Testing a financial incentive to promote re-employment among displaced workers: The Canadian earnings supplement project (ESP)
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.
|Journal||Journal of Policy Analysis and Management|
Bloom, H.S. (Howard S.), Schwartz, S, Lui-Gurr, S. (Susanna), Lee, L. (Suk-Won), Peng, J. (Jason), & Bancroft, W. (Wendy). (2001). Testing a financial incentive to promote re-employment among displaced workers: The Canadian earnings supplement project (ESP). Journal of Policy Analysis and Management, 20(3), 505–523. doi:10.1002/pam.1005