The Post-Program Labor Market Dissipation Effect

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In Simple Words

Short-term subsidized summer jobs function like temporary training wheels that assist a rider while installed, but do not automatically build the full long-term economic infrastructure or market demand needed for sustained future career advancement once removed.

NYC youth who would take a summer job

Without SYEP
Estimated comparison outcome
With SYEP
About $100 less earned in each later year

SYEP raised program-year earnings but reduced earnings by about $100 in each of the next three years. The visual selects the card’s actual post-program earnings result. Each of three years after SYEP. Effect among youth who would participate; not a before-and-after earnings change.

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Research question

Policy makers routinely assume that short-term summer youth employment programs function as effective engines for long-term career advancement, future wage expansion, and higher academic attainment among disadvantaged youth. However, evidence regarding sustained employment improvements following program completion remains limited.

Participants

Applicants across New York City SYEP (2005–2008 cohorts, >30,000 youth/year) and Chicago OSC+ (2012–2013 cohorts, >5,000 youth/year) programs serving predominantly low-income minority youth.

Study Design

Multi-year longitudinal tracking using IRS tax records, state employment security databases, and administrative school records following random lottery assignment.

Results

SYEP participation increased in-program job probability by 71 percentage points and yielded $1,085 in program earnings ($876 net gain after $209 crowd-out of alternative income), but reduced subsequent earnings by ~$100 annually across the three post-program years. OSC+ increased program-summer formal employment by 85 percentage points (from a 12% baseline) and earnings by ~$1,000, but exhibited zero statistically significant impact on post-program employment, earnings, grade point average, or college enrollment.

Takeaway

Separate policy expectations for summer youth employment, treating them as targeted behavioral and safety interventions rather than standalone long-term career development solutions.

Source and citation

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Plain-English glossary

Original explanations, informed by the references below. Examples are illustrations, not data from the studies above. The research text stays unchanged.

Longitudinal study

A study that checks the same group of people at different times. This lets researchers examine how things change over time.

ExampleResearchers ask the same workers about their wellbeing at the start, after three months and after six months.

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Percentage points

The difference between two percentages.

ExampleA rise from 40% to 50% is 10 percentage points. Relative to the starting value, that is a 25% increase.

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Statistically significant

A label used when a result passes a chosen statistical threshold, often p < 0.05. It does not show how large or useful an effect is. A result that is not statistically significant does not prove there is no effect.

ExampleA study reports p = 0.03 against a 0.05 threshold. It passes that test, but the effect could still be too small to matter.

American Statistical Association · Statement on p-values ↗Read more about statistically significant →

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