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

Author

Listed:
  • Howard S. Bloom

    (Manpower Demonstration Research Corporation, New York)

  • Saul Schwartz
  • Susanna Lui-Gurr

    (Social Research and Demonstration Corporation, Vancouver)

  • Suk-Won Lee

    (Hankuk University of Foreign Studies)

  • Jason Peng

    (Social Research and Demonstration Corporation, Vancouver)

  • Wendy Bancroft

    (Social Research and Demonstration Corporation, Vancouver)

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.

Suggested Citation

  • Howard S. Bloom & Saul Schwartz & Susanna Lui-Gurr & Suk-Won Lee & Jason Peng & Wendy Bancroft, 2001. "Testing a Financial Incentive to Promote Re-employment among Displaced Workers: The Canadian Earnings Supplement Project (ESP)," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(3), pages 505-523.
    • Handle: RePEc:wly:jpamgt:v:20:y:2001:i:3:p:505-523
    DOI: 10.1002/pam.1005
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    References listed on IDEAS

    as
    1. Noel Gaston & Daniel Trefler, 1997. "The Labour Market Consequences of the Canada-U.S. Free Trade Agreement," Canadian Journal of Economics, Canadian Economics Association, vol. 30(1), pages 18-41, February.
    2. Meyer, Bruce D, 1996. "What Have We Learned from the Illinois Reemployment Bonus Experiment?," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 26-51, January.
    3. Atkinson, Anthony B & Micklewright, John, 1991. "Unemployment Compensation and Labor Market Transitions: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1679-1727, December.
    4. Howard S. Bloom, 1990. "Back to Work: Testing Reemployment Services for Displaced Workers," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number btw, November.
    5. repec:mpr:mprres:856 is not listed on IDEAS
    6. Patricia Anderson & Walter Corson & Paul Decker, "undated". "The New Jersey Unemployment Insurance Reemployment Demonstration Project: Follow-Up Report," Mathematica Policy Research Reports eba060d41b8145b5a230fa76b, Mathematica Policy Research.
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    Cited by:

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    2. Sinyagin, Yury (Синягин, Юрий) & Sheburakov, Ilya (Шебураков, Илья), 2018. "Rationale and development of a model for increasing the efficiency and effectiveness of public civil servants on the basis of a person-centered approach to management [Обоснование И Разработка Моде," Working Papers 061819, Russian Presidential Academy of National Economy and Public Administration.

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