What Works During Economic Recessions and Recoveries? Evidence From the Pathways Clearinghouse
OPRE Brief #2021-229
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Associated Project
Pathways to Work Evidence Clearinghouse
Prepared for:
U.S. Department of Health and Human Services, Administration for Children and Families, Office of Planning, Research, and Evaluation
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Key Findings
On average, interventions improve employment outcomes among people with low incomes during recessions and recoveries.
- This report considered 30 interventions implemented during recessions. Of these 30 individual interventions, 8 had favorable effects on outcomes including employment, earnings, education and training, and long-term public benefit receipt. When we averaged across all 30, average effects were also favorable.
- This report considered 95 interventions implemented during recoveries. Twenty-two had favorable effects. When we averaged across all 95, average effects were also favorable.
Specific types of interventions were especially effective during recessions and recoveries.
- During recessions, interventions that primarily focused on case management or other supports, employment services, and work and work-based learning had evidence of improving outcomes. Interventions focused on case management or other supports and employment services show the largest effects during recessions as compared with other types of interventions implemented during recessions.
- During recessions, case management interventions tended to have larger effects than during stable economic conditions, and education and training interventions tended to have smaller effects than during stable economic conditions.
- During recoveries, interventions that primarily focused on education and training, work and work-based learning, employment services, case management or other supports, and incentives and sanctions had evidence of improving outcomes. Interventions focused on education and training and work and work-based learning showed the largest effects during recoveries as compared with other types of interventions implemented during recoveries.
- During recoveries, case management interventions had larger average effects than case management interventions implemented during stable economic conditions.
Providers can consider changing the types of interventions or services they emphasize based on economic conditions.
- During recessions, when unemployment is rising, practitioners and policymakers should consider placing more emphasis on case management or other supports, and less emphasis on education and training.
- During recoveries, when unemployment is falling, practitioners and policymakers should consider targeting resources toward interventions focused on education and training, work and work-based learning, employment services, incentives and sanctions, and case management or other supports.
The COVID-19 pandemic changed employment in dramatic ways worldwide and continues to have lasting impacts. In the United States, at the start of the pandemic, the unemployment rate more than tripled, increasing from 3.5 to 14.8 percent over only two months (U.S. Bureau of Labor Statistics 2021a). Although unemployment rates have decreased from those historic highs, as of September 2021, the unemployment rate remained around 4.8 percent. Moreover, in the same month, unemployment was much higher for several groups—for example, 8 percent for Black men and 12 percent for youth. Much research suggests that even short periods of unemployment can have long-term negative effects on a person’s earnings and employment (Filomena 2021).
Program administrators and managers are considering ways to adapt their programs to the current economic reality. Evidence on programs that have effectively improved employment and earnings for people with low incomes during past recessions and recoveries can help policymakers and practitioners target their resources as they seek to improve employment in the wake of the pandemic and beyond.
To provide support for this decision making, the Pathways Clearinghouse turned to the research literature. First, we conducted a targeted literature scan for articles that considered why and how interventions might be effective during recessions and recoveries. Next, we used rigorous quantitative methods known as meta-analysis and meta-regression to look across interventions and studies reviewed for the Pathways Clearinghouse systematic review in order to provide new evidence about what works to improve employment outcomes for people with low incomes during recessions and recoveries.
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