Overview of Findings: What Works During Economic Recessions and Recoveries? Evidence from the Pathways Clearinghouse

In spring 2020, COVID-19 changed employment across the world in dramatic ways. In the United States, the unemployment rate more than tripled, increasing from 3.5 to 14.8 percent over only two months (U.S. Bureau of Labor Statistics 2021). Although unemployment rates later decreased from those historic highs, as of September 2021, the unemployment rate remained around 4.8 percent. Moreover, 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).

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 support these decision makers, we turned to the research literature. We used that literature to inform a meta-analysis of data from the Pathways Clearinghouse to understand the interventions and types of services with the strongest evidence of success in improving employment, earnings, and related outcomes for people with low incomes during recessions and recoveries. We assessed the following questions:

• Do interventions designed to improve employment outcomes for people with low incomes show evidence of effectiveness during recessions and recoveries?
• What specific types of interventions work to improve employment outcomes for people with low incomes during recessions and recoveries? Are specific types of interventions more or less effective during recessions or recoveries?
• How should providers consider altering operations in response to economic conditions?

For this analysis, we examined the effects of interventions for people with low incomes on employment, earnings, long-term public benefit receipt, and education and training outcomes. We did not examine effects on short-term benefit receipt—one of the outcomes the Pathways Clearinghouse typically examines—in this analysis because immediately reducing public benefit receipt might not be desirable in all economic conditions. We defined recessions as periods of rising unemployment (years in which the national unemployment rate grew by 0.5 percentage points or more), recoveries as periods of declining unemployment (years in which the national unemployment rate fell by 0.5 percentage points or more), and stable economic periods as those with steady unemployment (years in which the national unemployment rate neither rose nor fell by more than 0.5 percentage points).

This overview provides a brief summary of findings on interventions to improve outcomes during different economic conditions. This full report provides further information on methods and more findings.