Project leader: Michael White
Sponsors: Employment Service
Period: June 1998-June 2002
Background
The New Deal for Young People (NDYP) is an important part of the Government’s welfare-to-work strategy. The first of the New Deals announced by the new Labour Government, it was rolled out nationally in April 1998 following a four-month trial period in twelve Pathfinder areas. Funded from the windfall tax on utilities, it aims to help young unemployed people into jobs and increase their long-term employability ‘thereby making a positive contribution to sustainable levels of employment’ (Employment Service, 1998). The target group are 18-24 year olds who have been claiming unemployment benefits for six months or more, plus others in the same group with shorter unemployment spells who are deemed special cases worthy of earlier assistance. Participation in the programme is compulsory for the target group, in the sense that failure to participate results in benefit sanctions.
The project has two conceptually distinct aims: (i) to assess the net impact assessment of the effect of NDYP on participants, (ii) to test the impact of NDYP on the youth labour market.
Study Design
Aim (i). The net impact assessment uses secondary data from government administrative databases and from the Labour Force Survey (LFS). The design is based on difference-in-differences estimators with repeat cross-section data. The re-employment rates of the NDYP target group are compared before and after the introduction of the programme, with one or more unemployed groups not affected by NDYP as a control for the effect of general changes in the labour market/economy.
A key problem for this assessment is the possibility that economic and labour market changes affect different age groups to different degrees. The first stage of work is investigating this problem and finding groups and periods where it is at a minimum. Attempts will be made initially to assess the short-term effect, and later to assess the overall medium-term effect.
As an extension to the project, an analogous methodology is also being applied to New Deal for the Long-term Unemployed (national provision).
Aim (ii). NDYP is a sufficiently large programme (if successful) to have a supply performance effect on the youth labour market. Hypotheses about the nature of various supply performance effects have been formulated and several forms of analysis are being carried out to test these. Analyses cover several years and have a differences-in-differences design as above.
Publications
Michael White and Rebecca Riley (2002) Findings from the Macro evaluation of the New Deal for Young People, DWP Report number 168. London: Department for Work and Pensions. Click here for further information. View the press release!