Work experience works
New research by NIESR/DWP shows the positive effect of the government's work experience programme.
The DWP has finished its examination of the work experience programme which caused so much trouble two months ago, and it reports that it has a small but definite positive effect. Jonathan Portes of NIESR, who peer-reviewed the study, writes:
The impacts are not huge: 16 weeks after starting the programme, 46 percent of participants are off benefit, compared to 40 percent of comparable non-participants; 35 percent are recorded as being in employment, compared to 27 percent of non-participants (the figures for employment are probably somewhat less reliable, for data reasons). However, the impact is very clearly positive, and given that the programme is relatively cheap, it is almost certainly a worthwhile investment.
The fact that the actual impact of the programme is much smaller than implied by Ministers' claims at the time – but at the same time that it is clearly a good and cost-effective programme – should lead to a greater sense of perspective about the impact of policies. Most social programmes don't help everyone who participates – either because their outcomes remain poor despite the programme, or because they would have had a good outcome anyway.
The efficacy of the program is encouraging, but it is just one of the avenues of attack which the government's various back-to-work schemes – collectively dubbed "workfare" – have been subject to.
The strongest opposition was engendered by the compulsory nature of many of the programmes. Although the work experience programme specifically was always supposed to be voluntary, evidence came to light that letters referring participants to the scheme were worded in a way that strongly implied that non-participation would be punished. In addition, the scheme sanctioned participants who pulled out after the first week.
After meeting with employers who took part in the programme, the DWP reported that all the compulsory elements would be dropped.
The question which remains to be answered, however, is whether the work experience programme makes sense as a macro-initiative. As Chris Dillow pointed out last month, many misguided government policies can be traced back to the same error:
A minister at the DWP has said that there is a "lack of an appetite for some. . . jobs that are available." Let’s grant – heroically – that this is the case, and that she gets her way and the unemployed step up their job search. Some will find work. But in doing so, they’ll merely get those jobs at the expense of other job-seekers; remember, there are around six unemployed for every vacancy. More intensive job search is rational for an individual - it increases their chances of getting work - but it isn’t aggregatively beneficial, as it merely increases others’ frustration...
What we have here, then, is an example of behaviour that is individually sensible but collectively self-defeating.
[This] advice thus represents a form of the fallacy of composition. [She] fails to see that what’s rational for an individual might not benefit all individuals.
This aspect of the work experience programme is one we have yet to see. If the work experience programme isn't creating jobs – and it is hard to see how it could be – then all it is doing is moving vacancies from one set of unemployed people to another at taxpayer's expense. While the programme may work on an individual level, it may still not be something that the government should be doing nationwide.