Hostname: page-component-848d4c4894-2pzkn Total loading time: 0 Render date: 2024-05-17T17:15:27.469Z Has data issue: false hasContentIssue false
  • English
  • Français

Time-Limited in-Work Benefits in the UK: A Review of Recent Evidence

Published online by Cambridge University Press:  26 March 2020

Haroon Chowdry
Haroon Chowdry*
Affiliation:
Institute for Fiscal Studies
*
1 E-mail: h.chowdry@ifs.org.uk
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper reviews three UK-based welfare-to-work programmes featuring time-limited financial incentives to leave out-of-work benefits for employment. The policies considered are (i) the Employment Retention and Advancement demonstration, aimed at lone parents and the long-term unemployed; (ii) In-Work Credit, aimed at lone parents on welfare; (iii) Pathways to Work, aimed at recipients of incapacity benefits. I illustrate the difficulties in extrapolating from specific findings to general policy-relevant conclusions. Finally, I depict the challenge facing evaluators in future and point to the directions in which evaluation will need to develop if it is to contribute more fully to policy-relevant evaluation.

Keywords

Programme evaluationcost-benefit analysiswelfare policylone parentspovertyunemploymentincentivesrandomisationC21H21H53I38J22J68
Type
Research Articles
Information
National Institute Economic Review , Volume 219 , January 2012 , pp. R53 - R64
Copyright
Copyright © 2012 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

Support from the ESRC Centre for Microeconomic Analysis of Public Policy at the Institute for Fiscal Studies is gratefully acknowledged. The author is grateful to Mike Brewer and anonymous referees for comments and suggestions, and to colleagues at the IFS whose joint work is cited in this paper. All inaccuracies or errors that remain are the author's responsibility. Any views articulated in this article are those of the author, not the IFS.

JEL Classifications: C21; H21; H53; I38; J22; J68

References

Adam, S., Bozio, A., Emmerson, C. (2009), ‘Can we estimate the impact of the Choices package in Pathways to Work?’, DWP Working Paper No. 60.Google Scholar
Adam, S., Bozio, A., Emmerson, C., Greenberg, D., Knight, G. (2008), A Cost-Benefit Analysis of Pathways to Work for New and Repeat Incapacity Benefit Claimants, DWP Research Report No. 498.Google Scholar
Bewley, H., Dorsett, R., Haile, G. (2007), The Impact of Pathways to Work, DWP Research Report No. 435.Google Scholar
Bewley, H., Dorsett, R., Ratto, M. (2008a), Evidence on the Effect of Pathways to Work on Existing Claimants, DWP Research Report No. 488.Google Scholar
Bewley, H., Dorsett, R., Salis, S. (2008b), The Impact of Pathways on Benefit Receipt in the Expansion Areas, DWP Research Report No. 552.Google Scholar
Bewley, H., Dorsett, R., Salis, S. (2009), The Impact of Pathways to Work on Work, Earnings and Self-reported Health in the April 2006 Expansion Areas, DWP Research Report No. 601.Google Scholar
Brewer, M. (2009), ‘How do income-support systems in the UK affect labour force participation?’, IFAU Working Paper 2009:27, Uppsala: Institute for Labour Market Policy Evaluation.Google Scholar
Brewer, M., Browne, J., Chowdry, H., Crawford, C. (2009), The Lone Parent Pilots after 24 — 36 months: The Final Impact Assessment of In-Work Credit, Work Search Premium, Extended Schools Childcare, Quarterly Work Focused Interviews and New Deal Plus for Lone Parents, DWP Research Report No. 606.Google Scholar
Brewer, M., Browne, J., Crawford, C., Knight, G. (2007), The Lone Parent Pilots after 12 to 24 months: An Impact Assessment of In-Work Credit, Work Search Premium, Extended Schools Childcare, Quarterly Work Focused Interviews and New Deal Plus for Lone Parents, DWP Research Report No. 415.Google Scholar
Brewer, M., Duncan, A., Shephard, A., Suárez, M. J. (2006), ‘Did Working Families' Tax Credit work? The impact of in-work support on labour supply in Great Britain’, Labour Economics, 13, 6, pp. 699–720.CrossRefGoogle Scholar
Brewer, M., Saez, E., Shephard, A. (2010), ‘Means-testing and tax rates on earnings’, in Mirrlees, J., Adam, S., Besley, T., Blundell, R., Bond, S., Chote, R., Gammie, M., Johnson, P., Myles, G. and Poterba, J. (ed (eds), Dimensions of Tax Design: the Mirrlees Review, Oxford, Oxford University Press.Google Scholar
Card, D., Robins, P.K. (1996), ‘Do financial incentives encourage welfare recipients to work? Evidence from a randomized evaluation of the self-sufficiency project’, Working Paper No. 5701, Cambridge, MA, National Bureau of Economic Research.CrossRefGoogle Scholar
Cebulla, A., Flore, G., Greenberg, D. (2008), The New Deal for Lone Parents, Lone Parent Work Focused Interviews and Working Families' Tax Credit: A Review of Impacts, DWP Research Report No. 484.Google Scholar
Chowdry, H., Sianesi, B. (2011), ‘Non-participation in the Employment Retention and Advancement Study: implications for the experimental fourth-year impact estimates’, DWP Working Paper No. 96.Google Scholar
Dearden, L., Emmerson, C., Frayne, C., Meghir, C. (2009), ‘Conditional cash transfers and school dropout rates’, Journal of Human Resources, 44, 4, pp. 827–57.CrossRefGoogle Scholar
Dehejia, R., Wahba, S. (1999), ‘Causal effects in nonexperimental studies: reevaluating the evaluation of training programs’, Journal of the American Statistical Association, 94, 448, pp. 1053–62.CrossRefGoogle Scholar
Dorsett, R. (2008), Pathways to Work for New and Repeat Incapacity Benefits Claimants: Evaluation Synthesis Report, DWP Research Report No. 525.Google Scholar
Friedlander, D., Robins, P. (1995), ‘Evaluating program evaluations: new evidence on commonly used nonexperimental methods’, American Economic Review, 85, 4, pp. 923–37.Google Scholar
Grogger, J., Karoly, L.A. (2005), Welfare Reform: Effects of a Decade of Change, Cambridge, MA, Harvard University Press.CrossRefGoogle Scholar
Grogger, J., Karoly, L. A., Klerman, J. A. (2002), Consequences of Welfare Reform: A Research Synthesis, DRU-2676-DHHS, Santa Monica, CA, RAND.CrossRefGoogle Scholar
Haskins, R., Sawhill, I., Weaver, K. (2001), Welfare Reform: An Overview of Effects to Date, Policy Briefing No. 1, January 2001, Washington, DC, Brookings Institution.Google Scholar
Heckman, J.J., Hotz, V. J. (1989), ‘Choosing among alternative nonexperimental methods for estimating the impact of social programs: the case of manpower training’, Journal of the American Statistical Association, 84, 408, pp. 862–74.Google Scholar
Heckman, J.J., Smith, J.A. (1995), ‘Assessing the case for social experiments’, Journal of Economic Perspectives, 9, 2, pp. 85–110.CrossRefGoogle Scholar
Hendra, R., Riccio, J.A., Dorsett, R., Greenberg, D.H., Knight, G., Phillips, J., Robins, P.K., Vegeris, S., Walter, J., Hill, A., Ray, K., Smith, J. (2011), Breaking the Low-Pay, No-Pay Cycle: Final Evidence from the UK Employment Retention and Advancement (ERA) demonstration, DWP Research Report No. 765.Google Scholar
Horowitz, J.L., Manski, C.F. (2000), ‘Nonparametric analysis of randomized experiments with missing covariate and outcome data’, Journal of the American Statistical Association, 95, 449, pp. 77–84.CrossRefGoogle Scholar
Jowell, R. (2003), Trying It Out: The Role of ‘Pilots’ in Policy-Making, Government Chief Social Researcher's Office.Google Scholar
Kluve, J., Card, D., Fertig, M., Góra, M., Jacobi, L., Jensen, P., Leetmaa, R., Nima, L., Patacchini, E., Schaffner, S., Schmidt, C. M., van der Klaauw, B., and Weber, A. (2007), Active Labor Market Policy in Europe: Performance and Perspectives, Berlin et al., Springer.CrossRefGoogle Scholar
LaLonde, R. (1986), ‘Evaluating the econometric evaluations of training programs with experimental data’, American Economic Review, 76, 4, pp. 604–20.Google Scholar
Lee, D. (2009), ‘Training, wages, and sample selection: estimating sharp bounds on treatment effects’, Review of Economic Studies, 76, 3, pp. 1071–102.CrossRefGoogle Scholar
Lise, J., Seitz, S., Smith, J. (2004), ‘Equilibrium policy experiments and the evaluation of social programs’, Working Paper No. 10283, Cambridge, MA, National Bureau of Economic Research.CrossRefGoogle Scholar
Michalopoulos, C., Robins, P.K., Card, D. (2005), ‘When financial work incentives pay for themselves: evidence from a randomized social experiment for welfare recipients’, Journal of Public Economics, 89, 1, pp. 5–29.CrossRefGoogle Scholar
Michalopoulos, C., Tattrie, D., Miller, C., Robins, P.K., Morris, P., Gyarmati, D., Redcross, C., Foley, K., Ford, R. (2002), Making Work Pay: Final Report on the Self-Sufficiency Project for Long-Term Welfare Recipients, Ottawa, Social Research Demonstration Corporation.Google Scholar
Ray, K., Vegeris, S., Brooks, S., Campbell-Barr, V., Hoggart, L., Mackinnon, K., Shutes, I. (2007), The Lone Parents Pilots: A qualitative evaluation of Quarterly Work Focused Interviews (12+), Work Search Premium and In Work Credit, DWP Research Report No. 423.Google Scholar
Riley, R., Bewley, H., Kirby, S., Rincon-Aznar, A., George, A. (2011), The Introduction of Jobcentre Plus: An Evaluation of Labour Market Impacts, DWP Research Report No. 781.Google Scholar
Sianesi, S. (2011), Employment Retention and Advancement (ERA) Demonstration: The Impact on Workers' Outcomes, DWP Research Report No. 759.Google Scholar