Impacts and Costs and Benefits of the Future Jobs Fund

The Future Jobs Fund (FJF) was introduced in October 2009 to support the creation of subsidised jobs for unemployed young people who were at a.
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Impacts and Costs and Benefits of the Future Jobs Fund

November 2012

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Acknowledgements Special thanks go to Dr Helen Bewley at the National Institute of Economic and Social Research (NIESR) for her peer review of the drafts of the impact analysis. NIESR's review was confined to the methodology of the impact analysis; NIESR did not have access to the actual data used and did not attempt to replicate the results, or review the cost-benefit analysis (which was quality assured internally). Thanks also to Stuart Prince and James Halse who contributed to the execution of the impact analysis, and Mike Daly, Rhys Cockerell and Paul Trenell who contributed drafting improvements.

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Contents 1 1.1

INTRODUCTION ......................................................................................6 Rationale for the present analysis...........................................................................................7

1.2 Policy Background of the Future Jobs Fund .........................................................................8 1.2.1 Termination of the Future Jobs Fund .................................................................................... 9 1.2.2 Design of the Future Jobs Fund............................................................................................. 9 1.3

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Participation in the Future Jobs Fund ...................................................................................9

DATA AND SAMPLE DEFINITION........................................................ 13

2.1 Sample definitions ..................................................................................................................13 2.1.1 Defining the FJF participant sample.................................................................................... 13 2.1.2 Defining the non-participant sample ................................................................................... 14 2.2 Data sources and variables ....................................................................................................15 2.2.1 Description of Variables...................................................................................................... 17 2.2.2 Data quality issues............................................................................................................... 19 2.3 Descriptive Statistics ..............................................................................................................22 2.3.1 Comparing FJF participants with non-participants.............................................................. 23 2.4

Duration of FJF jobs..............................................................................................................24

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Comparing benefit rates of participants and non-participants..........................................25

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METHODOLOGY ................................................................................... 27

3.1 Conditional Independence Assumption................................................................................27 3.1.1 Controlling for selection bias .............................................................................................. 28 3.2 Propensity Score Matching ...................................................................................................30 3.2.1 Common Support for Participants ....................................................................................... 31 3.2.2 Matching Quality................................................................................................................. 32 3.3

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Measuring Outcomes and Impacts .......................................................................................35

RESULTS ............................................................................................... 38