Association for Public Policy Analysis & Management

This paper evaluates the UK Private Sector Led Pathways to Work program, which aimed to return incapacity benefits (disability) claimants to work. It contained more tailored assistance to Incapacity (disability) Benefits claimants to move into paid work and off benefit; Work Focussed interview with specialist advisers; Work services and ‘Choices’ package (NDDP, Programme Centre etc) health management services, and RTWC a financial incentive to return to work.

All new and repeat claimants to incapacity benefits were required to participate in the mandatory elements of Pathways. DWP used outcomes-based contracts for provider organisations. The research design is based on a difference-in-difference approach, Heckman and Hotz (1987). Areas which did not have PL Pathways were used as comparison areas, providing the counterfactual to describe the outcome of not undergoing PL Pathways (pilot and expansion phase 1 Jobcentre Plus Pathways areas). Matching was undertaken amongst these comparison areas to select appropriate individual comparison areas for each of the PL Pathways areas, to minimise the potential confounding issue of comparing local areas which had very different local labour market and other socio-demographic characteristics and improve the quality of the comparison group in reflecting what would have happened if PL Pathways did not occur. The identified matched areas were used for the survey fieldwork and also to construct the comparison group in the administrative data. The study used carefully designed surveys to inform the impact analyses, as well as the DWP administrative data on benefits and HMRC data on employment records. The impacts were estimated for those aged 18-59, for new or repeat Incapacity Benefit claimants eligible for PL Pathways from April-June 2008. The impact study used the proportion off benefits and the proportion in employment using survey and HMRC data as outcomes. The follow-up period reported on was 6 months after starting a claim that made a person eligible.

Using administrative data on benefit histories and the difference in differences identification strategy, we find the program modestly reduced benefit receipt 6 months after starting a claim that made a person eligible. A unique feature of the evaluation is that impact estimates are developed from three separate data sources – administrative program records, telephone surveys of participants, and government benefit and tax records. Thus, the paper not only identifies the impacts of the program, it also enables us to see how some outcome data and estimated impacts vary by source of data. The design also produces the impact of the privately delivered services relative to the state services.