Association for Public Policy Analysis & Management

In 2018, 11.7 percent of young people between the ages of 16 and 24 were neither working nor in school. Often referred to as “disconnected youth,” these young people tend to struggle more in the labor market than their peers. Although national rates of youth disconnection have steadily declined since peaking in 2010 during the Great Recession, it is becoming increasingly difficult to build a career with opportunities for growth without postsecondary credentials, particularly for those with limited work experience and those who haven’t completed high school. Policymakers have expressed interest in finding ways to link disconnected youth to pathways that will help them improve their long-term economic prospects; however, it has been a challenge to identify effective strategies.

The Subsidized and Transitional Employment Demonstration (STED) project is one attempt to learn what might work. Launched in 2010, the project identified and evaluated eight subsidized employment programs designed to improve employment prospects for low-income young people and adults. The eight programs were evaluated across seven randomized controlled trials, in which individuals were randomly assigned either to a program group that was offered program services or to a control group that was not. Although only two of the STED programs were specifically designed for disconnected youth, around 4,200 people between the ages of 18 and 24 enrolled in the studies, which is nearly half of the STED study participants.

Unlike most programs targeting disconnected youth, which tend to focus on education and training, subsidized employment programs primarily focus on work experience, and they generally expect participants’ next steps after the program to be unsubsidized employment. Does this approach change the educational and career trajectories of program participants?

This analysis pools up to five years of follow-up administrative employment and earnings data and up to 2.5 years of follow-up survey data to examine the work, education, and training patterns of the young people who participated in the eight STED programs. The analysis focuses on three questions:

1. What do young people pursue after their subsidized jobs end, and does it differ from what they would have pursued without subsidized jobs?
2. Did STED programs promote career advancement for disconnected youth?
3. How did young people who advanced differ from those who did not advance?

To answer these questions, we will examine the combinations of employment, education, and training activities young people pursued at two points in time after their subsidized jobs ended to assess whether the program put them on different paths than they would have taken without the program. Then, we will create measures of career advancement using administrative employment and earnings data – based on an approach used in the Employment, Retention, and Advancement project – to assess whether subsidized jobs programs helped young people advance in the labor market. Finally, in a descriptive analysis that combines data for both research groups, we will compare the characteristics and experiences of youth that advanced to those that did not.