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UK ERA UK Employment Retention and Advancement Demonstration

UK ERA UK Employment Retention and Advancement Demonstration. Policies Studies Institute Seminar London, England 6 December 2011. Final Impact and Cost-Benefit Results. Goals of the UK ERA demonstration 2003-2011.

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UK ERA UK Employment Retention and Advancement Demonstration

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  1. UK ERAUK Employment Retention and Advancement Demonstration Policies Studies Institute Seminar London, England 6 December 2011 Final Impact and Cost-Benefit Results

  2. Goals of the UK ERA demonstration2003-2011 Test a new model to help low-income groups keep jobs and advance in labor market • Little attention was paid to these issues in British or US welfare-to-work policy • New demo inspired by US example (ERA) • “Hunches,” but no evidence on what did/didn’t work Help build capacity in UK to conduct large-scale random assignment experiments Not your typical British “pilot”

  3. Transatlantic collaboration Evaluation sponsor • UK Department for Work and Pensions (DWP) US Research Partner • MDRC (NYC-based, non-profit social policy research organization; leader in RCTs) UK research partners • Policy Studies Institute (PSI) • Institute for Fiscal Studies (IFS) • National Institute for Economic & Social Research (NIESR) • Office for National Statistics (ONS) Lessons traveled in both directions!

  4. UK ERA Target groups Unemployed and entering New Deal welfare-to-work program: (1) New Deal Lone Parents (NDLP) • New Deal 25-Plus (ND25+) Working part-time (lone parents): (3) Working Tax Credit (WTC) group

  5. UK ERA model Operates within Jobcentre Plus centers • Separate staff • In some offices, separate post-employment teams 33-month program: • If unemployed at intake, get job placement through New Deal w-t-w program (~ 9 months) • Post-employmentfor all who work: 24+ months of “in-work” job coaching and support from “Advancement Support Advisors” 24 months of financial incentives

  6. Financial incentives Retention bonus  £ 400 3 times/yr for for sustained full-time work 2 yrs (£ 2,400 total) Tuition assistance if combine training + work£ 1,000 Tuition bonus if complete training up to £ 1,000 In-work emergency funds £ 300/worker

  7. The pilot sites 6 districts (Total N = 16,000 people): • 4 districts in England • (E. Midlands, London, NE England, NW England) • 1 in Scotland • 1 in Wales Spread across 58 local offices (where random assignment took place)

  8. Implementation, impact, benefit-cost analyses Administrative records: up to 5 years of follow-up Employment and earnings (Labor Market Information Survey) Benefit receipt Bonus payments 3 waves of client surveys 1-year for all 2-year and 5-year for lone parents Qualitative observations and interviews ERA staff and participants Cost data Comprehensive evaluation 8

  9. What did participants want? NDLP lone parents Many who entered work wished to defer full-time work or work+ training because of caring responsibilities, especially if had younger children WTC lone parents Many attracted to ERA because of offer of training support Not all wanted full-time work ND25+ When they worked, tended to work full time Many didn’t want deep ongoing engagement with ERA or JP+

  10. Target group #1New Deal for Lone Parents (NDLP)

  11. New Deal for Lone Parents (NDLP) • Not working at baseline • Receiving Income Support • Volunteered for New Deal welfare-to-work program (and ERA)

  12. NDLP: Lone parents not working at baselineRandom assignment PRE- employment POST-employment ERA New Deal Welfare-to-work + advancement focus In-work support + incentives ERA JOB New Deal intake Regular New Deal Welfare-to-work Control JOB Random assignment 12

  13. Implementation: Big challenge for JC+ New Deal phase: ERA vs. Control “treatment difference” minimal beyond offer of incentive/support Post-employment: Struggles providing meaningful “in-work” services, but improvement over time • Primacy of placement goals of JC+ • Steep “learning curve” for advisers • Challenges maintaining contact with working participants Still, a “fair test” post-employment model • More “in-work” help/advice for ERA group than controls • Most ERA participants aware of incentives offer

  14. NDLP: Lone parents not working at baselineGot “help/advice” from JC+ while employed (years 1 – 2) • Among workers: Got help/advice on ANY advancement issue while working? Base = WORKERS in each group

  15. NDLP: Lone parents not working at baselineImpacts on training/education (years 1-2) Obtained any training qualifications Participated in training or education ERA Control ERA Control 15

  16. NDLP: Lone parents not working at baselineImpacts on training/education (years 1-2) Obtained any training qualifications Participated in training or education + 4.8 pp** (+9%) + 1.7 pp (ns) ERA Control ERA Control 16

  17. NDLP: Lone parents not working at baselineImpacts on employment Ever worked in 5 years Ever worked full time in years 1-2 Months worked in 5 years ERA Control ERA Control ERA Control 17

  18. NDLP: Lone parents not working at baselineImpacts on employment Ever worked in 5 years Ever worked full time in years 1-2 Months worked in 5 years ERA Control ERA Control ERA Control 18

  19. NDLP: Lone parents not working at baselineImpacts on earnings trends Earnings(£) Control group Tax Year

  20. NDLP: Lone parents not working at baselineImpacts on earnings trends Earnings(£) ERA group Control group Tax Year

  21. NDLP: Lone parents not working at baselineImpacts on earnings, by tax year 4-year total Early (2005-6) Last (2008-9) + £ 308 ** (+ 9%) ERA Control ERA Control ERA Control 21

  22. NDLP: Lone parents not working at baselineImpacts on 4-year total earnings, by education subgroup Lowest (No qualifications) Middle (GCSE) Highest (A-level) 22 ERA Control ERA Control ERA Control

  23. NDLP: Lone parents not working at baselineImpacts on 4-year total earnings, by education subgroup Lowest (No qualifications) Middle (GCSE) Highest (A-level) + £ 3,537** (+ 16%) ††† - £ 637 (ns) - £ 634 (ns) 23 ERA Control ERA Control ERA Control

  24. Not because of increase in training! Impact on training = 0.2 % Impact on earnings = 15.5 % Hypothesis: ERA tapped their “reserve capacity” At entry: Not working, but interested in work – although some reluctance to work full time With A-level qualifications, if they chose to work, they’d have better job opportunities ERA incentives and support may have gotten some to try full-time work • NDLP: Lone parents not working at baseline • Why did A-level subgroup do better? 24

  25. Examined through cross-office analysis (multi-level model) 58 offices in which random assignment occurred; 37 with sufficient sample/data for comparison Did variation in implementation influence size of ERA’s office-level impacts on work and welfare – after holding constant x-office differences in parents’ characteristics? Found larger impacts in offices where: Greater participant awareness of incentives (better marketing) More in-work help received (vs. controls) Thus: Both services and incentives mattered – but incentives may have mattered somewhat more NDLP: Lone parents not working at baseline Incentives vs. services 25

  26. Ethnic minority findings: Bigger effects? Exploratory subgroup analysis – small samples NDLP (and WTC): Larger impacts on work and earnings and reductions in benefits for ethnic minorities than for whites – not always statistically sign., but a pattern ERA countered lower-expectations for this group? Few non-economic impacts on parents or children Little evidence of positive – or negative – effects on overall well-being NDLP: Lone parents not working at baseline Other findings 26

  27. Target group #2Working Tax Credit (WTC)Lone Parents

  28. Working Tax Credit (WTC) lone parents • Already working part-time (16-19 hours/week) • Receiving Working Tax Credit • More attached to labour market and more advantaged in general • Volunteered for ERA, beginning with post-employment phase

  29. WTC: Lone parents working part-time at baseline Random assignment POST-employment In-work support + incentives ERA Apply for ERA JOB Control Random assignment 29

  30. WTC: Lone parents working part-time at baseline Got “help/advice” from JC+ while employed (years 1 – 2) • Among workers: Got help/advice on ANY advancement issue while working? Base = WORKERS in each group

  31. WTC: Lone parents working part-time at baseline Impacts on training/education (years 1-2) Participated in training or education Obtained any training qualifications + 12.6 pp*** (+21%) + 4.5 pp** (+16%) ERA Control ERA Control 31

  32. WTC: Lone parents working part-time at baseline Impacts on employment Ever worked in 5 years Ever worked full-time in years 1-2 + 1.3 pp (ns) Months worked in 5 years + 11.5 pp*** (+ 38%) + 0.2 months (ns) ERA Control ERA Control ERA Control 32

  33. WTC: Lone parents working part-time at baseline Impacts on earnings trends Earnings(£) Control group Tax Year

  34. ERA programme ended for all by October 2007 (earlier for some) WTC: Lone parents working part-time at baseline Impacts on earnings trends Earnings(£) ERA group Control group Tax Year

  35. WTC: Lone parents working part-time at baseline Impacts on earnings, by tax year Early (2005-6) Last (2008-9) 4-Year Total + £ 921 (ns) + £ 402 ** (+ 6%) + £ 234 (ns) ERA Control ERA Control ERA Control 35

  36. WTC: Lone parents working part-time at baselineImpacts on training, by subgroup (Took training or education course, years 1-2)

  37. WTC: Lone parents working part-time at baseline • Payoff to impact on training? Impact on “obtained qualifications” (16.2% **) % Change Impact *** **

  38. WTC: Lone parents working part-time at baseline • No association between • training impacts and earnings impacts Impact on “obtained qualifications” (16.2% **) NO Impact on total 4-year earnings (3.1% ns) % Change Impact *** **

  39. Were courses occupationally relevant? Some for personal enrichment or hobbies • E.g. aromatherapy, flower arranging Some “safety” or non-advancement on the job • (e.g., CPR) Course content analysis: • Verbatim responses to the 12-month and 24-month surveys were analyzed and coded • Developed training typology

  40. WTC: Lone parents working part-time at baseline Impacts by type of trade-specific course .

  41. . WTC: Lone parents working part time at baseline Impacts by type of “general” course

  42. Possible reasons: Unrealistic expectations about “dream job”? Not driven by demand for workers Advisers were employment ‘generalists’ No assistance in making transition between specific training and specific job openings • WTC: Lone parents working part-time at baseline • So why no payoff to training impacts? 42

  43. Converting training into advancement

  44. Target group #3New Deal 25 Plus (ND25+)

  45. New Deal 25 Plus (ND25+) • Claiming Jobseeker’s Allowance (JSA) for at least 18 months • Participation in ND25+ is compulsory • Participation in ERA experimentvoluntary

  46. ND25+: Long-term unemployed at baseline Random assignment PRE- employment POST-employment ERA New Deal Welfare-to-work + advancement focus In-work support + incentives ERA JOB New Deal intake Regular New Deal Welfare-to-work JOB Control Random assignment 46

  47. ND25+: Long-term unemployed at baseline Got “help/advice” with advancement from JC+ while employed (years 1 – 2) • Among workers: Got help/advice on ANY advancement issue while working? (NDLP ERA = 61% ) (WTC ERA = 75%) Base = WORKERS in each group

  48. ND25+: Long-term unemployed at baseline Control group employment rates 61% WTC % Employed Months after Random Assignment

  49. ND25+: Long-term unemployed at baseline Impacts on employment Ever worked In 5 years Months worked in 5 years ERA Control ERA Control 49

  50. ND25+: Long-term unemployed at baseline Impacts on employment Ever worked In 5 years Months worked in 5 years + 2.2 pp* (+ 4%) + 1.1 months** (+ 8%) ERA Control ERA Control 50

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