Abstract
By integrating a business mission into a transitional jobs program, employment social enterprises (ESEs) provide temporary work and a supported work environment to reduce the barriers facing disadvantaged workers while generating revenue to cover production costs. This study uses surveys of workers in and financial statements from seven ESEs to provide information for three sets of complementary analyses: a pre-post analysis examines changes in employment between the time a person starts ESE work and about one year later; a case study uses propensity score methods to compare changes in employment between ESE workers and similar people who did not work in an enterprise; and a cost-benefit analysis estimates the potential value of ESE jobs. Results suggest that individuals have close to 21% gain in employment one year after starting ESE work; taxpayers gain at least $0.42 for every dollar spent on an ESE job; the return to society of developing an ESE is at least 34%; and the social returns to converting a profit-driven business into an ESE exceed 100%. Although the study cannot control for many of the factors that would allow estimation of causal impacts, it provides some of the first preliminary evidence of the value of the ESEs’ public-private approach to increase workforce skills and employment and stabilize lives of individuals with employment barriers.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
The number of issues varied by enterprises, but such comparisons should be interpreted cautiously, because they reflect only the number of separate issues people reported and not their complexity or severity.
The CBA used point estimates for benefits from the six organizations with financial data. Because the seventh organization did not have financial data, the 8% of ESE participants from that organization were excluded from analysis. This exclusion does not influence the conclusions of either the pre-post analysis or the CBA.
We corrected for nonresponse in the pre-post and case study analysis by weighting all data. These nonresponse weights helped mitigate the small differences (5 percentage points or fewer) that occurred between respondents and nonrespondents (Rotz et al. 2015). Response rates varied somewhat by participant characteristics but did not significantly differ by treatment status for the case study, conditional on background factors. For example, respondents in the pre-post analysis were more likely than nonrespondents to (1) have worked in the month or year before social enterprise employment, (2) have education beyond high school, (3) be female, and (4) to need more support to succeed in the labor market, as deemed by program staff. Respondents in the case study enterprise or case study comparison group were less likely than nonrespondents therein to (1) have recently used temporary housing and (2) have been arrested. Differences by gender and education are consistent with typical patterns of survey response (Groves 1992). Differences in employment, temporary housing, and arrest records suggest that less stable participants were less likely to respond to our survey, either because they were more difficult to locate or because they were less likely to agree to participate in the survey once our study team located them.
References
Andersson F, Holzer HJ, Lane JI, Rosenblum D, Smith J (2013) Does federally funded job training work? Nonexperimental estimates of WIA training impacts using longitudinal data on workers and firms. National Bureau of Economic Research (NBER) Technical Working Paper No. 19446. http://www.nber.org/papers/w19446. Accessed 21 Nov 2016
Ashenfelter O (1978) Estimating the effects of training programs on earnings. Rev Econ Stat 60:47–57
Bloom D (2010) Transitional jobs: background, program models, and evaluation evidence. Manpower Demonstration Research Corporation, New York http://www.acf.hhs.gov/programs/opre/resource/transitional-jobs-background-program-models-and-evaluation-evidence. Accessed 11 Aug 2015
Bloom D (2015) Testing the next generation of subsidized employment programs: an introduction to the subsidized and transitional employment demonstration and the enhanced transitional jobs demonstration. Office of Planning Research and Evaluation. U.S. Department of Health and Human Services, Washington DC http://www.acf.hhs.gov/programs/opre/resource/testing-next-gen-subsidized-employ-intro-enhanced-trans-jobs-demo. Accessed 24 Aug 2015
Borzaga C, Defourny J (eds) (2001) The emergence of social Enterprise. Routledge, London
California Department of Corrections and Rehabilitation (CDCR) (2013) Weekly report of population as of midnight March 27, 2013: Total CDCR population, California Department of Corrections and Rehabilitation, Sacramento, CA. http://www.cdcr.ca.gov/Reports_Research/Offender_Information_Services_Branch/WeeklyWed/TPOP1A/TPOP1Ad130327.pdf. Accessed 29 Apr 2013
Common Wealth Ventures, The Social Enterprise Alliance, & The Center for the Advancement of Social Entrepreneurship (2010) Social enterprise: a portrait of the field https://docs.google.com/viewerng/viewer?url=http://community-wealth.org/sites/clone.community-wealth.org/files/downloads/report-cwv-sea-case.pdf. Accessed 22 Jan 2017
Cooney K, Shanks TRW (2010) New approaches to old problems: market-based strategies for poverty alleviation. Soc Serv Rev 15(1):29–55
Crump R, Hotz VJ, Imbens GW, Mitnik OA (2006) Moving the goalposts: addressing limited overlap in the estimation of average treatment effects by changing the estimand. NBER Technical Working Paper No. 330, National Bureau of Economic Research, Cambridge, MA. http://www.nber.org/papers/t0330.pdf. Accessed 22 Apr 2014
Cutler DM, Richardson E (1997) Measuring the health of the United States population. Brookings Papers on Economic Activity: Microeconomics, 217–282. http://links.jstor.org/sici?sici=1057-8641%281997%291997%3C217%3AMTHOTU%3E2.0.CO%3B2-4. Accessed 19 Nov 2016
Cutler DM, Richardson E (1998) The value of health: 1970–1990. Am Econ Rev 88(2):97–100
Davister C, Defourny J, Gregorier O (2004) Work integration social enterprises in the European union: an overview of existing models. EMES working papers no. 04/04. http://emes.net/publications/working-papers/work-integration-social-enterprises-in-the-european-union-an-overview-of-existing-models/. Accessed 3 Nov 2016
Dees JG, Anderson BB (2003) Sector bending: blurring the lines between nonprofit and for-profit. Society 40(4):16–27
Defourny J, Nyssens M (2010) Social enterprise in Europe: at the crossroads of market, public policies, and third sector. Policy and Society 29(3):231–242
Dehejia RH, Wahba S (2002) Propensity score-matching methods for nonexperimental causal studies. Review of Economics and Statistics 84(1):151–161
Groot W (2000) Adaption and scale of reference bias in self-assessments of quality of life. J Health Econ 19(3):403–420
Groves RM (1992) Understanding the decision to participate in a survey. Public Opinion Quarterly 56(4):475–495
Imbens GW (2015) Matching methods in practice: three examples. J Hum Resour 50(2):373–419
Imbens GW, Wooldridge JM (2009) Recent developments in the econometrics of program evaluation. J Econ Lit 47(1):5–86
Kirby G, Hill H, Pavetti L, Jacobson J, Derr M, Winston P (2002) Transitional jobs: stepping stones to unsubsidized employment. Mathematica Policy Research, Princeton http://www.Mathematica-mpr.Com/~/media/publications/PDFs/transitionalreport.Pdf. Accessed 11 Aug 2015
Legislative Analyst’s Office (2013) California’s annual costs to incarcerate an inmate in prison, Legislative Analyst’s Office, Sacramento, CA. http://www.lao.ca.gov/laoapp/laomenus/sections/crim_justice/6_cj_inmatecost.aspx?catid=3. Accessed 29 Apr 2013
Leuven E (2004) A review of the wage returns to private sector training. Paper presented at the joint EC-OECD seminar on Human capital and labour market performance, Brussels, December 8. http://www.oecd.org/els/emp/34932279.pdf. Accessed 3 May 2016
Maxwell N, Rotz D, Dunn A, Rosenberg L, Berman J (2013) The structure and operations of social enterprises in REDF’s social innovation fund portfolio: interim report. Mathematica Policy Research, Oakland http://www.mathematica-mpr.com/our-publications-and-findings/publications/the-structure-and-operations-of-social-enterprises-in-redfs-social-innovation-fund-portfolio-interim-report. Accessed 16 Oct 2014
Nickell S (1981) Biases in dynamic models with fixed effects. Econometrica 49(6):1417–1426
Nyman JA, Barleen NA, Dowd BE, Russell DW, Coons SJ, Sullivan PW (2007) Quality-of-life weights for the U.S. population: self-reported health status and priority health conditions, by demographic characteristics. Med Care 45(7):618–628
Nyssens M (2007) Social enterprise: at the crossroads of markets, public policy, and civil society. Routledge, New York
van Ours JJ (2004) The locking-in effect of subsidized jobs. J Comp Econ 32:27–55
Pathak P, Dattani P (2014) Social return on investment: three technical challenges. Social Enterprise Journal 10(2):91–104
Pavetti L (2002) Helping the hard-to-employ. In: Sawhill I, Weaver K, Haskins R, Kane A (eds) Welfare reform and beyond. The Brookings Institution, Washington, DC
Redcross, C., Millenky, M., Rudd, T., & Levshin, V. (2012). More than a job: final results from the evaluation of the Center for Employment Opportunities Transitional Jobs Program, OPRE report 2011–18, Office of Planning, Research and Evaluation, Administration for Children and Families, U.S. Department of Health and Human Services, Washington, DC
Robles A, Doolittle F, Gooden S (2003) Community service jobs in Wisconsin works: the Milwaukee County experience. June, MDRC. http://www.mdrc.org/sites/default/files/full_61.pdf. Accessed 8 June 2015
Rotz D, Maxwell N, Dunn A (2015) Economic self-sufficiency and life stability one year after starting a social enterprise job. Mathematica Policy Research, Oakland https://www.mathematica-mpr.com/our-publications-and-findings/publications/economic-selfsufficiency-and-life-stability-one-year-after-starting-a-social-enterprise-job
Smith JA, Todd PE (2005) Does matching overcome LaLonde's critique of nonexperimental estimators? J Econ 125(1):305–353
Spear R, Bidet E (2005) Social enterprise for work integration in 12 European countries: a descriptive analysis. Annals of Public and Cooperative Economics 72(2):195–231
Spellman B, Khadduri J, Sokol B, Leopold J (2010) Costs associated with first-time homelessness for families and individuals. Abt Associates, Cambridge
Valentine EJ, Redcross C (2015) Transitional jobs after release from prison: effects on employment and recidivism. Journal of Labor Policy 4:2–17
Vidal I (2005) Social enterprise and social inclusion: social enterprises in the sphere of work inclusion. International Journal of Public Administration 28(9/10):89–107
Young DR, Salamon LM (2002) Commercialization, social ventures, and for-profit competition. In: Salamon L (ed) The state of nonprofit America. The Brookings Institution, Washington, DC
Acknowledgements
This research is derived from earlier work with our valued colleague Adam Dunn. We also thank Melissa Dugger and her team for heroic surveying efforts; Anne Gordon, Josh Haimson, Debbie Reed, and David Neumark for comments and feedback on earlier work; Kathryn Gonzales for outstanding technical and research assistance; and Christina Garcia and Tracy Lam-Hine for providing the cost data. This paper is based on work supported by the Corporation for National and Community Service under Social Innovation Fund Grant No. 10SIHCA001. Opinions or points of view expressed are those of the authors and do not necessarily reflect the official position of, or a position that is endorsed by, the Corporation or the Social Innovation Fund program.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of Interest
Both authors work for Mathematica Policy Research, which received funding to conduct the evaluation from which data used in this study were derived.
Electronic supplementary material
ESM 1
(DOCX 119 kb)
Rights and permissions
About this article
Cite this article
Maxwell, N.L., Rotz, D. Potential Assistance for Disadvantaged Workers: Employment Social Enterprises. J Labor Res 38, 145–168 (2017). https://doi.org/10.1007/s12122-017-9248-5
Published:
Issue Date:
DOI: https://doi.org/10.1007/s12122-017-9248-5
Keywords
- Employment social enterprises
- Work integrated social enterprises
- Transitional jobs
- Job training
- Employment barriers