1 / 33

Impact assessment of the lone parent pilots

Impact assessment of the lone parent pilots. Project team: IFS: Mike Brewer, James Browne, Claire Crawford & Lorraine Dearden. PSI: Genevieve Knight. Main findings & outline of talk. Participation after 12 months of pilots, 6% of eligible LPs received IWC

barton
Download Presentation

Impact assessment of the lone parent pilots

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Impact assessment of the lone parent pilots Project team: IFS: Mike Brewer, James Browne, Claire Crawford & Lorraine Dearden. PSI: Genevieve Knight

  2. Main findings & outline of talk • Participation • after 12 months of pilots, 6% of eligible LPs received IWC • But participation still rising in Phase 1 areas after 20 months, so impact may grow • Impact • Small impacts on moves off benefit and into work, particularly for lone parents recently on NDLP • Rest of talk • Methods & data • What might we expect? • Results • Concluding thoughts • All based on DWP Research Report 415 (http://www.dwp.gov.uk/asd/asd5/rports2007-2008/rrep415.pdf).

  3. What are we trying to achieve? • Estimate impact of “lone parent pilots” on labour market outcomes of lone parents previously on IS • Use administrative data • benefit receipt from DWP, employment spells from HMRC (WPLS) • Evaluation will tell us “how much”, not “why”

  4. Why use time-limited in-work benefits? • Wage growth (Connolly & Gottshalk, 2006; Walker and Lydon, 2005) • One-off costs of starting work? • Very high discount rate? • Habits? • Related policies: • SSP (Canada). Reduced welfare claims, increased employment, increased earnings, increased income BUT no long-run effects (Card and Hyslop, 2005; Connolly and Gottshalk, 2002) • UK experience: “Employment credit” for older workers; ERA & Pathways to Work pilots

  5. Work and Pensions Longitudinal Study (WPLS) • Administrative data-set combining • DWP: all benefit claims and participation in NDs from June 1999 • HMRC: data from all P45/P46s (filled in when employers start/stop paying someone) • Matched on NINO plus name, DOB, gender, postcode • Personal information: age, gender, ethnicity and postcode • but can merge other characteristics from other DWP databases. • Outcomes • Which benefits/programmes • Whether in “work” • Doesn’t tell us earnings (yet), hours worked, or hourly wage

  6. WPLS: problems with “work” measure • Lots of noise • Some entries correspond receipt of taxable state benefit • Multiple entries for (apparent) same job • Multiple entries with same start date, different end date • Jobs where start or end known approximately (year, but not day) • Jobs where only end-date known • Jobs at times inconsistent with benefit receipt • Need not include jobs paying < tax threshold • Tax threshold: £91. Min wage * 16 hours: £72 (April 2004). • Does not capture self-employment nor informal employment (but neither would be eligible for IWC)

  7. What outcomes are we measuring, and for whom? • Measure impact on all eligible for IWC • Future work will measure impact on job retention for IWC recipients • Divide eligible lone parents into “stock” and “flow” • Stock: eligible for IWC when pilot starts (large sample) • Flow: become eligible after pilot starts (more interesting in long-run) • Outcomes measured in WPLS for people in WPLS (!) • “whether off IS/JSA/IB X days after first potentially eligible for IWC” • “whether in work X days after first potentially eligible for IWC” • Benefit outcomes until 31/3/06, work outcomes until 30/9/05 • “Work” measure in WPLS based on employers telling HMRC when they start/stop paying an employee • Lots of noise • Does not capture informal employment • Need not include jobs paying < tax threshold (16 hours @ min wage)

  8. Method • “Difference-in-differences” • Compare outcomes in LPP areas with other areas after LPPs started • Compare outcomes in LPP areas with other areas before LPPs started • Attribute any differences to LPP • No sensible control group within the pilot areas • People without children on JSA ? • So use lone parents in all other parts of England as “control areas”, and estimate impact with difference in differences • Don’t identify matched control areas (Blundell et al (2005)) • [Differences between pilot and control areas]

  9. Empirical specification • Outcomes: • off benefit / in work X days after eligibility. • Explanatory variables • History of benefit receipt and work (30 months before eligibility) • Whether claimed disability benefit, JSA, or been on NDLP in 30 months before eligibility, entitlement to IS (at start of claim) • Personal characteristics (when first eligible) • Age, number of children, age of youngest children, ethnicity, gender, month first eligible. • Area characteristics (based on postcode when first eligible) • Indicators for JC+ district, supply of formal childcare (ward, 2003/4), unemployment (TTWA, 2002/3), deprivation quintile (SOA, 2002/3), qualifications of non-working lone parents (SOA, 2001), employment rate (SOA, 2001), % of lone parents who are owner-occupiers (SOA, 2001) • No time trend, but indicators for month • Linear probability model (ie OLS on binary outcome) • Estimate impact • Across all districts (flow only; for stock, separate regression for each phase) • For each phase • For each district • By individual characteristics

  10. In Work Credit: detail • Gradual roll-out: Phase 1 (Apr 2004): Bradford, N London, SE London Phase 2 (Oct 2004): Leicestershire, Dudley and Sandwell, W London, Lancashire W, Staffs, Leeds (+ Cardiff & Edinburgh) Phase 3 (Apr 2005): Brent, City & E London, S London, Lambeth Phase 4 (Oct 2005): Surrey, Sussex, Essex, Kent, Hampshire, IoW, Berks, Bucks, Beds, Herts (not covered) • Five districts also have extra spending for “personal advisers” (ND+fLP) • Affects around a third of LPs • All of London and south-east in pilot areas. Argh!

  11. Timeline and sample

  12. Sample size: how many are potentially eligible? First eligible after pilot started Eligible on day pilot started

  13. Typical profile: flow Off benefit In work

  14. Typical profile: stock Off benefit In work

  15. Typical profile: lessons • Eligible population is prone to long spells on benefit • After 12 months, 15-20% of flow (10-15% of stock) are off benefit • “Work” measure looks too high, but changes are more plausible. • After 12 months, 5-10 ppt more are in work • Pilot areas have worse outcomes than control areas, particularly Phases 1 & 3 (London)

  16. Corrected, 25/10/06 Take-up (1): ever received IWC as % ever potentially eligible Numerator: DWP financial data (stops Nov 2005). Denominator: WPLS

  17. Take-up (2): new IWC claims as % of benefit exits and % of job starts Numerator: DWP financial data. Denominator: WPLS

  18. Results: flow Control Off benefit after 9 months Phase 1 Phase 2 Phase 3 Differences Date first (potentially) eligible to LPPs

  19. Results: flow Bold and italicised means statistically different from zero

  20. Results: stock (phase 1) Off benefit Days since eligibility to LPPs

  21. Results: stock (phase 2) Off benefit Days since eligibility to programme

  22. Results: stock (phase 3) Off benefit Days since eligibility to programme

  23. Results: stock Bold and italicised means statistically different from zero

  24. Impact by subgroups • Number of children, gender • No consistent pattern & few significant differences • Age of youngest child • Weak (statistically insignificant) evidence that response greater where youngest child age 3 or more • Recent participation in NDLP • Evidence that impact greater for LPs who have recently been on NDLP, but estimate not consistent/stable across districts • By district • Considerable variation • IWC vs ND+fLP areas • Evidence that ND+fLP areas have WORSE outcomes

  25. Results: flow, by age of youngest child Off benefit after 9 months (Results similar amongst stock)

  26. District-level impacts: flow Sig diff from 0 Average (not sig diff from 0) Sig diff from 0

  27. District-level impacts: flow Sig diff from 0 Average IWC (sig diff from 0) Average ND+fLP Sig diff from 0

  28. District-level impacts: stock Sig diff from 0 Average

  29. District-level impacts: stock Sig diff from 0 Average IWC (sig diff from 0) Average ND+fLP

  30. Impact by recent NDLP participation Off benefit after 273/364 days Sig diff from 0 “Recent” = On NDLP 6-12 months before eligible to LPP “Past” = On NDLP 13-30 months before eligible to LPP

  31. Summary of results • Impact • Small impacts on flows off benefit, particularly for lone parents recently on NDLP, and easier to detect in stock sample than flow • Participation • After 12 months, 6% of LPs have received IWC • But participation still rising after 20 months, so impact may grow • Why impact so small? • Either LPs don’t hear about IWC, or they aren’t responding to it yet • Is 0-2 ppts small? Level without treatment is 15-20%

  32. Problems/extensions • “Common trends” • So far, estimated many unrelated regressions • What gain would there be from estimating a duration model with time-varying treatment? • Pilot and control areas are different • Matched difference-in-differences (Blundell et al NDYP) • Not yet used data on receipt of IWC • Joint model of NDLP & IWC & flows off benefit • Impact on retention • Technical report due early 2008, future reports on more data late 2008 & 2010.

  33. End

More Related