Providing employment-related services, including supported employment through job coaches, to individuals with developmental disabilities has been a priority in federal policy for the past twenty years starting with the Developmental Disabilities Assistance and Bill of Rights Act in 1984. We take advantage of a unique panel data set of all clients served by the SC Department of Disabilities and Special Needs between 1999 and 2005 to investigate whether job coaching leads to stable employment in community settings. The data contain information on individual characteristics, such as IQ and the presence of emotional and behavioral problems, that are likely to affect both employment propensity and likelihood of receiving job coaching. We control for unobserved heterogeneity and endogeneity using fixed effects and instrumental variable models. Our results show that unobserved individual characteristics and endogeneity strongly bias naive estimates of the effects of job coaching. However, even after controlling for these, an economically and statistically significant effect remains. JEL codes: J29, I38, J14 Key terms: Supported employment, job coaching, employment of the disabled ∗The information provided in this manuscript was in part supported by Grant/Cooperative Agreement Number U59/CCU421834 from the Centers for Disease Control and Prevention (CDC). We thank Seminar participants at SEA Annual Meeting and the ASHE biannual meeting, Kin Blackburn, Scott Gross and Michele Sylvester for their helpfull comments and advice. We also would like to thank Jerry Junkins, the director of the job coach program at DDSN and Stanley Butkus, the state director of DDSN in South Carolina, for his help. The contents are solely the responsibility of the authors and do not necessarily represent the official views of CDC. †Department of Economics, University of South Carolina ‡Department of Economics, University of South Carolina. §Department of Family and Preventive Medicine, University of South Carolina ¶Department of Family and Preventive Medicine, University of South Carolina
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