Pay for Success: How Emerging Finance Tools Are Supporting Workforce Development
Milliken Bonds, Jeanne
Federal Reserve Bank of Richmond
Pay for Success (PFS) is a public policy tool that may be used in the workforce development sector to test new programs guided by predetermined outcomes for a target population or a community. PFS is a contractual arrangement that ties payment for delivery of services to specific, measurable outcomes. Through the contract, it ensures quality and effective services that hopefully will lead to long-term positive change for both the individuals and communities. For example, outcomes may be measured by participants in job training programs finding and sustaining employment, and ultimately experiencing wage increases.