Active labour market policies in Ireland: What works?

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Elish Kelly delivered this presentation at the Dublin Economics Workshop on Saturday, 14th September. More information about the event, including other presentations delivered at the workshop, can be found here: https://www.dublineconomics.com/
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  • 1. Active Labour Market Policies in Ireland: What Works? Elish Kelly Economic and Social Research Institute DEW Annual Irish Economic Policy Conference, Wexford 13 -14 September 2019
  • 2. Outline  Back to Education Allowance (BTEA) Scheme  Objectives  Results  Conclusions
  • 3. Overview of Back to Education Allowance (BTEA) Scheme
  • 4.  Activation scheme aimed at raising education and skill levels of social welfare recipients to help them to progress into employment  Second-chance education opportunities scheme:  Second-level (SLO) and Third-level (TLO)  Full-time courses  Education institutions under remit of DES; DEASP administers the payment  Eligibility criteria:  Qualifying benefit payment (e.g., jobseeker’s, one parent family, etc.)  Duration of qualifying payment (3 /9/12 months)  Age (21/24)  Commencing first year of a course that will lead to a QQI accreditation  Received acceptance onto a qualifying course  Progressing in educational qualifications (some exemptions - Level 5/6 courses)  Weekly payment:  Rate varies according to when course commenced and a person’s means
  • 5. Context to the BTEA Evaluation
  • 6. Between 2007 and 2012, spending on the BTEA scheme more than trebled - from €64.1m to €199.5m; while the number of recipients grew from approximately 6,000 to 25,000 0 50 100 150 200 250 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Thousands(€) BTEA Expenditure 0 5,000 10,000 15,000 20,000 25,000 30,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Number BTEA Recipients Source: Statistical Informationon Social Welfare Services (Department Publications, 1998-2013
  • 7.  This increased expenditure was highlighted in a Departmental review of its Working Age Employment Support programmes in 2012  Using Live Register data for 2011/2012, review found BTEA was not effective in assisting participants to find employment  Review conducted at a time when participants would have faced poor labour market conditions on completion of their course  But 2005 review, which was undertaken at a time when labour market was much more favourable, also found the BTEA to be ineffective  Given the 2005 and 2012 reviews were based on descriptive evidence, DEASP commissioned ESRI to conduct a counterfactual impact evaluation of the BTEA’s effectiveness.
  • 8. Objectives of Evaluation
  • 9. 1. How effective is the BTEA scheme in keeping participants out of unemployment on completion of their course? 2. How effective is the scheme in helping participants to transition into employment on completion of their course? 3. Impact of BTEA in helping participants to pursue another education, training or employment placement programme
  • 10. Results
  • 11. Results - I  Objective of BTEA scheme: raise education and skill levels of social welfare recipients to help them to progress into employment  Evaluation findings: for those that entered the BTEA in Sept/Oct 2008, scheme not effective in achieving this core objective  Participants in both components of the BTEA scheme (SLO and TLO) substantially less likely to be in employment 4 and 6 years following entry into their programme  Conducted various sensitivity checks and the results held firm
  • 12. Exit to Employment June 2012 June 2014 2008 SLO Participants: -38.0*** -29.3*** 2008 TLO Participants: -23.1*** -13.7***
  • 13. Results - II  Some evidence BTEA successful in redirecting participants to further study (education or training)/employment placement course June 2012 June 2014 SLO Overall: 7.4*** 6.9*** TLO Overall: 10.3*** 11.3***
  • 14. Results - II  BUT: 1. Numbers pursuing this path were quite small 2. Also, concern significant proportion of 2008 SLO BTEA programme entrants remaining in education in 2012 and 2014 had not progressed beyond second-level
  • 15. In Education, Training or Employment Placement Course in June 2012 and 2014 2008 SLO Treatment June 2012: In Education, Training or Employment Placement Course: 6.9 Of which: SLO 3.9 TLO * June 2014: In Education, Training or Employment Placement Course: 6.2 Of which: SLO 3.3 TLO *
  • 16. • Majority of SLO BTEA participants undertake PLC courses  maximum duration of courses is two years → finished by 2010 latest • BTEA eligibility criterion “one needs to be progressing in educational qualifications”  Those pursuing a PLC course through BTEA scheme in 2008 should not have been able to undertake a second PLC course on completion of their first  Data seems to suggest that a certain proportion may have been going from one PLC course to the next  Cannot confirm this in the data, but possibility raises concerns about the effectiveness of monitoring arrangements in place for the BTEA scheme at that time, or the degree to which eligibility rules were being enforced • Other research supports this:  Results from PLC evaluation (McGuinness et al., 2018) suggest negative aspects of BTEA are heavily driven by failures in programme monitoring and conditionality; not problems with the quality or nature of the education courses undertaken
  • 17. Conclusions
  • 18. Source: Statistical Informationon Social Welfare Services (Department Publications, 1998-2019) Current Context: 0 50 100 150 200 250 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Thousands(€) BTEA Expenditure 0 5,000 10,000 15,000 20,000 25,000 30,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Number BTEA Recipients
  • 19. Given fall in spending and numbers, are the findings still relevant? • Removing community employment scheme programmes - Community Employment (CE) (€353m), TÚS (€106m), the BTEA scheme is second largest activation programme (€79m) after the Back to Work Enterprise Allowance (€90m) in terms of government expenditure • Largest programme in terms of recipients • Evaluation findings are still relevant:  Continuing to spend a large amount of activation budget on a scheme that does, when last evaluated, not work; and  Channelling a large proportion of jobseekers into a programme that has been found to be ineffective in assisting unemployed people transition back into work
  • 20. What Works? • Job Search Assistance (JSA), combined with increased monitoring and threat and/or imposition of sanctions, tends to be effective (job quality?) • Findings on the effectiveness of training programmes mixed:  Programmes with strong linkages to the labour market are more likely to be effective  Also, high-level specific skills training (not general training)  In general, shorter duration programmes more effective (high-level skills training exception to this)  Wage subsidies found to be effective, but studies do not account for the potential deadweight and displacement effects associated with such schemes • Public sector job creation schemes (e.g., CE, TÚS) not effective  Two biggest Working Age Employment Support programmes (expenditure)
  • 21. 0 3 6 9 12 15 18 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Unemployment rate: currently 5.2% All • Given downward trajectory of the unemployment rate, does this mean we should forget about the unemployed and implementing effective activation programmes? • Rigorous evaluations of Ireland’s programmes needed to identify what works/is not working Finally:
  • 22. Thank You
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