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Sustained Earnings Gains

B U I L D I N G K Nrc

O W L E D G E

for Residents in a Public

T O I M P R O V E S O C I A L P O L I C Y

Housing Jobs Program

SEVEN-YEAR FINDINGS FROM THE JOBS-PLUS DEMONSTRATION

F

By James A. Riccio

E

t he Jobs-Plus demonstration tested three years after the demonstration ended.

I

whether a program that combined

And during both the program and post-employment and training services, program periods, the effects were found for new rent rules to “make work pay,” and many different kinds of residents. These R

neighbor-to-neighbor outreach centering on robust, long-term findings suggest that Jobs-work could make a difference in the Plus, when properly implemented, offers a economic prospects of public housing feasible and effective way for the nation’s B

residents. Jobs-Plus operated in six housing public housing system to move beyond its developments across the country from core function of providing housing subsidies 1998 to 2003, with the program model in to take on another important role — serving place at most sites by 2000. A 2005 MDRC

as a platform for work.

report showed that the program produced substantial earnings gains for residents in WHY JOBS-PLUS?

Y

three of the six sites during the first four The Jobs-Plus Community Revitalization 1

years after the program rolled out.

Initiative for Public Housing Families was developed in the late 1990s in response to C

A new analysis extends the follow-up to the growing concentration of joblessness, seven years — three years after the program underemployment, welfare receipt, and I

ended — for the three sites with positive poverty in some of the nation’s most effects. Those sites had fully implemented economically deprived communities: public and sustained all three program

housing developments and their

L

2

components; thus, they offer the best test of surrounding neighborhoods. In many the Jobs-Plus concept. The goal of the cities, public housing residents were extended analysis was to determine whether some of the hardest-to-employ populations, O

their positive effects would continue after and rates of employment below 50 percent the program ended. The longer-term results were common. In addition, longstanding are striking: in each of those sites, the public housing rent policies, which calculate P

effects did endure. When the results are rent at 30 percent of income, essentially combined, they show that the Jobs-Plus functioned as a hefty tax on earnings, model in those locations caused a 16

discouraging work and contributing to low percent increase in average annual earnings rates of employment. Stated simply, as a over the full seven years (an average gain of family’s income rose, so did its rent.

$1,300 per year) for nondisabled, working-age public housing residents. Moreover, the The 1998 Quality Housing and Work earnings gains, which were large while Jobs-Responsibility Act (QHWRA) attempted to J A N U A R Y

Plus operated, continued during each of the encourage more work among public 2 0 1 0

M D R C P O L I C Y B R I E F

J O B S - P L U S :

A P U B L I C - P R I V A T E P A R T N E R S H I P

While housing authorities were central to the design and management of Jobs-Plus, the program was not about what strategies can boost the exclusively a housing-authority effort. The economic self-sufficiency of public housing demonstration drew on the resources and know-how residents. To date, the program remains the of workforce, welfare, and other public and private only rigorous multisite evaluation focused on institutions with a stake in alleviating poverty and this question. Findings released in 2005

unemployment in public housing.

showed that, in sites where the program was fully implemented, Jobs-Plus led to large, Jobs-Plus was designed by the U.S. Department of sustained, and steadily growing gains in Housing and Urban Development (HUD), the earnings. This policy brief recaps key findings from the 2005 study and continues the story Rockefeller Foundation, and MDRC, a nonpartisan, by examining new, longer-term findings.

nonprofit research firm that subsequently conducted the evaluation. The Jobs-Plus funding consortium, which A CLOSER LOOK AT JOBS-PLUS

was led by HUD and the Rockefeller Foundation, also The Jobs-Plus demonstration involved a included the U.S. Department of Health and Human multidimensional approach to helping public Services, the U.S. Department of Labor, The Joyce housing residents work and earn more Foundation, The Annie E. Casey Foundation, The money. With a message that employment James Irvine Foundation, Surdna Foundation, Inc., should be a common aspect of life in public Northwest Area Foundation, The Stuart Foundation, housing, Jobs-Plus programs were aimed at BP, and Washington Mutual Foundation.

all working-age, nondisabled residents of the housing developments where the programs operated. Jobs-Plus programs combined three core elements:

housing residents by introducing some modifications in rent rules. QHWRA’s most

Employment-related services at convenient on-notable change mandates that housing site job centers. Activities included job search authorities give rent breaks to certain help and referrals to education programs, categories of residents who have seen their vocational training, and support services, like incomes rise due to employment (for example, child care and transportation assistance.

residents who have left welfare within the past six months, who had not been working for at

Financial incentives to work — changes in least a year, or who are participating in a public housing rent rules that helped make training program). Rent calculations for these work “pay” by reducing the extent to which residents disregard all of their increased increases in earnings were offset by increased earnings for one year and then half of their rents. Most common and easiest for housing increased earnings for a second year after that.

authorities to administer were flat rents, Jobs-Plus included rent incentives that were which allow residents to increase their earned available to all residents, and they were income without worrying that their rent reinforced with employment and training would go up. At the same time, the services and neighbor-to-neighbor efforts to traditional 30-percent-of-income rule was promote work among residents.

retained as a safety net, so that those who lost their jobs or saw their earnings decline 2

As a research demonstration, Jobs-Plus was would not be saddled with a higher rent they designed to help fill a gap in knowledge could no longer afford.

J A N U A R Y 2 0 1 0

Community support for work — neighbor-to-sites, the new rent-based work incentives were neighbor exchanges of information about job never properly implemented. Not surprisingly, opportunities or employment services. This the program produced no earnings gains in

“social capital” part of Jobs-Plus aimed to take these sites. A third site, the Seattle program, advantage of the program operating in a was well run and did initially produce defined place, by tapping into residents’ social earnings gains. However, implementation was networks to promote circulation of information disrupted by a federal HOPE VI project under about employment and to encourage support which the housing development was torn for work within the housing development.

down and rebuilt and residents were relocated, and the impacts faded.

Each individual program in the demonstration was managed by a local partnership that In light of this implementation story, MDRC

involved the public housing authority, the looked at the combined effects of those sites local welfare and Workforce Investment Act where the full Jobs-Plus model was (WIA) agencies, residents, and, in some implemented and sustained — Dayton, Los cases, other service or education agencies in Angeles, and St. Paul. This group provided the community. MDRC provided extensive the best test of what the Jobs-Plus model, technical assistance to study sites in six cities when fully implemented, could accomplish.

— Baltimore, Chattanooga, Dayton, Los Angeles, St. Paul, and Seattle — that were Earnings impacts at these three sites during chosen through a national competition to the first four years after the program rolled out participate in the demonstration.

were large, averaging $1,141 per year (an estimate that is based on all targeted IMPACTS ON WORK AND EARNINGS

residents, whether or not they worked or even WHILE JOBS-PLUS WAS OPERATING

knew about Jobs-Plus). This represents an The 2005 report compared outcomes for increase of 14 percent over the amounts residents of the Jobs-Plus housing earned by the comparison group. Moreover, developments with outcomes for similar the effects grew steadily over the study period, residents living in similar (randomly selected) rising to 20 percent in the fourth and final year 3

housing developments in the same cities. The of the program. The earnings impacts at the study followed both groups over time, covering three sites held for different types of residents, the four years from the point when Jobs-Plus including for those who were and those who was up and running (2000) through the end of were not receiving welfare at the start of the the program (2003). It found that, once Jobs-program and for those with different levels of Plus was fully in place, it increased residents’

prior employment. And, when looked at average earnings by 6 percent for the entire separately, each of the three sites (as well as study sample across all six sites. However, Seattle, until the redevelopment process got MDRC’s study found that not all of the sites under way there) produced earnings gains, fully implemented the core components of the despite serving populations that differed Jobs-Plus model. In two sites (Chattanooga widely in terms of their ethnicity and the labor 4

and Baltimore), other priorities made it difficult and housing markets they faced. The three for the housing authorities to continue giving sites also registered impacts on quarterly Jobs-Plus the attention it required, and employment rates, but the gains were smaller 3

implementation faltered; indeed, in those two and less consistent than the earnings impacts.

M D R C P O L I C Y B R I E F

Although not definitive, some evidence in the encouraging, but an important question evaluation suggests that the Jobs-Plus rent remained: Would they be sustained after the incentives were an important reason for the program was no longer operating? Or would overall earnings impacts. (For example, in they fade away? The longer-term analysis those sites where the rent incentives were not found that post-program effects were large, fully in place, but other components were sustained, and even somewhat larger than available — Baltimore and Chattanooga —

they were for the period of full operations.

5

the program produced no earnings gains.) At Overall, for the three sites, the earnings the same time, other evidence suggests that impacts averaged $1,517 per year during the offering residents the full complement of post-program period (a 19 percent gain Jobs-Plus activities and services also mattered.

relative to the comparison group mean) and $1,300 per year (a 16 percent gain) for the entire LONGER-TERM FINDINGS

seven-year follow-up period (see Figure 1).

ON WORK AND EARNINGS

The impacts observed in the three full-The new analysis also confirms several implementation sites during the four-year important patterns found in the initial 2005

period of program operations were impact analysis. First, the fact that substantial FIGURE 1 Where fully implemented, Jobs-Plus increased residents’ average quarterly earnings over a 7-year period.

(Results for Dayton, Los Angeles, and St. Paul combined, 2000 -2006) 3,000

Jobs-Plus Group

Rollout

Comparison Group

period

2,500

dollars)

2003

2,000

Jobs-Plus’s impacts on earnings:

+ $1,300 per year (+ 16%)

(in

+ $9,099 cumulative gain over 7 years 1,500

Earnings

1,000

uarterlyQ

eanM

500

Period of full program operations Post-program period

Period before Jobs-Plus began

(2000 - 2003)

(2004 - 2006)

0

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

Q

Q

Q

Q

Q

Q

Q

Q

Q

Q

Q

Q

Q

Q

Q

Time Period

SOURCE: MDRC calculations using data from state Unemployment Insurance (UI) wage records. NOTES: Sample includes all working-age, nondisabled residents who lived in the Jobs-Plus or comparison developments in Dayton, Los Angeles, or St. Paul in October 1998. Trend lines show residents' earnings pre- and post-October 1998, whether or not they 4

were living in the developments before or after that time. The annual and cumulative earnings impacts for the period 2000-2006 are statistically significant.

J A N U A R Y 2 0 1 0

TABLE 1 Jobs-Plus had positive earnings impacts for residents in different housing and labor markets.

GAIN OVER COMPARISON GROUP

SITE

PER YEAR

CUMULATIVE

PERCENTAGE

(2000-2006)

(2000-2006)

CHANGE

POOLED RESULTS

$1,300

$9,099

16%

DAYTON

$984

$6,888

14%

LOS ANGELES

$1,176

$8,233

15%

ST. PAUL

$1,883

$13,181

19%

NOTE: The estimates in this table refer to differences in average earnings between residents of the Jobs-Plus developments and residents of the comparison developments. All differences are statistically significant.

earnings gains were achieved and sustained comparison group rate (48 percent), a in cities as different as Dayton, Los Angeles, difference that is not statistically significant.

and St. Paul indicates that the Jobs-Plus However, employment impacts were large and model can travel well and work effectively in statistically significant for some subgroups, different housing and labor markets (see notably Hispanic men in the Los Angeles site Table 1). Second, the effects of Jobs-Plus were and Southeast Asian women in the St. Paul widespread across different types of public site. Both of these subgroups averaged housing residents. For example, Latino men quarterly employment rates approximately and Southeast Asians (many of whom were 11 percentage points above the rates of their immigrants) and African-American single counterparts in the comparison sites. Taken mothers all earned more with Jobs-Plus than together, these employment and earnings they would have earned without the program.

patterns suggest that residents were Third, the effects occurred in both good influenced by Jobs-Plus in these three sites in times and bad, at the tail end of a booming different ways, with some being helped to economy, in the midst of the 2001-2003

enter or sustain employment, and others likely 6

national recession, and during the recovery experiencing increases in hours and/or wages.

that followed that recession.

COSTS OF OPERATING JOBS-PLUS

As was true in the 2005 analysis, impacts on The evaluation of Jobs-Plus did not include a quarterly employment rates reported in the detailed cost analysis, but it is possible to post-program analysis were smaller than the give a very rough estimate of the scale of earnings impacts. For the entire 2000-2006

investment needed to operate this type of study period, 52 percent of residents of the program: The annual cost of operating the three Jobs-Plus housing developments where on-site features of a Jobs-Plus program the program was fully implemented were (services, rent incentives, and community employed during an average quarter. This support for work) is in the range of $1,800

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is 4 percentage points higher than the per person. In fact, the incremental cost to

M D R C P O L I C Y B R I E F

T H E J O B S - P L U S

H O W - T O G U I D E

Helping Public Housing Residents Find and Keep Jobs: A Guide for MOVING FORWARD

Practitioners Based on the Jobs-Plus Jobs-Plus is a rare evidence-based strategy for Demonstration

improving the economic security of public housing residents. On the basis of that This easy-to-read report offers guidance on: evidence, New York City’s Center for

• The first steps in the process of planning a Jobs-Plus Economic Opportunity made the first attempt program: needs assessments; planning for in the nation to replicate the program, collaborative governance, management, and staffing; launching Jobs-Plus in a large public housing development in the fall of 2009. On the federal estimating costs and finding funding; making level, a limited national rollout of the program provisions for monitoring operations and outcomes; that would target developments where there is and identifying space for program activities.

a substantial need for employment assistance for residents of public housing would also

• How to construct and use the three building blocks of seem worthy of consideration.

Jobs-Plus: employment-related services, financial incentives to work, and community support for work.

While Jobs-Plus is a place-based approach, rooted in individual housing developments,

• Other crucial implementation steps: marketing the Section 8 Housing Choice Vouchers represent program and educating residents about financial a much larger part of the nation’s housing incentives; sustaining the managing partnership; safety net, especially for working-age, shaping Jobs-Plus to fit multiethnic settings; and nondisabled residents, many of whom also taking into account the special opportunities and face substantial impediments to employment.

challenges of operating a place-based program.

Given the importance of helping voucher recipients have better success in the labor market, there may be value in testing carefully Available for free in printed form or on the MDRC

whether Jobs-Plus concepts could be Web site: www.mdrc.org.

effectively adapted to improve work outcomes for the many people holding vouchers.

________________________

housing authorities of adding a Jobs-Plus The long-term effects of Jobs-Plus suggest program may be lower if they are already that there is untapped potential for the offering residents some level of rent housing system — working with institutional incentives or employment services that are partners — to increase the earnings of the similar to the Jobs-Plus intervention. Costs per people who depend on it for housing participant may also be lower if levels of assistance. The current economic crisis may residential mobility are high, such that fixed make it more difficult to exploit that expenditures are spread over more potential, but the positive outcomes that individuals. Besides mobility, other key factors Jobs-Plus has thus far generated make it an that are likely to influence the costs of initiative worth considering even during the operating Jobs-Plus include economies of hard times — times when it is critical to scale and the nature and duration of rent invest public dollars in programs that have a 6

incentives offered.

good chance of making a difference.

J A N U A R Y 2 0 1 0

A C K N O W L E D G M E N T S

N O T E S

Thanks to Susan Blank, John Wallace, Johanna Walter, 1 Howard Bloom, James Riccio, and Nandita Verma, John Hutchins, Gordon Berlin, and Howard Bloom for Promoting Work in Public Housing: The Effectiveness of their assistance in preparing this brief.

Jobs-Plus (New York: MDRC, 2005).

Funding for this brief was provided by The Annie E.

2 Sandra J. Newman and Anne B. Schnare, “‘And a Casey Foundation.

Suitable Living Environment’: The Failure of Housing Programs to Deliver on Neighborhood Quality,”

Dissemination of MDRC publications is supported by Housing Policy Debate 8, 4: 703-741, 1997; James A.

the following funders that help finance MDRC’s public Riccio, Mobilizing Public Housing Communities for policy outreach and expanding efforts to communicate Work: Origins and Early Accomplishments of the Jobs-the results and implications of our work to Plus Demonstration (New York: MDRC, 1999).

policymakers, practitioners, and others: The Ambrose Monell Foundation, The Annie E. Casey Foundation, 3 To determine whether Jobs-Plus improved residents’

Carnegie Corporation of New York, The Kresge labor market outcomes, the evaluation set up a careful Foundation, Sandler Foundation, and The Starr research design that included a reliable comparison Foundation.

group. Within each city participating in the demonstration, several housing developments that In addition, earnings from the MDRC Endowment were similar in size and in the demographic help sustain our dissemination efforts. Contributors to composition of their residents were identified. MDRC

the MDRC Endowment include Alcoa Foundation, The then randomly allocated one of these developments to Ambrose Monell Foundation, Anheuser-Busch a program group that got Jobs-Plus, while the other Foundation, Bristol-Myers Squibb Foundation, Charles one or two were allocated to the comparison group.

Stewart Mott Foundation, Ford Foundation, The This cluster random assignment strategy, combined George Gund Foundation, The Grable Foundation, with an interrupted time-series analysis using long-The Lizabeth and Frank Newman Charitable term trend data, allowed researchers to determine Foundation, The New York Times Company whether living in a Jobs-Plus housing development Foundation, Jan Nicholson, Paul H. O’Neill Charitable improved employment and earnings outcomes Foundation, John S. Reed, Sandler Foundation, and relative to what they would have been without Jobs-The Stupski Family Fund, as well as other individual Plus. To be included in the study sample, residents contributors.

had to be living in the Jobs-Plus or comparison developments in October 1998. Thus, the sample The findings and conclusions in this report do not included recent arrivals as well as longer-term necessarily represent the official positions or policies residents. The employment experiences of all of the funders.

residents during this time period were tracked using Unemployment Insurance wage records, starting from Copyright © 2010 by MDRC.® All rights reserved.

several years before Jobs-Plus began to several years afterward — and regardless of whether they were living in the public housing developments before or after October 1998. In all, the study sample consisted of 4,774 residents of Jobs-Plus and comparison developments. For more information about the study design, see note 1.

4 Residents in the Dayton sample were mostly African-American single mothers; those in Los Angeles were substantially Hispanic families of Mexican and Central American descent; those in St. Paul were heavily Southeast Asian (predominantly Hmong); and those in Seattle included many residents from various East African and Southeast Asian countries.

5 Longer-term data were not available for the other three sites.

6 During both the program and post-program periods, welfare caseloads dropped for the full study 7

sample, but the change reflected national trends and was not due to Jobs-Plus.

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SUSTAINED EARNINGS GAINS FOR RESIDENTS IN A PUBLIC HOUSING JOBS PROGRAM: SEVEN-YEAR FINDINGS FROM THE JOBS-PLUS DEMONSTRATION

he Jobs-Plus demonstration tested whether a program that combined T employment and training services, new rent rules to “make work pay,” and neighbor-to-neighbor outreach centering on work could make a difference in the economic prospects of public housing residents. A 2005 report showed that the program produced substantial earnings gains for residents in three of six sites in each of the first four years after the program rolled out. This new analysis, which extends the follow-up to seven years, shows that these earnings effects endured at least three years after the program ended — suggesting that Jobs-Plus, when properly implemented, offers a feasible and effective way for the nation’s public housing system to take on another important role: serving as a platform for work.

8