The Post-Program Labor Market Dissipation Effect
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.
Picture this
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.
What the evidence says
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.
- Who
- 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.
- How
- Multi-year longitudinal tracking using IRS tax records, state employment security databases, and administrative school records following random lottery assignment.
What to do
Separate policy expectations for summer youth employment, treating them as targeted behavioral and safety interventions rather than standalone long-term career development solutions.
From the source
"Besides a small effect in the year after the program summer, SYEP participation did not help youth find jobs in subsequent years."
Stopping a Bullet with a Summer Job