It is clear that rigorous impact research is needed to measure the relative effectiveness of these practices. However, it is equally clear that several preliminary research steps must be taken before such research can be carried out. First, it is important to document the use of various employer practices in recruiting, hiring, supporting, and managing employees. What are these practices and how often are they used by different types of employers? How often are recruitment, hiring and employment functions outsourced, and how frequently are different types of intermediaries used for this purpose? A new survey is probably the best way to take this important first step, and would be an important end in itself. However, further analysis of the Holzer employer surveys and the Welfare to Work Partnership intermediary surveys also would be beneficial.
Second, it is critical to develop testable hypotheses for alternative practices and intermediaries. A new survey would also help in doing this, particularly if it involves in-depth data collection on particular practices and intermediaries. Other research efforts, notably systematic case studies on innovative practices and specific analyses of existing quantitative datasets, would also be useful toward this end.
(17) In the survey employers were asked a series of questions about the most recent TANF recipient they hired, including "How was this employee recruited?" and "Did you have the applicants take any test?" Later they were asked a series of questions about the job performance of the same individual, including questions about absenteeism, tardiness, and overall performance.
(19) See G. Burtless, "Are Targeted Wage Subsidies Harmful? Evidence from a Wage Voucher Experiment", Industrial and Labor Relations Review. vol. 39 (1985).
(20) A classic experimental research design would entail randomly assigning job applicants and/or employees from a variety of employers to treatment and control groups; the intermediaries would work only with the treatment group, and employment and other outcomes for these two groups would be compared. An alternative design would involve random assignment of employers. After identifying enterprises with an interest in partnering with the intermediaries, the enterprises could be assigned to treatment or control status and the intermediaries would provide services only to enterprises in the treatment group. The outcomes of new employees of the treatment enterprises would be compared to those of new employees in the control enterprises.
(21) Community Development Financial Institutions (CDFIs) also offer an interesting alternative approach to promoting demand for labor from welfare recipients and other low-income individuals. Among the more than 500 CDFIs in the country overseen by the U.S. Treasury Department, there are a number of community venture funds that make equity investments in local businesses that locate in and employ people from high-poverty neighborhoods.
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