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A cost-benefit analysis of the random assignment UK Employment Retention and Advancement Demonstration

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  • David Greenberg
  • Johanna Walter
  • Genevieve Knight

Abstract

This article presents a cost-benefit analysis of Britain's Employment Retention and Advancement (ERA) demonstration, which was evaluated through the first large-scale randomized control trial in the UK. ERA used a combination of job coaching and financial incentives in attempting to help long-term unemployed men and low-income lone parents sustain employment and progress in work once they were employed. Using both administrative and survey data, ERA's effects on benefits and costs were estimated through impact analyses, which exploited the experimental design. The findings indicated that ERA was cost beneficial for long-term unemployed adult men, but not for lone parents. The key findings appear robust to sensitivity tests. Uncertainty, as implied by the SEs of the estimated impacts, was addressed through a Monte Carlo analysis, an approach seldom previously used in cost-benefit analyses of social programs.

Suggested Citation

  • David Greenberg & Johanna Walter & Genevieve Knight, 2013. "A cost-benefit analysis of the random assignment UK Employment Retention and Advancement Demonstration," Applied Economics, Taylor & Francis Journals, vol. 45(31), pages 4335-4354, November.
    • Handle: RePEc:taf:applec:v:45:y:2013:i:31:p:4335-4354
    DOI: 10.1080/00036846.2013.776664
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    References listed on IDEAS

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    1. Grogger, Jeff, 1998. "Market Wages and Youth Crime," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 756-791, October.
    2. Bruno Crépon & Esther Duflo & Marc Gurgand & Roland Rathelot & Philippe Zamora, 2013. "Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(2), pages 531-580.
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