The Youth Entitlement Demonstration: Subsidized Employment with a Schooling Requirement

Abstract

The during-program employment and school enrollment effects of the Youth Incentive Entitlement Pilot Projects (YIEPP) are reported. This program offered a minimum wage job part-time during the school year and full-time during the summer to 16-19 year olds from low income households. The effect of YIEPP is to provide a horizontal demand curve at the minimum wage permitting all target population youths who wish to work at this wage to do so. 4 study sites (Denver Cincinnati Baltimore and 8 rural counties in southern Mississippi) and 4 comparison sites (Phoenix Louisville Cleveland and a group of counties in western and eastern Mississippi) were studied through household interviews. Some results are: 1) YIEPP increase the site-wide average share of days spent both enrolled in school and employed form 9.4% of a youths time without the program to 28% with it 2) time spent in school and not employed decreased by 16.8% and 3) YIEPP decreased the share of days spent neither enrolled in school nor employed by 5.3%. The ratio of employment sector effects to YIEPP employment rates is 74.2% for the public 52.9% for private and 68.4% for total employment. Unique features of this program are its entitlement nature with sufficient funds available to provide jobs to all eligibles who applied and the fact that school enrollment is required for participation. Subsidized employment increased total employment for the target population but this occurred with a displacement rate of 31.6%; these estimates must be input into future benefit/cost calculations of program efficacy.