Potential Assistance for Disadvantaged Workers: Employment Social Enterprises

Publisher: Journal of Labor Research (online ahead of print)
Apr 14, 2017
Authors
Nan L. Maxwell and Dana Rotz

Key Findings:

  • Individuals may have close to 21% gain in employment one year after starting employment social enterprise (ESE) work.
  • Taxpayers may gain at least $0.42 for every dollar spent on an ESE job.
  • The return to society of developing an ESE may be at least 34%.
  • The social returns to converting a profit-driven business into an ESE may exceed 100%.
By integrating a business mission into a transitional jobs program, employment social enterprises (ESEs) provide temporary work and a supported work environment to reduce the barriers facing disadvantaged workers while generating revenue to cover production costs. This study uses surveys of workers in and financial statements from seven ESEs to provide information for three sets of complementary analyses: a pre-post analysis examines changes in employment between the time a person starts ESE work and about one year later; a case study uses propensity score methods to compare changes in employment between ESE workers and similar people who did not work in an enterprise; and a cost-benefit analysis estimates the potential value of ESE jobs. Results suggest that individuals have close to 21% gain in employment one year after starting ESE work; taxpayers gain at least $0.42 for every dollar spent on an ESE job; the return to society of developing an ESE is at least 34%; and the social returns to converting a profit-driven business into an ESE exceed 100%. Although the study cannot control for many of the factors that would allow estimation of causal impacts, it provides some of the first preliminary evidence of the value of the ESEs’ public-private approach to increase workforce skills and employment and stabilize lives of individuals with employment barriers.