The Subsidized and Transitional Employment Demonstration (STED) Project

Employment, Earnings, and Unemployment Insurance During the COVID-19 Pandemic


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.

Agenda, Scope, and Goals

The STED project will include random assignment evaluations of up to seven subsidized employment programs targeting groups such as current, former, or potential Temporary Assistance for Needy Families (TANF) recipients, low-income noncustodial parents, and others. The evaluation will use a random assignment evaluation design to assess whether the programs improve participants’ short- and long-term employment and earnings and affect other key outcomes. The MDRC team will also provide programmatic technical assistance and funding to the participating programs to defray the costs of being in the study.

Design, Sites, and Data Sources

Individuals who are eligible for the programs will be assigned, at random, to a program group that is offered services from the subsidized employment program or a control group that is not served in the program but may seek out other services in the community. In some cases, study participants may be randomly assigned to one of two different versions of a subsidized employment model to assess which works best.

The evaluation will use a combination of surveys and administrative records to track the study groups for several years. It will also study the operation of the programs and assess their costs.