Leaving Welfare and Joining the Labor Force: Does Job Training Help? Evidence from an Innovative Intervention in New York City

Abstract

Starting in 1999, welfare recipients were required to participate in a job training and outplacement assistance program. Initially, recipients were enrolled in biweekly waves. I identify the effect of the program using an innovative natural experiment in which enrollees are compared to concomitantly eligible, non-enrolled recipients. Adjusting for control group contamination, I find that enrollees were over thirteen percentage points more likely to start a job. The majority of the newly employed remained off welfare for at least two years. Observed differences were not due to macroeconomic shocks or measurement error. The program passes a cost benefit test.

Keywords: welfare reform, job training, natural experiment