Background to the Research

• After six months of unemployment and claiming JSA, young people between the ages of 18 and 24 years must enter the ND18-24 scheme. Entry is usually at a 'Gateway' stage - this involves one to one advice and assistance with job searching.
• If participants are still unemployed after four months on Gateway, they must join one of four options - subsidised employment, full-time education and training, the environmental taskforce or voluntary sector work.
• Of the 34,671 ND18-24 cases in NI, two thirds have been male and one third female. Around half end in (mostly sustained) employment.
• Little quantitative analysis of the effects of ND18-24 on employment and unemployment has been published in NI. Research in GB suggest that it has boosted the chances of employment for young people by 5-40% (effects have been more positively identified for males than for females).
  

Research Approach

• This research looked at the effects of ND18-24 on the probability of young people leaving unemployment (the JSA register) after different lengths of time. To do this, it estimated graphs of 'hazard functions'. Hazard functions show this probability before and after the introduction of ND18-24. Exits from unemployment to (i) employment, (ii) education and training, (iii) other benefits or (iv) unidentified destinations, are looked at in separate hazard functions graphs.
• Hazard functions are also used for the 25-29 age group to estimate what would have happened to the 18-24 age group if ND18-24 had not been introduced.
• The sample was randomly picked from the unemployment register for 16-30 year olds in NI. The data spanned from January 1995 to July 2001, containing the details of 86,965 unemployments spells. 20% of this was used.
  

Main Findings

• This analysis suggests that ND18-24 increased the chances for males to exit unemployment to employment by around 40%, over six to twelve month durations of unemployment. There is little effect at durations shorter than six months. This is broadly in line with figures in GB.
• For females, the hazard rate (probability) for leaving unemployment to employment has increased by around 20%, again primarily over unemployment spells of six to twelve months. This is a stronger effect than existing GB estimates. However, there is a small negative effect on the probability of females exiting to employment after short unemployment durations, suggesting that females wait for entry onto ND 18-24 rather than take the first available job offer on entering unemployment.
• The probability of exiting unemployment to education and training increased by a factor of 300% (after an unemployment period longer than six months). This was the same for both males and females. However, the actual probability of this remains small. Again, a small negative effect of ND 18-24 was observed on exits to education and training at short unemployment durations, suggesting that some people wait to enter ND18-24 than take the first available education or training place.
• Since the introduction of ND18-24, the probability of leaving the JSA register to other benefits has increased by 100% after six months of unemployment. This applies to both genders. There is no significant effect during the earlier months. Again, the actual probability of this exit remains small.
• The probability of exits to unknown destinations has also increased since the introduction of ND18-24, by a factor of about 70%, at unemployment durations of between six and twelve months. It is likely that some of these exits are to employment, although not recorded as such.
• Putting the probabilities together, the chances for young males to remain unemployed after one year have dropped by 45-50% since ND18-24 began. For females, this figure is 40-45%.
• ND18-24 guidelines state that very few people in the 18-24 age group should be unemployed for longer than ten months. Evidence suggests that the guidelines are not being strictly implemented, and in particular, the Gateway stage of the ND18-24 scheme often lasts longer than four months.
• JSA, introduced in NI in October 1996, has had a large positive effect on the probability of exits from unemployment to employment for both genders, but has had a small negative effect on exits to education and training.

Recommendations

• The merging of the New Deal database held by DEL and the JSA register database held by the Department of Enterprise, Trade and Investment, for research purposes.
• To use this merged database for a full evaluation of ND18-24 and its effects on inflows to unemployment.
• A full evaluation should deal with three areas;
  • what happens to young people that have passed through ND18-24 in the longer term, i.e. beyond their first destination on leaving the programme;
  • to compare the effects of ND 18-24 in NI with those in other regions of the UK;
  • to investigate the the implementation of ND18-24, and the causes and consequences of flexibility within its implementation for young people in NI.