Employment and Disability Institute www.edi.cornell.edu

Employment and Disability Policy Initiatives in the U.K.: Results and Lessons for the U.S.

A Public Policy Forum

November 8, 2007

Cornell University Government Affairs OfficeHall of States, Room 333444 North Capitol Street, N.W.Washington, DC 20001

Rehabilitation Research and Training Center on Employment Policy for

Persons with Disabilities

Funded by the U.S. Department of Education National Institute on Disability and Rehabilitation

Research (Grant Number H133B040013)

Collaborating Partners

• Employment and Disability Institute ILR School, Ithaca, NY

• Dept. of Policy Analysis and Management College of Human Ecology, Ithaca, New York

• Mathematica Policy Research, Inc.Princeton, NJ, Washington, DC, and Cambridge, MA

• American Association of People with DisabilitiesWashington, DC

• Rutgers University, School of Management and Labor Relations, Program for Disability Research

New Brunswick, NJ

Upcoming Policy Forums• Date & Location TBD - Winter 2008Review of the Final Report from the Ticket to Work Panel

Speakers & Moderators to be determined

• Date & Location TBD - Winter/Spring 2008Older Workers Who Experience Disability Onset

Speakers & Moderators to be determined

• Date & Location TBD - Spring 2008Youth Focused Panel

Speakers & Moderators to be determined

• Date & Location TBD - Summer 2008Employment Policy Options for Improving Services and EmploymentOutcomes for Returning Veterans with Disabilities from Iraq andAfghanistan

Speakers & Moderators to be determined

Welcome & Introductions• Susanne Bruyerè, Director, Cornell University – Employment

and Disability Institute

Moderator• Stephen Bell, Abt Associates

Panel• Michael Daly, Department of Work and Pensions, U.K.

• Richard Dorsett, Policy Studies Institute, U.K.

• Susan Purdon, National Center for Social Research, U.K.

• Bruce Stafford, University of Nottingham, U.K.

Discussant• David Stapleton, Ph.D., Mathematica Policy Research Inc.

Disability Employment Programmes

UK evaluations

Mathematica Policy ForumWashington, D.C. November 8th 2007

Mike Daly,

UK Department of Work and Pensions

Why did we fund these studies?

• Government commitment to evidence-based policy making

• Reinforced by challenging high level targets:– Eliminate child poverty– Increase employment rate to 80%– Narrow the employment rate gaps

• Places the focus on outcomes, not inputs

Why disability particularly? (not necessarily in this order)

• Social reasons as reflected by:– Disability Discrimination Act 1995– ‘Improving life chances of disabled people’ report by

Prime Minister’s Strategy Unit 2005 –goal of equality for disabled people by 2025

• Financial – 2.7m on incapacity benefits at cost of >£12bn

• Broader economic reasons – aim to increase employment rate to 80% to keep dependency ratio under control

Why these particular studies?

• Job Retention and Rehabilitation: belief that early intervention is important, but no evidence of what works

• New Deal: first attempt at a large scale intervention designed specifically to help disabled people

• Pathways: first serious attempt to introduce an element of compulsion, backed by high quality services, with aim of making a substantive impact on benefit/employment rates

Re-engineering incapacity benefits: the effects of the Pathways to Work reforms

Richard DorsettPolicy Studies Institute, London

Policy Forum 8 November 2007Washington D.C.

Incapacity benefits in the UK

• Incapacity Benefit (IB) – for those with sufficient earnings history

• Income Support (IS)– for those with insufficient earnings history

• Personal Capability Assessment (PCA)– Medical test of eligibility – Points system assessing physical & mental health– 20-25% exempted due to nature of condition– Takes from 2 weeks to 5 months to complete– Appeals often succeed (about 50% in quarter ending March 06)

Comparisons with the US

• Similarities– Some parallels between IB/IS and SSDI/SSI

– With USA and Canada, PCA is among the most stringent tests of disability

• Differences– Benefits paid while awaiting PCA outcome

– NHS provides universal health care

– PCA does not require individual be incapable of work

The growth in incapacity benefits

What Pathways to Work offers

• Early focused intervention– Series of work focused interviews for most claimants– Accelerated PCA and focus on capability

• Specialist support– NDDP: help into work, support in work (for 6 mths)– CMP: help managing disability/illness

• Clearer incentives– RTWC: £40 per week for a year 16+ hr job <£15k

Evaluation approach

• Piloted in number of areas - focus on April 2004 areas

• Evaluation data:– Surveys of individuals at start of claim process and 1½ years

later– Full population of claimants from administrative records– Data available pre/post Pathways and in pilot/comparison areas

• Effect evaluated by difference-in-differences

Six-month IB off-flow rates - administrative data

20%

25%

30%

35%

40%

45%

50%

Ap

r-0

1

Jul-0

1

Oct

-01

Jan

-02

Ap

r-0

2

Jul-0

2

Oct

-02

Jan

-03

Ap

r-0

3

Jul-0

3

Oct

-03

Jan

-04

Ap

r-0

4

Jul-0

4

Oct

-04

Jan

-05

Ap

r-0

5

Jul-0

5

Oct

-05

Jan

-06

Time of benefit start

Pe

rce

nta

ge

Pathways phase 1

Pathways phase 2

National (excl. Pathways)

Source: House of Commons Work and Pensions Select Committee Report (2006).

October2003

April2004

Impacts 1½ years after benefit enquiry– survey data, April 2004 areas

Impact

(pp) P-value

(%) Base

N

In paid work, any hours 7.4* 9 29.7 3,291 Monthly net earnings (£) 33.28 40 252.61 3,291 Receiving incapacity benefits -1.7 72 51.1 3,212 Health problem affects day-to-day activity -4 27 86.1 3,177 Health problem affects day-to-day activity "a great deal" -10.8** 2 49.8 3,124

Monthly employment - counterfactuals & impacts, with CIs

-10

-5

0

5

10

15

20

25

30

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Months since incapacity benefits enquiry

% (

cou

nte

rfac

tual

); p

p (

imp

act)

Employment impacts, survey data

IB receipt - counterfactuals & impacts on non-receipt, with CIs

0

2

4

6

8

10

12

14

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Months since start of claim

imp

act,

pp

0

10

20

30

40

50

60

70

80

90

100

cou

nte

rfac

tual

, %

Benefit impacts, administrative data

Concluding comments

• First mandatory active labour market programme for sick and disabled people in Britain

• Embraces the idea of health benefits of work• Broadly welcomed by disability interest groups• Sustained rise in employment but not reduction in benefit –

2016 target (1m off IB) unlikely by Pathways alone• Positive health effects

Reminders when generalising to the USA…• Benefit population includes those who will not pass PCA• Medicaid and Medicare alter the incentive structure relative to

the UK

Stopping Job Loss Following Onset: the

JRRP trial

Susan Purdon

The design of JRRP

Randomised controlled trial with four randomisation groups

Aimed at those off work sick for 6-26 weeks

Main objective: successful return to work for 13+ weeks

Participation: voluntary; self-nominating

Four randomisation groups: health intervention; workplace intervention; combined intervention; control

Ran from April 03 to April 05

The three interventions

Health: Physiotherapy; referral to specialists; complementary therapy

Workplace: Ergonomic assessment; employer liaison/mediation.

Combined: CBT; any of above. (Best practice).

Numbers taking part

2845 (711 per group)

Not all those randomised to an intervention received an intervention (health 78%; workplace 55%; combined 77%)

Not all those randomised were interviewed (health 587; workplace 545; combined 571; control 458)

Costs

Spend per client over 6month period

Health £1,098

Workplace £972

Combined £2,125

Control £0

Findings

% returning to work for 13 weeks

Health 43.5

Workplace 45.1

Combined 44.4

Control 44.7

Findings: those off work because of injury (n=96/group)

% returning to work for 13 weeks

Health 49.0

Workplace 60.1

Combined 56.8

Control 36.0

Findings: those off work with mental health problem (n=211/group)

% returning to work for 13 weeks

Health 46.1

Workplace 46.4

Combined 49.5

Control 58.7

Findings: depression (HAD scores)

% with score8-10

% with score11+

Health 19.5 22.0

Workplace 19.3 23.9

Combined 20.2 21.7

Control 25.4 23.3

Possible explanations

Interventions offered not always seem as appropriate by clients

Service providers did not always encourage clients to be proactive and to initiate contact

For mental health group, some evidence that control group found new jobs

Supporting Moves into Work Once on Benefit: Implementation

Challenges and Impact Results from the National Extension of

NDDP

Bruce StaffordInternational Centre for Public and Social Policy

Key findings

NDDP ‘worked’:

• Reduced benefit receipt and increased employment

• A positive net social benefit

Notwithstanding implementation issues:

• Funding and contractual regime

• Institutional arrangements

New Deal for Disabled People (NDDP)

Piloted in 1998, nationally extended July 2001

Designed to help people claiming incapacity-related benefits secure sustainable employment

Voluntary program

Delivered by around 60 Job Brokers – private, public and voluntary organisations under contract to Department for Work and Pensions (DWP)

Outcome related funding

The evaluation

NDDP Evaluation Database

Documentary Analysis and Survey of J ob Brokers

Survey of the Eligible Population

Qualitative Research with Participants, Knowledgeable Non-Participants, J ob Broker Staff and J obcentre Plus Staff

Survey of Registrants

Qualitative Research with Employers

Impact Analysis

Cost Benefit Analysis Survey of Employers

Implementation issues

Area differences in take-up rates

Funding / contract regime & resources:

• Increased focus on those closer to work

• Responses to funding ‘gap’

Role of communication & information giving:

• Job Brokers and Jobcentre Plus

• Participants’ having an informed choice

Outcomes and Impacts

-0.18

-0.16

-0.14

-0.12

-0.10

-0.08

-0.06

-0.04

-0.02

0.00

1 3 5 7 9 11 13 15 17 19 21 23

Months Since Registration

Impa

ct o

n Re

ceip

t Rat

e

More recent claimants Longer-term claimants

Impacts on benefit receipt and employment over 24 months

0%

2%

4%

6%

8%

10%

12%

14%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Months Since Registration

Impa

ct o

n E

mpl

oym

ent R

ate

More recent claimants Longer-term claimants

Impacts

Longer-term recipients

More recent recipients

I ncapacity-benefit receipt (percentage point reduction)

At month 24 (Early cohort) 16 13 At month 36 (Maximum follow-up cohort) 18 11 October changes (at month 6) Pre-October (Early cohort) 8 10 Post-October (Late cohort) 15 19 I ncapacity-benefit amount (£ reduction) At month 24 (Early cohort) £81 £51 At month 36 (Maximum follow-up cohort) £83 £35 October changes (at month 6) Pre-October (Early cohort) £52 £31 Post-October (Late cohort) £83 £69 Employment (Percentage point increase) At month 24 (Early cohort) 11 7 At month 36 (Maximum follow-up cohort) 11 8 October changes (at month 6) Pre-October (Early cohort) 7 4 Post-October (Late cohort) 9 4

CBA

Longer-term recipients

More recent recipients

Government perspective Benefits £4,272 £2,114 Costs Lower-Bound estimates £1,457 £1,098 Upper-Bound estimates £1,705 £1,346 Actual government expenditures £1,715 £1,356 Net Benefits Based on the lower-bound costs £2,815 £1,016 Based on the upper-bound costs £2,567 £768 Based on actual government costs £2,557 £758 Participants’ perspective Benefits £4,027 £1,707 Costs £3,679 £1,862 Net Benefits £348 -£155 Societal perspective Benefits £3,970 £1,666 Costs Based on the lower-bound costs £807 £805 Based on the upper-bound costs £1,055 £1,053 Net Social Benefits Based on the lower-bound costs £3,163 £861 Based on the upper-bound costs £2,915 £613

Conclusions and lessons

Jobcentre Plus had key role in success of NDDP

• Signposting people

• Mandatory work-focused interviews

Outcome related funding:

• Economics of scale – small/local providers

• Equity – those further from the labour market

Is a role for NDDP-type services for client group

Bruce StaffordInternational Centre for Public and Social PolicySchool of Sociology and Social PolicyThe University of NottinghamUniversity ParkNottinghamNG7 2RD

Tel: 0115 846 7439Email: Bruce.Stafford@Nottingham.ac.ukhttp://www.nottingham.ac.uk/sociology/research/Int_Ctre_for_Public_and_Social_Policy.php

Upcoming Policy Forums• Date & Location TBD - Winter 2008Review of the Final Report from the Ticket to Work Panel

Speakers & Moderators to be determined

• Date & Location TBD - Winter/Spring 2008Older Workers Who Experience Disability Onset

Speakers & Moderators to be determined

• Date & Location TBD - Spring 2008Youth Focused Panel

Speakers & Moderators to be determined

• Date & Location TBD - Summer 2008Employment Policy Options for Improving Services and EmploymentOutcomes for Returning Veterans with Disabilities from Iraq andAfghanistan

Speakers & Moderators to be determined