Examination of the Role of For-Profit Labor Market Intermediaries Hiring TANF Recipients and Other Disadvantaged Workers

Labor market intermediaries (LMIs) reduce the information, training, and legal costs of hiring disadvantaged workers, thereby expanding their employment opportunities. Because of the comparative advantage LMIs have in helping put disadvantaged workers into jobs, many state welfare and employment agencies are outsourcing their training and placement services to these firms.

While consistent with federal welfare and job training/placement legislation, the reliance on the private sector to mediate welfare-to-work transitions raises concerns about the quality of jobs and the longer-term employment opportunities available to those exiting welfare via this route. Joshua Haimson and Robinson Hollister will examine the complex interactions between LMIs, end-user firms, welfare/employment agencies, and disadvantaged workers in New Jersey. The project will consist of a large-scale survey of welfare recipients, interviews with program staff of employment agencies, and in-depth studies of several New Jersey counties based on firm and household surveys, interviews, and administrative data. The principal investigators will then collect complementary data on LMIs.