Active Labour Market Policy for Lone Parents: the UK Context

1. Active Labour Market Policy for Lone Parents: the UK Context Jonathan Portes Chief Economist UK Department for Work and Pensions

2. Our overall labour market strategy.. • Macroeconomic stability • Labour market flexibility • Anti discrimination law and policy • Making work pay • Active labour market policy

3. 200000 180000 160000 140000 120000 100000 80000 60000 40000 20000 0 Loss Gain of less than £45 Gain of less than £50 Gain of less than £55 Gain of less than £60 Gain of less than £65 Gain of less than £70 Gain of less than £80 Gain of less than £85 Gain of less than £90 Gain of less than £95 Gain of less than £40 Gain of less than £10 Gain of less than £15 Gain of less than £20 Gain of less than £25 Gain of less than £30 Gain of less than £35 Gain of more than £75 Gain of less than £125 Gain of less than £130 Gain of less than £135 Gain of less than £140 Gain of less than £115 Gain of less than £120 Gain of less than £100 Gain of less than £105 Gain of less than £110 No change or gain of less than £5 Making work pay: tax credits and the minimum wage Gains to work for lone parents (30 hours, minimum wage)

4. But system is complex and MDRs high

5. 70% Note: between 1992 lone mothers (pre-1992), lone parents (post-1992) and 1996 the data has 65% not been regrossed to take into account the results of the 2001 census. 60% 55% 50% 45% 40% 35% 30% 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Considerable success..

6. 75% Lone parent employment rate 70% 65% 60% 55% 50% 45% 40% Spring 04 Spring 05 Spring 06 Spring 07 Spring 08 spring 09 spring10 Business Case Current Performance Trajectory required for 70% by 2010 But much more will be required

7. New Deal for Lone Parents Programme structure: • Mandatory work focused interviews to “sell” the programme • But programme participation purely voluntary • Open to all lone parents on benefit • Help with access to childcare, jobsearch, training; but still workfirst approach • Piloting further elements: in work credit, worksearch premium, more childcare support

8. Implications for evaluation • Voluntary nature raises selection issues • But correlation between take-up and outcomes suggests it’s not the usual problem • And is NDLP really a “programme” – or is it about information/signposting? • Suggests that how and by whom at least as important as what • If key role of NDLP is catalytic, how do we isolate effects?

9. Key future issues • Explaining heterogeneous outcomes: geography, health status, ethnicity, etc • New Deal for Lone Parents Plus: evaluating a package of interventions • Quasi-mandatory work-related activity