Testing a Financial Incentive to Promote Re-employment among Displaced Workers: The Canadian Earnings Supplement Project (ESP)

Howard S. Bloom, Saul Schwartz, Susanna Lui-Gurr, Suk-Won Lee, Jason Peng and Wendy Bancroft
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Howard S. Bloom: Manpower Demonstration Research Corporation, New York, Postal: Manpower Demonstration Research Corporation, New York
Susanna Lui-Gurr: Social Research and Demonstration Corporation, Vancouver, Postal: Social Research and Demonstration Corporation, Vancouver
Suk-Won Lee: Hankuk University of Foreign Studies, Postal: Hankuk University of Foreign Studies
Jason Peng: Social Research and Demonstration Corporation, Vancouver, Postal: Social Research and Demonstration Corporation, Vancouver
Wendy Bancroft: Social Research and Demonstration Corporation, Vancouver, Postal: Social Research and Demonstration Corporation, Vancouver

Journal of Policy Analysis and Management, 2001, vol. 20, issue 3, 505-523

Abstract: This article presents findings from a randomized experiment conducted in four Canadian provinces to measure the effects of a generous financial incentive that was designed to promote rapid re-employment among workers who were displaced from their jobs by changing economic conditions. The incentive tested was an earnings supplement which, for as long as 2 years and as much as $250 weekly, would replace 75 percent of the earnings loss incurred by displaced workers who took a new lower-paying full-time job within six months of receiving a supplement offer. Findings from the experiment indicate that although persons offered the supplement understood its terms and conditions, only 2 out of 10 actually received supplement payments. Furthermore, the supplement offer had little effect on job-search behavior, employment prospects, or receipt of unemployment insurance. Nevertheless, persons who received supplement payments benefited from them substantially. On average, they received payments for 64 weeks, totaling $8,705. © 2001 by the Association for Public Policy Analysis and Management.

Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jpamgt:v:20:y:2001:i:3:p:505-523

DOI: 10.1002/pam.1005

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