Published by the UK Department for Work and Pensions

This report presents new findings on the implementation and effectiveness of Britain's Employment Retention and Advancement (ERA) demonstration programme, which is being evaluated though a large-scale randomised control trial. 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.

The analysis presented here focuses on the experiences of lone parents within the first two years following their entry onto the programme.

Key Findings

• ERA's implementation, which faced difficulties in the first year of operation, improved considerably over time, as staff grew more skilled in delivering a post-employment intervention.



• Working lone parents in ERA were much more likely than those in the control group to receive retention and advancement-related help or advice from Jobcentre Plus staff.



• Most ERA customers were aware of ERA's financial incentives, although many did not meet the conditions for receiving them.



• Lone parents earned substantially more than they would have without the programme, and New Deal for Lone Parents (NDLP) customers experienced a 24 per cent increase in earnings.



• ERA had positive impacts on earnings, largely because it increased the proportion of lone parents working full time.



• ERA increased the length of time that lone parents worked full time by accelerating entry into such jobs.



• Lone parents on ERA were more likely to combine training or education with employment, and were more likely to take steps to advance in work. However, there is yet little impact of movement into 'better' jobs or an increase in qualifications.

What Is the ERA Demonstration?

ERA builds on Britain's New Deal welfare-to-work programme, operated by Jobcentre Plus, which offers job placement and other pre-employment assistance to out-of-work recipients of benefits. To existing pre-employment New Deal services, ERA adds financial incentives and job advisory services following customers' entry into work. It is aimed at:

• lone parents who receive Income Support (IS) and volunteer for the NDLP programme;



• longer-term unemployed people over the age of 25 who receive Jobseeker's Allowance (JSA) and are mandated to enter the New Deal 25 Plus programme; and



• lone parents who are already working part time (16 to 29 hours a week) and receive Working Tax Credit (WTC).

For the two New Deal customer groups, ERA began with job placement and other pre-employment assistance, largely following the same procedures as the regular New Deal programme. ERA then continued into a unique post-employment phase expected to last for at least two years. ERA's frontline staff, known as Advancement Support Advisers (ASAs), were expected to help customers avoid the pitfalls that can cause new jobs to be short-lived and to help them advance to positions of greater job security and better pay and conditions. ERA also offered cash incentives and other resources, including:

• an employment retention bonus of £400 three times a year for two years for staying in full-time work (at least 30 hours per week for 13 out of every 17 weeks);



• training tuition assistance (up to £1,000) and a bonus (also up to £1,000) for completing training while employed; and



• access to emergency payments to overcome short-term barriers to staying in work.

WTC customers, who were already working when they entered ERA, began immediately to receive in-work support and incentives. 

Qualifying members of the three target groups were invited to volunteer to participate and were assigned randomly to the ERA programme group or to a control group. The control group continued to receive the Jobcentre Plus services they were normally entitled to. WTC control group members, who would not normally enter the New Deal because they were not receiving IS or JSA, were not offered any special services or incentives but could seek other services or training on their own. For all three groups, ERA's success is determined by comparing the programme group's outcomes with the control group's. Any statistically significant difference in these outcomes can be attributed with confidence to ERA.

Intake into the study took place between October 2003 and April 2005. Over 16,000 people were randomly assigned, making this study one of the largest randomised social policy trials ever undertaken in Britain.

The programme was administered by Jobcentre Plus in six regions: East Midlands, London, North East England, North West England, Scotland, and Wales. Although the operational phase of this demonstration project is now over, the evaluation will continue to follow study members' work and benefit outcomes for several more years.

The Department for Work and Pensions managed the overall implementation of ERA and is overseeing the evaluation. The study is being conducted by a research consortium that includes the Policy Studies Institute, the Institute for Fiscal Studies, the Office for National Statistics, and MDRC (a New York City-based research organisation experienced in conducting large-scale random assignment tests of new social policies).

Summary of Research

ERA Implementation

The biggest challenge ERA staff faced was learning how to help working customers meet employment and retention goals while operating within a Jobcentre Plus organisational culture, in which the entry of customers into jobs was the primary measure of staff and office performance. However, ERA's implementation improved considerably over time, as technical assistance, staff training, and DWP's oversight and accountability mechanisms were strengthened. This demonstrates that it is feasible to operate the ERA model of support within Jobcentre Plus.

Retention and Advancement Support

Customers in the ERA group who worked at some point within the two-year follow-up period — about three-quarters of NDLP customers and virtually all the WTC customers — received a substantial post-employment intervention. Large proportions of ERA lone parents received advice and guidance on employment retention and advancement; help with personal problems that could interfere with work; and assistance in accessing training. Significantly, this differed in content and intensity from what they would have experienced in the absence of ERA.

Staff and customers saw value in the use of the Emergency Discretion Fund (EDF) in helping secure attachment to work.

Awareness of Financial Incentives

Most lone parents in ERA were aware of the programme's employment retention bonus (88 per cent), although only around one-third had received a bonus — largely because they did not meet the conditions for the reward. However, among those who worked full time at some point during the follow-up period, around 75 per cent received at least one bonus payment, and roughly 60 per cent received two or more payments.

Awareness of the bonus for completing an ERA-approved training course while employed was also high, especially among WTC customers. Among the WTC group, 87 per cent knew of the bonus, and 23 per cent received a payment. Among the NDLP group, 72 per cent were aware of the bonus, but only eight per cent received a payment. In addition, 27 per cent of the WTC group and ten per cent of the NDLP group received ERA payments to help with training fees or tuition.

Lone Parent Earnings

Lone parents earned substantially more than they would have without the programme. During the two-year follow-up period, NDLP customers in ERA earned £1,550 more, on average, than the control group, which represents a statistically significant increase of 24 per cent over the control group's average earnings of £6,498. The earnings impact was smaller in the second year, but still sizeable and statistically significant. Positive effects were observed across the districts, suggesting that the programme can be effective under a variety of local conditions. ERA also had positive impacts on earnings among WTC customers, raising average earnings for the programme group by £874, a statistically significant gain of five per cent above the control group's average of £16,392 for the two-year follow-up period.

Hours Worked

For the NDLP group, ERA increased the rate of full-time employment to almost 38 per cent — a statistically significant increase of about ten percentage points. Among WTC customers, ERA increased the likelihood of working full time from 30 per cent to 42 per cent, a statistically significant gain of nearly 12 percentage points.

Time Spent in Employment

For NDLP customers, ERA reduced by a month and a half the average amount of time taken to find work. ERA also substantially increased the proportion of customers who worked full time for at least four consecutive months, raising this rate to 34 per cent — a nine percentage point gain. Most NDLP customers who began full-time jobs worked consecutively for at least four months, whether they were in the programme or the control group; thus ERA's effect on sustained full-time employment was achieved by increasing and speeding up entry into such work in the first place, not by prolonging such jobs for people who obtained them. ERA also increased the duration of full-time work among WTC customers, again by increasing and hastening movement into such jobs.

Advancement for Lone Parents

The outcomes for advancement considered in this study focus on particular dimensions of job quality, including: job stability, responsibilities, fringe benefits, customers' own assessments, and employment costs. The evidence shows little effect of ERA on the likelihood of obtaining 'better' jobs, as defined by these categories, within the two-year follow-up period. However, ERA induced some lone parents to take steps that might improve their position in the labour market in the future. In particular, ERA, NDLP customers were more likely to combine training or education with work, showing a six percentage point increase above the control group rate of 30 per cent. Among WTC customers, ERA increased the likelihood of combining training or education with work by 13 percentage points. ERA also had small positive effects on lone parents' efforts to improve their work situation or earnings at their current job, or to look for a new job.

Conclusions

The findings on ERA's two-year effects are broadly positive. NDLP customers in ERA entered work more quickly than their control group counterparts, and ERA increased the likelihood of working 30 or more hours per week and boosted average earnings for both lone parent groups. ERA participants were also more likely to participate in training while employed, which might contribute to additional earnings gains in the longer run. Some of these impacts were fairly large and impressive, especially in light of the limited British and international evidence of effective postemployment strategies. The next phase of the ERA evaluation will enable us to observe the longer-term outcomes for participants, which will allow us to draw clearer conclusions about the effectiveness of the programme.