Research Round-Up

This blog post summarizes a few recent research reports that contain some interesting findings (to me, at least) but have not received a lot of coverage in the more popular blogs and e-newsletters floating around the internet.  Happy reading and researching!!

Do Self-Employment Assistance Programs Work? A new Mathematica Policy research paper takes a deep look at the US Labor Department’s Self-Employment Assistance (SEA) programs.  These efforts began in the 1990s as a pilot project that allowed unemployed workers to use their unemployment insurance (UI) funds to pursue self-employment opportunities.    This was a big shift in UI policy as recipients are typically required to pursue training or to be engaged in active job searches.  How has the SEA effort worked?   To date, the results are somewhat mixed and uncertain due to data limitations.  However, a few findings stand out.  Very few unemployed people—far less than 1%– opted to use the program.   In this group, SEA program participants tend to receive more UI benefits and have lower wages than comparable UI recipients.   Only about 1/3 of participants started a business in the first quarter of receiving SEA benefits, but 40% of those who started companies were still in business at the end of the year.   A few states linked SEA to other training and support services.  This help seems to improve business outcomes, but is typically not a required part of the program due to budget limitations.   These early findings suggest that self-employment programs can work in helping the unemployed pursue entrepreneurship.  However, these programs often require added investments and consulting services that may not always be readily available due to budget constraints.

How Much Demand for Middle Skill Jobs?  We’ve all read numerous articles outlining the boom in demand for middle skills jobs, i.e. occupations that require an associate’s degree or other training short of a four-year college degree.   A new Federal Reserve research paper examines the details on market demand for middle skill level workers.  It finds that demand levels vary greatly by geography.  In dense metropolitan areas with high numbers of college graduates, employers are much more likely to require a college degree as a prerequisite for middle skill level jobs.   In rural regions, the demand for college level training is less common.  To give one specific example of potential “requirements inflation,” Seattle-based employers are 21% more likely to require a college degree for retail supervisor jobs than employers found elsewhere in the US.  These results suggest that middle skill workers may face more economic mobility challenges if they live in metropolitan areas where training requirements for middle skill jobs are more stringent.

States and the Gig Economy:   Observers have long noted that state and local governments are “laboratories of democracy” that test new policy ideas and approaches that might not fly in Washington.   A new Stateline analysis examines how states are considering new ways to provide benefits to gig or independent economy workers.   A newly proposed bill in Washington State would require companies like Uber, Etsy, and Lyft to make contributions into an independent fund that would then be used to pay for health insurance and other benefits for their contractors.   Much recent legislation has focused on benefits for free lancers; this proposal is one of the first to look at new ways to provide a social safety net for those involved in the platform economy.