15 March 2015

Sanctions help jobseekers into work? (Contrary evidence)

I wrote recently about the debate over the effectiveness of sanction as a tool to get the unemployed to try harder and get jobs. The DWP had come up with a load of evidence that it is effective although that evidence is non-UK and old enough to be from a different employment climate. I've asked for more recent research based on UK data but in the meantime I've found some myself. It comes from Howard Reed of Landman Economics and is published by Oxfam.

HOW EFFECTIVE ARE BENEFIT SANCTIONS? An investigation into the effectiveness of the post-2012 sanctions regime for Jobseeker's Allowance claimants uses a technique similar to that used Boockmann to analyse data from Germany during 2006-7. Sanction rates vary from place to place - as I have shown myself - so this should be reflected in re-employment rates. Boockmann used this to show that sanctions helped people into work but Reed found "The results show no evidence that Jobcentre Plus districts with higher rates of sanctions between October 2012 and June 2014 experienced greater decreases in unemployment or increases in employment than districts where sanctions were used less often" and goes on to say "Overall, this report finds that sanctions are an ineffective tool for improving labour market performance."

A slight weakness in this paper is that it appears to accept the geographic variation in sanction rates as essentially random. There's some work by David Webster showing that sanction rates tend to be higher in areas of high unemployment. Perhaps staff are keen to encourage jobseekers to try harder in jobs deserts? Somewhat futile!

A further related post is here

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