The net impact of the combination of LPWFI and NDLP on the movements off benefit by eligible lone parents was evaluated. The chief aim of LPWFI was to assist movement into paid employment, with a subsidiary objective of encouraging participation in NDLP. Participation in LPWFI is mandatory for those eligible, while participation in NDLP is voluntary.
The net impact was estimated using propensity score matching methods. A static multiple treatment framework was applied. Only the first programme participation was evaluated out of multiple participations introduced by repeated participation in NDLP and review meetings for LPWFI. Only individuals who were eligible lone parents in the year April 2001/2002 were examined, the first year of the LPWFI programme.
Administrative data records on IS, other benefits, LPWFI and NDLP participation were used, spanning 1998 to May 2004. The analysis excluded Northern Ireland, Jobcentre Plus and LPWFI pathfinder areas, ONE areas, and the Jobcentre Plus delivery areas. New/repeat claimants and existing claimants were analysed separately, reflecting the different programme operation for these two groups, and their different eligibility criteria which translated into different sample constructions and analysis designs. Existing claimants with earlier participation prior to April 2001 were excluded from the analysis.
2.4.1 Participation in NDLP and LPWFI
There was quite a substantial proportion of lone parents who did not start either NDLP or LPWFI. Among new/repeat claimants there were 24 per cent with no participation, 43 per cent with LPWFI only, 29 per cent combining LPWFI with NDLP and three per cent undertaking NDLP only. For existing claimants, 47 per cent did not participate, while 33 per cent had only LPWFI, 15 per cent combined LPWFI and NDLP and five per cent self referred to NDLP.
The greater share of non-participation by existing claimants is partially linked to the observed delayed delivery of the LPWFI programme to the existing claimants. Institutional regulations suggest that there should be LPWFI attendance relatively soon after the date of eligibility. Indeed, for new/repeat claimants the first LPWFI usually occurs relatively early, within a few days after the beginning of the claim. However for the existing claimants, the delay between eligibility and attendance was quite great, with an average wait of 300 days. As a result of this, the analysis period during which the first treatment for new/repeat claimants could take place is 12 months, but 24 months for the existing claimants. This avoids confounding the first treatment with subsequent treatments.
The analysis of socio-economic characteristics revealed that participants in the various programme alternatives had differing characteristics. Among new/repeat claimants, the age of the youngest child differed strongly between alternative
programme participants, and lone parents with older children were more likely not to participate in any LPWFI or NDLP alternatives (these were also the older lone parents). The existing claimants had quite dissimilar characteristics to the new/ repeat claimants, but this largely reflected the different eligibility rules for the existing claimants, and the delay to delivery of LPWFI for the existing claimants. Since only lone parents with a youngest child of at least 13 were eligible, almost no existing claimants were under 30 years and compared to new/repeats a much greater share were over 50 years. Men were least likely to undertake a self-referral to NDLP. Younger existing claimants, with younger children were more likely to self refer to NDLP without undertaking LPWFI. Those existing claimants with youngest child aged 15 were more likely not to participate in LPWFI or NDLP. There were more existing claimants entitled to a disability premium (27 per cent) than among new/ repeat claimants (11 per cent). Those existing claimants with a disability premium were more commonly non-participants or undertook LPWFI only. Those existing claimants in London were more likely not to participate. The study design should eliminate these differences when estimating the impact of the LPWFI and NDLP programmes.
The benefit off-flow and weekly benefit rates differed between programme alternatives, and between new/repeat claimants and existing claimants. Some of this difference can be attributed to the differing socio-economic characteristics, and delayed roll-out for the existing claimants. These findings gave early indications that participation in the various programme alternatives affected benefit terminations. 2.4.2 Impacts on benefit terminations
The validity of the impacts estimated here is restricted to a specific period and group, those eligible during the first year of LPWFI introduction after April 2001.
New/ repeat claimants impacts were observed for up to 18 months after eligibility began with the IS claim start. For new/repeat claimants, the combined effect on benefit exit of LPWFI and NDLP was insignificant in size for the first year, but then positive starting at two and rising to four percentage points at 18 months. The incremental effect on benefit exit of NDLP over LPWFI was quite large, estimated as initially five percentage points but rising to 14 percentage points after one year, and slightly higher at 18 percentage points at 18 months. However, the validity of this estimate is not considered to be very robust and it should be viewed as indicative only, for reasons related to the high chance of subsequent participation by the comparisons. Finally, for new/repeat claimants the impact of participation in LPWFI on the effectiveness of NDLP relative to self referral was positive on benefit exit and rises to nine percentage points after one year, before declining to five percentage points at 18 months.
Existing claimants were observed for up to 18 months after treatment. For existing claimants, the combination of LPWFI and NDLP had an impact on benefit exit rates that varied and was not always positive, but at 18 months was positive and ten percentage points. As for new/repeat claimants, starting NDLP after LPWFI had a
consistently positive and large effect on benefit terminations for existing claimants, of 14 percentage points after one year, rising to 18 percentage points at 18 months. As for new/repeat claimants, the robustness of this estimate is not proven, and it should be viewed qualitatively, with emphasis on the positive direction rather that the estimate size. The incremental effect of LPWFI on NDLP effectiveness on benefit terminations was initially insignificant but then became negative and large for existing claimants. This decrease in the effectiveness of NDLP on benefit terminations may reflect LPWFI introducing participants to NDLP who gain much less than self referrals.
3 Further analysis of NDLP
net impacts for the
August-October 2000
sample
This chapter explores the medium-term (four year) impacts of New Deal for Lone Parents (NDLP) by tracking participants and non-participants from the August- October 2000 eligible NDLP sample, using existing administrative data for NDLP, Income Support (IS) and other benefits data. The pattern of exits and re-entries into IS and other benefits experienced by NDLP participants over time is also explored. Using the matching process to facilitate comparison of NDLP participants and non- participants, the net impacts of NDLP on benefit exit and employment are examined for the sample of NDLP participants that were eligible in August 2000. The net impacts are estimated over the period to August 2004, and so represent medium term outcomes of NDLP for participants. This matching technique was also used in Chapter 2 earlier in this report, however here it is simpler to apply since only one programme alternative exists. Using the matching process, it is possible to estimate the impact the programme had on both the probability of return to benefits and the probability of exit to employment. Section 2.3.2 explains the matching method applied. This estimation technique compares the proportion of NDLP participants who are off benefits in any week with the proportion of non-participants off benefits after first having assured like is compared with like by matching up these two groups. Similarly, an employment effect is found by comparing the proportion of NDLP participants who are in work in any week with the proportion of non- participants who are in work in the same week.
Section B.1 outlined the process by which the raw spell data from several different administrative datasets was merged into a consistent dataset for each individual to described the state they were in during any given week in our time horizon. This data
was also used in a similar fashion in Chapter 2 analyses of the combined impact of NDLP and Lone Parent Work Focused Interview. Section A.1 also provides useful reference material about this data.