This is an interesting studyof the effects of a recent subsidised temporary employment scheme in the US. Title of the study: An Evaluation of ARRA-Funded Subsidized Employment Programs. ARRA stands for American Recovery and Reinvestment Act (2009).
The scheme concentrated on the long term unemployed, and subsidised employment lasted up to 12 months.
Some of the conclusions of the study were as follows, but note that the following four points do not do the study justice: the study is made up of very roughly 50,000 words and 100 charts. So study it yourself if you want a fuller picture.
1. The scheme improved the post subsidised employment earnings and employment record of those involved. Those placed with private or “for-profit” employers benefited more than those placed with public sector employers (p.50).
(Studies into similar programs in Switzerland about ten years ago found likewise. See here and here.)
2. Private sector or “for-profit” employers were more likely to retain subsidised employees after expiration of the subsidy than public sector employers. Overall, 37% of subsidised employees were retained in expiration of the subsidy.
3. Trying to induce employers to retain subsidised employees when the subsidy expires seems to be counter-productive.
4. Public sector employers were more willing to retain less skilled employees than private sector employees. (Surprising, since public sector employees tend to more skilled than private sector ones, at least in the UK).