Mandating full New Deal participation for the over- 50s: an experimental analysis Richard Dorsett & Stefan Speckesser, Policy Studies Institute Commissioned by Department for Work and Pensions

Overview  Background  Evaluation design  Interim results  Interpretation and generalisability  Conclusion

Background

New Deal 25 plus (ND25+)  ND25+ is a mandatory programme for individuals aged 25+ who have been claiming JSA for 18 months.  ND25+ has three elements:  Gateway  Intensive Activity Period (IAP)  Follow-through.  For those aged 50+, IAP is voluntary. Many choose not to volunteer so in 2002 government announced intention to pilot IAP mandate

ONS population estimates

Evaluation design

 Those eligible randomly assigned to action group (mandatory IAP) or control (voluntary IAP) group  Randomisation takes place at start of Gateway - effect possible from that point on  Adviser collects background information then telephones DWP who assign. Customer informed immediately  Randomisation ran from:  5 Apr 2004 – 31 Mar 2006 in 11 areas  10 Jan 2005 – 30 Jun 2006 in 3 (ERA) areas.  Identify effect of mandate rather than IAP itself Experiment

Data

 Track outcomes using administrative data  2,305 participants randomised up to 24 June 2005  Merge with New Deal Evaluation Database (NDED) 1.87 (3.7%) not found in NDED 2.28 (1.2%) appear to start ND25+ after RA (6.0%) participants excluded as duration on Gateway longer than 28 days before RA  Result: 2,061 participants (89%)

Interim results

Regression results - exits to employment

Regression results - exits to non-JSA benefit

Duration analysis: predicted effects on status after 1 year (% point differences)

Interpretation and generalisability

 substantial number of eligibles excluded  substantial number of ineligibles included  Considerable variation across JC+ districts  Does this matter? Perhaps it replicates how policy would operate when rolled out nationally. 1. Are the right people randomised?

2. Is randomisation on time?  Experiment does not replicate how programme would operate when rolled out nationally  This does matter – do not observe full effect of mandate

3. Are pilot areas representative?  Compositional differences between pilot and non-pilot areas - eg ethnicity, age, length of benefit claim  Treatment differences between pilot areas (action and control groups) and non-pilot areas  those in pilot areas take 3 weeks longer until IAP  treatment offered under IAP differs across pilot and non-pilot areas

 Early results appear encouraging but important to note that these are preliminary.  Need to observe individuals beyond first ND25+ exit – final report will use more complete data.  Some deviations from programme design – highlights the importance of monitoring  Some issues relating to generalisability of the results need careful thought:  identification of eligible customers  timing of randomisation of eligible individuals  pilot representativeness Conclusion

Interim report available from: rports /rrep362.pdf