Publications

Report

Increasing Employment Stability and Earnings for Low-Wage Workers

Lessons from the Employment Retention and Advancement (ERA) Project

04/2012

Many recipients of Temporary Assistance for Needy Families (TANF) and other low-income individuals find or keep jobs for a while, but far fewer remain steadily employed and advance in the labor market. The Employment Retention and Advancement (ERA) project was launched in 1999 to identify and determine the effectiveness of different program strategies designed to promote employment stability and earnings growth among current or former welfare recipients and other low-income individuals. The study was conceived and funded by the Administration for Children and Families in the U.S. Department of Health and Human Services; supplemental support was provided by the U.S. Department of Labor, and the evaluation was conducted by MDRC.

Using random assignment research designs, ERA tested 16 different program models in eight states and estimated effects over a three- to four-year follow-up period. The focus of this synthesis is primarily on the 12 programs that targeted more employable groups, as opposed to “harder-to-employ” groups, such as individuals with known disabilities. Three of these 12 programs produced consistent increases in individuals’ employment retention and advancement, and the others did not. The project points to some strategies that succeeded in improving retention and earnings among low-income single parents and provides some lessons. Key ones include:

  • Supporting employment stability is likely to be a more effective strategy than encouraging job stability — that is, staying employed in the same job.
  • Earnings supplements, tied to job retention and that help to make low-wage work pay, ideally coupled with job coaching, can promote sustained employment and advancement.
  • By themselves, counseling and referrals to services to help people stay employed do not appear to increase employment retention and advancement.

Although the ERA project found that some strategies can improve low-income individuals’ employment and earnings, the improvements were not transformational. The majority of the programs tested did not improve participants’ retention and advancement, and most sample members remained poor or near-poor at the end of the study. Much is left to learn about how best to foster upward mobility for the millions of low-wage workers across the nation and lift them and their families out of poverty.