginative and interesting effort, several features of it could lead one to question the precise magnitude of the estimate of displacement. First, the response rate to the initial survey was rather low (54 percent). Second, we have some doubts about the ability of the econometric model based on limited preprogram data to estimate what employment would have been in the absence of the program when operating with a small sample of highly individualized

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157 firms in particular localities. Third, and perhaps most important, this method provides no indication of what happened to those workers and resources that were displaced from these particular firms. Did they find alternative employment or remain unemployed? Since there is no market-wide measure of the degree of shortage, this important element in the determination of the final degree of displacement is missing. We believe that the technical problems with each of the studies estimating displacement in the entitlement program are sufficient to prevent confidence in accepting any given point estimate of its magnitude. There remain several other concerns about the entitlement evalua- tion's findings. The in-program and postprogram findings vary con- siderably by site. As noted above, we are convinced that the positive in-program effects are sound, but we are not so convinced with regard to postprogram effects. The postprogram results for weekly earnings show a negative effect for Baltimore (relative to Cleveland), while Cincinnati had an equal absolute value positive effect (relative to Louisville) with a smaller sample size than Baltimore, and the effect for rural Mississippi was positive. Hence, the finding of an overall positive postprogram effect is influenced considerably by the results for Mississippi. In other words, if the analysis is limited to urban sites, the average effect is zero or slightly negative. The researchers explain the negative Baltimore effect by noting an unexpectedly healthy Cleveland economy that might diminish the quality of the match over time. However, Baltimore was described as the best run of the programs. Because of across-site disparities in results and because it does not seem plausible to average rural and urban sites, the entitlement program results are most appropriately viewed as separate case studies. It is therefore difficult to see how to extract results on postprogram effects that are generalizable to the nation as a whole. The estimated postprogram effects of the entitlement program vary considerably across demographic subgroups as well as sites. The postprogram earnings effects for young black males are (nominally) twice those for young black females, $13.66 and $6.13 respectively, but the estimates for females are not significantly different from zero. The postprogram effect on weekly earnings for older (17- to 20-year-old) black youths was $4.14, and the effect for 15- to 16-year-old whites and Hispanics was one-sixth the size of the effect for comparable blacks, approximately $1.53 per week. Both effects were statistically significant. 4 4 This result is based on the weighted averages of estimated weekly earnings effects. The weekly earnings effect of $9.11 for the young black cohort (Denver/Phoenix included) declines to $7.45 for the full young cohort, i.e., when Hispanic and white youths are added (Farkas et al., 1984~. Using the sample weights, we computed the estimated earnings effect for white and Hispanic youths (combined) as 9.11 n1 + X n2 = $7 45'

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158 Besides weekly earnings effects, other outcomes also differed considerably by sex. The school enrollment/graduation outcomes for females did not appear to follow any pattern. Overall the program appears to have reduced college enrollment for females in two of the three sites. There is no readily apparent explanation for this result, since high school graduation rates are not significantly lower in those sites. Between the first interview and the last, the proportion of young black females with one or more children increased from 6 to 48 percent in one site and varied substantially across the sites. The estimated employment-related effects for young black women relative to men are probably influenced to some degree by the high rates of childbearing that characterized young black females in the sample. SUMMARY The evaluations of temporary jobs programs consistently found evidence that in-program earnings and employment were higher as a result of the program. The findings of the Summer Youth Employment Program evaluation tentatively suggested in-program gains in employ- ment, but we have only limited confidence in the evaluation. The Supported Work and entitlement evaluations provided the strongest evidence on this issue. In the case of Supported Work, a program serving severely dis- advantaged dropout youths, monthly in-program earnings of participants were $289 above those earned by the control group during the initial 3 months after enrollment in the program. Youths eligible for the entitlement program earned, on average, up to $9 more per week during the School year than the comparison group and up to $10 more per week during the summer. Earnings of the black youth cohort were as much as $12-$13 higher than the comparison group's during both the school year and the summer months (Farkas et al., 1982~. For participants in Supported Work, 97 percent were employed during the first 3 months after enrollment, compared with 29 percent of nonparticipants. Employment rates of young blacks in the entitlement program were up to 26 percentage points (235 percent) higher during the program than those of youths in the comparison sites. From this evidence we can generally conclude that temporary jobs programs effectively increased employment for participants and, hence, served an income transfer goal that has been an underlying rationale in many such programs. Without regard to the merits of this particular . where, n1 equals black youth cohort weight, n2 equals white and Hispanic youth cohort weight, and X equals weekly earnings effect for white and Hispanic youths: $9.11 (.781) + X (.219) = $7.45 X (.219) = $7.45 - $7.115 X (.219) = $0.335 X = $1.53

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159 program goal, the extent to which the estimated employment effects of a jobs program translate into an increase in the total number of jobs available, an increase in the number of employed persons, or a decrease in the number of unemployed persons may vary. While there is considerable disagreement about the proper way to estimate displacement in job creation programs, and a corresponding distrust of any given point estimate of its magnitude, most researchers and policy makers acknowledge the displacement problem. 5 From society's point of view the nature of displacement may be as important as its level. Thus, if a program displaces people who are more advantaged than participants, and who could easily find alternative employment, it may be considered less a problem than if the program displaces individuals who are equally disadvantaged (Masters, 1981~. The estimated in-program effects on labor market outcomes other than employment rates and earnings were variable among the programs and for different target groups within most of the programs. The entitle- ment program significantly lowered unemployment rates and raised labor force participation rates for all eligibles in the young cohort. Among Supported Work participants, gains in hours worked tended to be larger among those who were younger, females, white, and more educated. Neither the Public Versus Private Sector Jobs Demonstration Project nor VICI provided much information on in-program effects. Because the research design of the entitlement program required the ability to measure postprogram effects in an entire youth labor market (not only for participants), the postprogram period was defined as the time following the close of the program. Thus, the postprogram period for the entitlement program was the fall semester of 1981, and 62 percent of the black youth sample was interviewed within 2 months of the time the program terminated. The entitlement program increased postprogram earnings of eligible black youths by the equivalent of $545 per year (assuming measured postprogram gains persisted) and raised postprogram hours worked for employed black youths by 6 percent (from 32 to 34 hours per week). Employment rates were higher among blacks and labor force participation was higher for the full youth cohort. Neither labor force participation s For example, the YEDPA authorizing legislation and the 1978 CETA amendments required the Secretary of Labor to make periodic reports on various aspects of the entitlement program, including displacement. Reports were to include findings with respect to enrollment; costs; the degree to which out-of-school youths returned to school or others remained in school; the percentage of eligible youths participating; the kinds of jobs provided and a description of the employers--public and private; the degree to which on-the-job or apprenticeship training was offered; the estimated cost of extending the program to all areas; the effect of the program in reducing youth unemployment in the pilot areas; and the effect of program job opportunities on other oppor- tunities for youths in the area [P.L. 95-93 (YEDPA), Sec. 329; Report No. 95-1765 (CETA Amendments of 1978), Sec. 4201.

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160 rates nor unemployment rates of the young black cohort of entitlement eligibles were significantly different from those of the comparison group in the short postprogram period (Farkas et al., 1982~. There is limited evidence on the long-term effects of participation in temporary jobs programs. The Supported Work program clearly indicated no such effect for the severely disadvantaged dropouts it served. The evidence from the other studies is less clear, for a variety of methodological reasons. a maximum of 8 months of postprogram experience, some as little as 3 months. The VICI evaluation was designed to measure effects 8 months after program participation, but was generally unconvincing. The studies of temporary jobs programs that we examined were not very encouraging about the goal of raising school attendance rates, lowering drug abuse, or reducing negative encounters with the criminal justice system. With respect to school retention, the summer jobs program evaluation offered questionable evidence in support of increased school participation. The entitlement program had no effect on either school retention of youths already in school or school completion by dropouts who had returned. Most of the other studies analyzed