Appendix C: Examples of Employment-Related Measures Analyzed in This Report

For this report on the Employment Retention and Advancement (ERA) program in Texas, employment-related measures are created from unemployment insurance (UI) wage records and the ERA 12-Month Survey. This appendix describes some of the key measures in more detail, grouping them by the research questions that they help to answer. Measures from both UI wage records and the 12-month survey are discussed.1

Did ERA Improve Job Placement?

According to the baseline survey, nearly all the sample members in Texas were without work at the time of random assignment. Thus, an important measure of the effectiveness of the program is how well ERA placed sample members in jobs.

• Ever employed in a UI-covered job in Years 1-2. This is a key measure of job placement. A preemployment program like ERA in Texas is expected to produce increases in this measure. It captures both the movement from no employment to UI-covered employment and the movement from jobs not covered by the UI system to jobs that are covered. In general, jobs that are covered by the UI system are more likely to have benefits and to count toward eligibility for the Earned Income Tax Credit (EITC).

• Ever employed as of the 12-month survey interview. Based on responses to the ERA 12-Month Survey, this is a more comprehensive measure of job placement that captures the movement from no employment to either UI-covered jobs or jobs not covered by the UI-system. The shortcomings of this measure are that it is based on recall of past events, rather than on administrative records, and that it is based on the smaller survey sample.2

Did ERA Improve Employment Retention?

As discussed in the introduction to the report, although a lot is known about how to place welfare recipients in jobs, very little is known about how to help them retain those jobs. Facing a variety of barriers to work –– including health issues, unreliable or costly child care and transportation arrangements, and difficult working conditions –– welfare recipients often have unstable employment experiences. One of the key goals of ERA in Texas was to stabilize employment.

• Average quarterly employment in UI-covered jobs. This measure can be defined as the employment rate in the average quarter, and though it is related to employment retention, it might also reflect job placement and the timing of initial employment. Average quarterly employment was computed by adding up the number of quarters employed and dividing by the total number of quarters potentially employed. For example, for the two-year measure, a sample member who was employed in two quarters received a value of 25 percent [(2/8) * 100].

• Employed four consecutive quarters in UI-covered jobs. An impact on this measure would likely signal an effect on employment retention. Because UI wage records are reported quarterly, it is not possible to know whether sample members who worked in four consecutive quarters were really employed the whole time.

• Number of months employed since random assignment. This item, from the 12-month survey, is a measure of employment stability. While it is similar to the two items above, it provides a more finely grained measure of employment stability, since survey data can be collected at monthly intervals. Similarly, the survey item “employed six consecutive months” is a measure of employment stability that is comparable to “employed four consecutive quarters,” but it provides a better estimate of stability because it is based on months rather than quarters.

Did ERA Lead to Advancement in the Labor Market?

The goals of ERA go beyond employment retention. Retention at a low-wage or low-quality job may represent some improvement, but the goals of ERA included advancement to jobs that offered better pay and benefits. Improvements in job quality can be viewed as a type of advancement. Some of these measures are mostly noneconomic (such as whether one works the night shift) but are still important. Others (such as health benefits) can have large economic consequences that are not incorporated in measures of earnings.

• Earned over $10,000. This measure could be related to both retention and advancement, although –– like some of the other measures –– it could also reflect the timing of initial employment. The two-year measure of earnings uses a threshold of $20,000.

• Earnings distribution in a quarter (earned $2,500 or more; earned between $500 and $2,499; earned between $1 and 499). This measure shows whether increases in UI-covered employment are driven by increases in employment at certain levels of earnings. It is likely related to advancement and job quality, although it is subject to the limitations of UI earnings data that are described above.

• Employed at a good job. A “good job” is a job in which a respondent works 35 or more hours per week and either (1) pays $7.00 or more per hour and offers health insurance or (2) pays $8.50 or more per hour.3 By coupling wages and benefits, this measure allows for a more nuanced assessment of job quality.

• Job schedule measures. For workers in general, and for working mothers with young children in particular, the job schedule can raise critical issues. It can be difficult, for example, to arrange for child care during the evening, and overnight shifts can be even more difficult to accommodate. On the other hand, such atypical schedules may command higher wage rates. For these reasons, it is important to analyze job schedules.

• Job skills index. These survey measures were adopted from the Woman’s Employment Study (WES).4 Working at jobs that require skills for which there is a high demand in the labor market is an important pathway to advancement. Even if these skills are not compensated for immediately, they may lead to longer-term improvement in labor market outcomes.

• Employer-provided benefits. The availability of benefits is obviously important. A lower-wage job with such key benefits as health and dental insurance may be more economically beneficial than a higher-wage job without benefits. On the other hand, many sample members were eligible for Medicaid, which may have provided more affordable benefits than private employer-based health insurance programs. An important point is that the measures presented in this report reflect self-reported assessments of the availability of benefits. Sample members may have elected not to participate in benefit plans, particularly if the plans were too expensive.

What Was the Overall Effect of ERA on Employment Retention and Advancement?

As discussed in the introduction, ERA in Texas had many goals. The employment goals included initial job placement, employment retention, and advancement.

• Earnings in UI-covered jobs. An impact on average total earnings could reflect improvements in job placement, retention, or advancement or some combination of the three. For this reason, impacts on total earnings are a comprehensive indicator of the effectiveness of ERA.

• Hourly and weekly wages. Measures of earnings are also created from the ERA 12-Month Survey. The survey measures are more refined than the UI data, because earnings can be expressed as hourly wages or as weekly earnings. Thus, the survey measures provide an indication of whether any differences in earnings are “driven” by the number of hours worked or by the wage rates.