In 2011, the UK Department for Work and Pensions (DWP) introduced the work experience program (WE) to help young unemployed people get valuable work-based skills and the practical experience they need to secure a job. The program consisted of a two to eight week placement with a local employer in a range of sectors, including retail, construction, administration, hospitality, and information technology.
This research report by Ruth Haigh and Joseph Woods explores the impact of work experience participation on subsequent benefits-receipt and employment outcomes for three young (19-24 years old) cohorts of participants (2011, 2012 and 2013 recipients of the Jobseeker’s Allowance or JSA) who were tracked for up to three years. Outcomes for those who started a placement are compared with a matched comparison group of non-participants to provide an estimate of the impact of participation. This matching approach was used to account for self-selection bias introduced by the voluntary nature of labour market programs.
The authors also included a cost-benefit analysis from the perspective of participants, employers, the government, and society. In this analysis, programs impacts included: the increased costs of designing and administering the program; the increased output and wages of participants in subsidized employment; and the reduction in operational, benefits and healthcare costs and the increased income taxes owing to more people being in subsidized employment.
One set of findings from the research concerns implementation. The majority (69 per cent) of completed work experience placements lasted for at least four weeks. There is evidence that participants who had spent more time out of work prior to starting a work experience placement were more likely to see a longer placement through to completion. A large majority (82 per cent) said they felt positive about their overall experience on the scheme, and 90% felt that the placement arranged for them was suitable. Participants generally felt that they were treated like valued members of staff while on placement, that they had learned new skills and that the placements were well-organized. However, a third agreed that they did not like ‘working for free’.
With respect to outcomes, this study supports prior evidence that taking part in work experience reduces the time young participants spend receiving benefits and increases the time they spend in employment. It also provides new evidence to suggest that this impact is sustained for at least two years following participation. In the two years following a work experience start, the researchers estimated that participants spend on average 10 days less on benefit and 47 days longer in employment based on the 2012 cohort results.
The researchers also found that the measured increase in the time that work experience participants subsequently spent in employment was consistently much larger than the corresponding reduction in time spent on benefit. This suggests that some of those who moved into work as a result of participating in work experience would have left benefit anyway, but to a destination other than work. Subgroup analysis showed that work experience was more effective at reducing subsequent time spent on benefit and increasing time spent in employment for older participants (aged 22–24) than for younger ones (aged 19–21).
The results from the cost-benefit analysis suggest that work experience programs offer a net benefit to government (£150 per participant), to society (£1,050), and to each participant (£1,9507). There was no net cost to employers.
This study provides program designers and practitioners with some insight into the benefit of work experience interventions on the long-term employment outcomes of unemployed youth.