Upward Mobility in HUD’s Jobs Plus Program: An Expert Q&A | How Housing Matters

Upward Mobility in HUD’s Jobs Plus Program: An Expert Q&A

August 08, 2018  
 
 
 

Amid the US Department of Housing and Urban Development’s (HUD’s) recent emphasis on policies that increase employment among assisted renters, understanding housing-based self-sufficiency programs is more important than ever. Although proposals to increase work through requirements and minimum rent increases have attracted attention, HUD already offers programs through which housing authorities and private owners can encourage and support residents in making economic progress. Through a periodic series, How Housing Matters will clarify the evidence to date on economic mobility programs at HUD.

For the second post in this series, we asked James Riccio and Nandita Verma, director and senior associate, respectively, at the research organization MDRC, about the evidence behind the Jobs Plus program, which connects public housing residents with employment, education, and financial empowerment to help them find and keep better-paying jobs.

Jobs Plus started as a HUD demonstration in six cities between 1998 and 2003. The program took an existing public housing development and added three forms of work supports for everyone residing there. Following the demonstration, a few locations replicated the approach with some modifications. (A study examining the effects of New York City’s replication of Jobs Plus is under way, but its results are not yet public.) By 2015, evidence from the initial demonstration led HUD to fund a new Jobs Plus pilot and later commission new studies on the expansion effort, including one that documents implementation lessons from the first nine expansion sites.

With funding recently announced for seven new Jobs Plus sites, the program remains among HUD’s evidence-based tools for promoting employment.

What is the theory about how this approach can increase work and promote economic mobility for HUD-assisted renters?

Jobs Plus is envisioned as a place-based initiative framed around three components: employment-related services, rent-based work incentives (so that earnings increases are not triggers for increasing rent), and a community context that supports work. Its underlying theory assumes that “tackling a variety of obstacles to work through a combination of employment services, financial incentives, and social network strategies would enhance residents’ interest in and commitment to working, their capacity to look for and find work, their skills to qualify for better jobs, and their knowledge about job opportunities. These changes, in turn, would increase their participation and success in the labor market and reduce their reliance on government benefits. Increases in employment and earnings, if they occurred, would then foster improvements in the quality of life within the developments and residents’ own personal and family well-being, growing out of residents’ increased income and more productive engagement in society.”

Its three components are to be implemented at saturation levels—that is, targeting all working-age residents in the development. It also calls for a broad range of stakeholders to work together to build stronger and sustainable programs. Since the 1990s, Jobs Plus has been replicated by a number of housing agencies, and most recently, scaled up by HUD. These replications remain similar in structure to the original model but modify certain ways in which aspects of the model are implemented—changes to the rent incentive, for instance, keeping intact the inspiration, theory, and rationale that shape this program.

What does the evidence suggest about its effects on residents’ employment and earnings?

The main evidence about the program’s effects come from the original Jobs Plus evaluation, completed in 2005. The impact evaluation examined effects by comparing outcomes for residents of the Jobs-Plus developments with outcomes for their counterparts in similar “comparison” developments that did not operate the program. (Because housing developments were allocated randomly to the Jobs Plus or comparison group, their outcomes provide an especially rigorous basis for estimating program impacts.)

One finding from that early evaluation, which has been important for HUD’s recent scale-up of this program, is that in the three sites where all three components of the model were in place, implemented properly, and sustained, residents earned 16 percent more per year than residents in comparison developments, an effect that endured for the seven years of the study. In other words, Jobs Plus (a four-year program) had discernable impacts three years after the interventions ended. These results showed that it was feasible to operate the Jobs Plus model and that, under certain circumstances, it generates positive impacts for residents of these communities.

New evidence should be available starting in 2019. HUD recently commissioned an impact assessment of its scale-up of Jobs-Plus in 24 locations around the country. Using three to four years of follow-up, MDRC will assess the effects of the HUD Jobs Plus replication effort. The study will also examine the longer-term gains in residents’ earnings from the original Jobs Plus demonstration, 14 years after the end of the intervention. Whether these gains translate into long-term improvements in residents’ children’s employment and earnings is also of secondary interest. These results will provide important evidence about the sustained effects of the original program and whether the effects are observed when the program is replicated in varied settings.

Are there any groups of HUD-assisted renters or market conditions for which this approach is more effective or less effective?

The evidence from the original evaluation showed that the program was effective for many different types of public housing residents. In the sites where the model was fully implemented, it had large positive earnings effects for many subgroups of residents. For example, it caused earnings to increase for men as well as for women, for residents who were receiving welfare when the program began and for those who were not, and for residents from different racial and ethnic groups. It also worked for subgroups of residents defined in terms of age, past employment, past duration of residence, and future residential mobility. In the two sites with sizable populations of men, Jobs Plus’s earnings impacts were exceptionally large for immigrant men.

Although Jobs Plus was effective in boosting earnings both for welfare recipients and nonrecipients, it was much more effective for nonrecipients. This difference may reflect the fact that welfare recipients in comparison developments experienced a “push” toward work and had access to services and financial incentives through existing mandatory welfare-to-work programs, time limits on benefits, and other features of welfare reform in their localities at that time.

In contrast, nonrecipients would not have been affected by these policies. Thus, for the nonrecipients, Jobs Plus may have represented a bigger additional (or net) intervention in their lives than it did for recipients. The evidence also suggests that impacts were more likely to translate into higher earnings in the housing development as a whole in sites that experienced lower levels of residential mobility.

What do we know about the costs of operating Jobs Plus?

A formal cost-effectiveness analysis of Jobs Plus has not been conducted, but estimates are available of the program’s gross cost, which are important for understanding the level of resources needed for this type of investment and how they may be allocated across the program components. The rough gross cost estimate from the original Jobs Plus demonstration is around $2,500 annually per eligible working-age resident (converted to 2017 dollars using the Consumer Price Index).

This estimate pertains to housing agency (or internal) costs and includes the rent incentive. This would imply that a housing agency with, say, about 250 eligible, working-age residents may need an annual budget of about $625,000 per year to provide the on-site services and rent incentives. About 35 percent of the estimated annual budget was spent on rent incentives, while about 65 percent was required for all other budgeted expenditures associated with the program. However, a number of factors can make the on-site operating costs lower or higher than projected here. The cost analysis conducted as part of the Social Innovation Fund (SIF) Jobs Plus replication effort, for example, suggested lower annual costs. Partially because of the way the rent incentive (the HUD earned income disregard, or EID) was administered and its low take-up rates, the estimated gross costs per household were much lower for the SIF sites than the original demonstration.

More cost estimates should soon be available from the evaluation of the first nine sites to receive HUD grants to operate the program, as part of HUD’s scale-up of this program.

What steps would policymakers or housing providers need to take to sustain this program, expand the number of residents served, or replicate it in other areas?

Today, most sites operating Jobs Plus receive four-year federal grants, following which funding ends. This raises questions about the most feasible way to sustain Jobs Plus as an ongoing national policy and program.

With fixed federal funding, it might be worth funding sites long enough to stabilize their programs and secure local sustainability funding. This way, local stakeholders would be more deeply invested in maintaining the program after federal funding ends. New York City invested $24 million in expanding Jobs Plus to 23 developments, funded mostly out of the city’s budget with tax dollars, offering an example of a sustainability model. (Note that New York City’s scale-up was limited to relying on the existing EID for the financial incentive component, which was much weaker than the original model’s incentive, or HUD’s replication Jobs Plus EID.)

Interagency collaboration at the federal level could also be leveraged. For example, given the high proportion of residents receiving benefits from the Supplemental Nutrition Assistance Program (SNAP) and the SNAP system’s increasing focus on work, this might be an important collaboration for HUD to consider.

Finally, the original demonstration provided circumstantial evidence that rent incentives may have played a key role in generating the program impacts. Thus, is it plausible for federal rent policy to include features that incentivize work (such as the triennial recertification feature being tested in HUD’s Rent Reform Demonstration for Moving to Work sites).

With a strong financial incentive folded into rent policy, the public housing agencies, local workforce agencies and service providers, and funders may be able to come together to support the other core components of Jobs Plus and create sustainable programs. Collaboration in the original Jobs Plus demonstration, which involved mandatory partners, was an effort to build that type of sustainability on the non–rent incentive components of the model. Perhaps the HUD replication could be structured to help sites leverage and build sustainable local partnerships.

Illustration by John Wehmann/Urban Institute

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