Are First Source Hiring Agreements Effective? Evidence from Oregon

Abstract

Local economic development policies are often justified in terms of their employment impacts on populations and communities in need, but evidence suggests the linkages are indirect, at best. To improve the social return on economic development investments, several cities and states have developed “First Source Hiring” policies that obligate employers receiving economic development incentives to utilize publicly‐sponsored workforce services, improving the odds of targeting benefits to disadvantaged groups. But the evidence on the efficacy of these policies is lacking. Using administrative data for two Oregon counties, this research examines whether the initiation of a First Source Hiring Agreement affects who employers hire, their use of public workforce systems, and labor turnover rates. This research will inform labor market policy efforts to enhance the employment outcomes for disadvantaged workers and populations, and make local economic development efforts more effective and accountable