Breaking the low pay, no pay cycle: the effects of the UK Employment Retention and Advancement programme

Richard Hendra,Richard Dorsett,James Riccio,Philip K Robins

doi:10.1186/s40173-015-0042-9

Abstract

Abstract This paper presents the final economic results of the UK Employment Retention and Advancement (ERA) programme. ERA’s distinctive combination of post-employment advisory support and financial incentives was designed to help low-income individuals who entered work sustain employment and advance in the labour market. ERA targeted three groups. ERA produced short-term earnings gains for two lone parent target groups. However, these effects generally faded after the programme ended, largely because the control group caught up with the ERA group. For the New Deal 25 Plus target group (mostly long term unemployed men), ERA produced modest but sustained increases in employment and earnings. JEL Codes: I38, J18, C93

Highlights

1 Introduction This paper presents the final results on the implementation, impacts, costs, and economic benefits of the UK Employment Retention and Advancement (ERA) programme, which sought to improve the labour market prospects of low-paid workers and long-term unemployed people
4.0.0.1 Implementation results Researchers conducted multiple rounds of in-depth qualitative interviews with both staff and programme group members from 2004 through spring 2009. These data form the bulk of the data used for the implementation and process analyses of ERA. Those analyses relied on weekly diaries that Technical Advisers kept from the beginning of random assignment through June 2005, as well as on data collected on site visits and observations they made at various points throughout the course of ERA
The implementation analysis found that ERA was largely implemented as designed, the amount and quality of retention and advancement support offered to participants varied over time and across districts

Summary

Introduction

This paper presents the final results on the implementation, impacts, costs, and economic benefits of the UK Employment Retention and Advancement (ERA) programme, which sought to improve the labour market prospects of low-paid workers and long-term unemployed people. ERA participants could receive at least 2 years of advice and assistance from an employment adviser to help them continue working and advance in work Those who consistently worked full time could receive substantial cash rewards, called ‘retention bonuses’. Many become entrenched in a ‘low-pay, no-pay’ cycle in which they shift repeatedly between low-wage work and unemployment. Often these individuals seek government benefits to supplement their incomes. In the wake of the great recession, concerns have mounted about prospects for the long term unemployed (Elsby et al 2010)

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