National Supported Work Demonstration, Youth

The National Supported Work Demonstration was a randomized evaluation, begun in 1975, of a subsidized work program that targeted four groups of unemployed individuals: adult women on AFDC, ex-addicts, ex-offenders, and youth who had dropped out of school. The program operated at 15 sites nationwide by local nonprofits. Participants were provided with temporary employment (for no longer than 18 months) with gradually increasing expectations for productivity and attendance and/or gradually decreased supervision. Because the precise parameters of interventions included in the evaluation varied from site to site, Hendren and Sprung-Keyser (2020) provide separate MVPFs for each of the four groups targeted by the program.

For the youth group, Hendren and Sprung-Keyser (2020) use estimates from Hollister et al. (1984), who examine impacts up to 27 months following random assignment, and supplement these estimates with the longer-run results of Couch (1992), who estimates earnings impacts for NSW participants for eight years following the program using Social Security earnings record data.

MVPF SUMMARY

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Hendren and Sprung-Keyser (2020) use figures from Hollister et al. (1984) for costs and fiscal externalities, as well as their results for reduced welfare receipt of $474 for youth. Couch (1992), meanwhile, finds present-discounted (at a 3% rate) earnings impacts of $3,207 for youth. At a Congressional Budget Office-derived tax rate of 0.7%, this corresponds to changes in tax payments of $22 (including taxes on direct payments to participants). Under the baseline assumption that individuals value the program according to its impact on after-tax earnings, these calculations yield a Net Cost estimate of $3,555, a post-tax WTP estimate of $2,139, and a resulting MVPF of 0.60 (95% CI: [-\infty, \infty]). If instead one measures the willingness to pay as equal to the the program-cost, the MVPF for youth is 1.28 (95% CI: [0.21, \infty]).