Over the past 80 years, a variety of subsidized employment strategies have been used for two main purposes: (1) to provide work-based income support for people who are not able to find regular, unsubsidized jobs; and (2) to improve the employability of disadvantaged groups. Programs with the first goal have typically emerged during periods of sustained high unemployment. Those with the second goal, including transitional jobs programs, may be relevant throughout the business cycle, since some groups have difficulty finding and holding jobs even when the labor market is healthy.

Since the 1970s, a few of the subsidized employment models have been rigorously evaluated, with mixed results. The Subsidized and Transitional Employment Demonstration (STED) will build on these earlier studies to test new, innovative, subsidized employment models. The project is sponsored by the Administration for Children and Families (ACF) in the U.S. Department of Health and Human Services. In 2010, ACF selected MDRC and its partners, Decision Information Resources (DIR), Branch Associates, and MEF Associates, to lead the project. MDRC is also conducting the Enhanced Transitional Jobs Demonstration (ETJD), sponsored by the U.S. Department of Labor, focusing on programs targeting disadvantaged noncustodial parents and/or former prisoners.