Title
Contents
Acknowledgements 13
The Authors 14
Glossary of terms 15
Abbreviations 17
Key findings 19
Summary 23
1. Introduction 36
2. Aims of the research and methodology 39
2.1 The policies that comprise the lone parent pilots 39
2.2 The population of interest, what outcome variables will be investigated and what might be expected to happen 40
2.2.1 The population of interest 40
2.2.2 Outcome variables: what impacts does this report investigate? 41
2.2.3 What might be expected to happen? 41
2.3 Empirical methods 42
3. Descriptive analysis of In-Work Credit recipients 44
3.1 Participation in (or take-up of) IWC 44
3.2 How long did IWC recipients stay on IWC and what did they do next? 48
3.2.1 Duration of IWC claims 48
3.2.2 What IWC recipients did next 49
3.3 Characteristics of IWC recipients compared with other IS claimants 57
3.4 Summary 65
4. The overall impact of the lone parent pilots on potentially eligible lone parents in the flow sample 67
4.1 DiD estimates: overall impact of the LPPs on potentially eligible lone parents in the flow sample 68
4.1.1 The headline results 68
4.1.2 Variation between phases and between different cohorts of lone parents 72
4.2 Robustness checks 75
4.2.1 Testing the 'common trends' assumption 75
4.2.2 Trend variants 76
4.2.3 Allowing for treatment effects on lone parents who are not yet potentially eligible for IWC 77
4.3 Duration model estimates: overall impact of the LPPs on potentially eligible lone parents in the flow sample 80
4.4 Summary: overall impact of the LPPs on potentially eligible lone parents in the flow sample 82
5. The overall impact of the lone parent pilots on potentially eligible lone parents in the stock sample 85
5.1 DiD estimates: overall impact of the LPPs on potentially eligible lone parents in the stock sample 87
5.2 Duration model estimates: overall impact of the LPPs on potentially eligible lone parents in the stock sample 90
5.3 Summary: overall impact of the LPPs on potentially eligible lone parents in the stock sample 91
6. Variation in the overall impact of the lone parent pilots on potentially eligible lone parents 93
6.1 Flow sample: variation in the overall impact of the LPPs on potentially eligible lone parents 96
6.2 Stock sample: variation in the overall impact of the LPPs on potentially eligible lone parents 101
6.3 Summary: variation in the overall impact of the LPPs on potentially eligible lone parents 110
7. Why is the estimated impact of the lone parent pilots higher than in previous work? 113
8. The impact of the lone parent pilots on job retention 118
8.1 DiD estimates: impact of the LPPs on job retention 119
8.2 Duration model estimates: impact of the LPPs on keeping lone parents off IS 122
8.3 Conclusions 124
9. Impact of the lone parent pilots on IWC recipients, the headcount impact of the LPPs, and estimates of deadweight 126
9.1 The impact of the LPPs on IWC recipients 127
9.2 The headcount impact of the LPPs 130
9.3 Summary 133
10. Summary and conclusions 135
10.1 Summary of results 136
10.1.1 Take-up of IWC 136
10.1.2 Characteristics of IWC recipients 136
10.1.3 Durations of IWC claims and post-IWC destinations 136
10.1.4 Flow sample: difference-in-differences estimates of the impact of the lone parent pilots (headline results) 137
10.1.5 Stock sample: difference-in-differences estimates of the impact of the lone parent pilots 139
10.1.6 Variation across phases, cohorts and combinations of policies 139
10.1.7 Summary of key results 140
10.1.8 Disentangling the impact of the LPPs: did they encourage more lone parents to leave benefit for work or encourage those that did leave to stay in work and off benefit for longer? 141
10.1.9 Apparent impacts of the LPPs on lone parents who are not yet eligible for IWC 142
10.1.10 Deadweight 143
10.1.11 How do the estimated impacts compare with those of other Department for Work and Pensions programmes for lone parents? 143
10.1.12 What has changed since DWP Research Report 415? 144
10.2 Implications for policy and research 145
10.2.1 What more can be learned about the impact of the LPPs from a duration model? 145
10.2.2 Implications for policy 145
Appendix A. Details of the policies offered in the lone parent pilots 147
Appendix B. Constructing a dataset for analysis using the DWP and HMRC administrative data 154
Appendix C. Cleaning the DWP and HMRC administrative data 158
Appendix D. Explanatory variables used in multivariate analysis 162
Appendix E. The difference-in-differences estimator of the additional impact of the lone parent pilots 173
Appendix F. Using a duration model to estimate the impact of the lone parent pilots 182
Appendix G. Supplementary analysis of IWC recipients 205
Appendix H. Average (mean) outcomes and sample sizes for difference-in-differences analysis 217
Appendix I. Testing for pre-programme 'common trends' 224
Appendix J. Difference-in-differences estimates of the impact of the lone parent pilots by phase and by cohort, flow sample 233
Appendix K. Robustness checks: trend variants 241
Appendix L. Robustness checks: anticipation effects 249
References 256
Table 1. Summary of impacts of the lone parent pilots 31
Table 3.1 Length of IWC claim, by phase 49
Table 3.2 Summary of the destinations of lone-parent IS leavers 50
Table 3.3 Characteristics of IS leavers compared to IS stayers in pilot districts 59
Table 3.4 Characteristics of IS leavers after 12 months compared to before 12 months in pilot districts 60
Table 3.5 Characteristics of pilot compared to comparison district leavers 61
Table 3.6 Characteristics of IWC recipients compared to non-IWC recipients 63
Table 3.7 Characteristics of long-claim IWC claimants compared to short-claim IWC claimants 64
Table 4.1 Estimated impact of the LPP on potentially eligible lone parents in the flow sample: all phases and all cohorts 69
Table 4.2 Estimated impact of the LPPs on lone parents who are not yet potentially eligible: variant flow sample, all phases and all cohorts 78
Table 5.1 Estimated impact of the LPPs on potentially eligible lone parents in the stock sample, by phase 88
Table 6.1 Variants of estimated impact of the LPPs on number of potentially eligible lone parents off benefit in the flow sample 97
Table 6.2 Variants of estimated impact of the LPPs on number of potentially eligible lone parents in work in the flow sample 100
Table 6.3 Estimated impact of the LPPs for potentially eligible lone parents subject to ESQWFIs on benefit and work outcomes in Phases 1 and 2 of the stock sample 102
Table 6.4 Estimated impact of the LPPs for potentially eligible lone parents in ND+fLP districts on benefit and work outcomes in Phase 2 of the stock sample 104
Table 6.5 Estimated impact of the LPPs for potentially eligible lone parents previously on NDLP on benefit outcomes: stock sample 106
Table 6.6 Estimated impact of the LPPs for potentially eligible lone parents previously on NDLP on work outcomes: stock sample 108
Table 7.1 Estimated impact of the LPPs on percentage off benefit for potentially eligible lone parents in the stock sample 115
Table 7.2 Estimated impact of the LPPs on percentage off benefit for potentially eligible lone parents in the flow sample 116
Table 7.3 Estimated impact of the LPPs on percentage in work for potentially eligible lone parents in the stock sample 116
Table 7.4 Estimated impact of the LPPs on percentage in work for potentially eligible lone parents in the flow sample 117
Table 8.1 Estimated impact of the LPPs on lone parents who left IS for work: all phases and all cohorts 121
Table 8.2 Estimated impact of the LPPs on job retention as percentage of the estimated overall impact of the LPPs on all potentially eligible lone parents, by phase 122
Table 9.1 Headcount impact of the LPPs and estimated deadweight on benefit outcomes amongst potentially eligible lone parents in the flow sample, by phase 130
Table 9.2 Headcount impact of the LPPs and estimated deadweight on work outcomes amongst potentially eligible lone parents in the flow sample, by phase 131
Table 9.3 Headcount impact of the LPPs and estimated deadweight on benefit outcomes amongst potentially eligible lone parents in the stock sample, by phase 131
Table 9.4 Headcount impact of the LPPs and estimated deadweight on work outcomes amongst potentially eligible lone parents in the stock sample, by phase 132
Table 9.5 Headcount impact of the LPPs on lone parents who left IS for work amongst potentially eligible lone parents in the flow and stock sample: benefit and work outcomes 132
Table 10.1 Summary of impacts of the lone parent pilots 141
Table A.1 Summary of the programmes and the eligible population 151
Table A.2 Spatial and temporal overlap of the lone parent pilots 152
Table D.1 Flow and stock samples, all potentially eligible lone parents 163
Table D.2 Sample who left IS for work 170
Table F.1 Transitions onto and off IS by lone parents 187
Table F.2 Coefficient estimates for the transition from receiving IS to work of 16 or more hours and the transition from receiving IS to work of fewer than 16 hours: baseline model 188
Table F.3 Coefficient estimates for the transition from not receiving IS to receiving IS: baseline model 190
Table F.4 Coefficient estimates for the transition from receiving IS to work of 16 or more hours and the transition from receiving IS to work of fewer than 16 hours: model with anticipation effects 192
Table F.5 Coefficient estimates for the transition from not receiving IS to receiving IS: model with anticipation effects 194
Table F.6 Coefficient estimates for the transition from receiving IS to work of 16 or more hours and the transition from receiving IS to work of fewer than 16 hours: model with time-varying area effects 196
Table F.7 Coefficient estimates for the transition from not receiving IS to receiving IS: model with time-varying area effects 198
Table G.1 IWC starts, by phase and month 206
Table G.2 Percentage of IS claims with an employment spell starting within some period of the end date 210
Table H.1 Average level of benefit outcomes pre-policy: flow sample 217
Table H.2 Average level of benefit outcomes post-policy: flow sample 218
Table H.3 Average level of work outcomes pre-policy: flow sample 218
Table H.4 Average level of work outcomes post-policy: flow sample 218
Table H.5 Sample sizes, flow sample (benefit and work outcomes), pre-policy 219
Table H.6 Sample sizes, flow sample (benefit and work outcomes), post-policy 219
Table H.7 Average level of benefit outcomes pre-policy: stock sample 219
Table H.8 Average level of benefit outcomes post-policy: stock sample 220
Table H.9 Average level of work outcomes pre-policy: stock sample 220
Table H.10 Average level of work outcomes post-policy: stock sample 221
Table H.11 Average level of benefit outcomes for IS leavers pre-policy: flow sample 221
Table H.12 Average level of work outcomes for IS leavers pre-policy: flow sample 222
Table H.13 Average level of benefit outcomes for IS leavers post-policy: flow sample 222
Table H.14 Average level of work outcomes for IS leavers post-policy: flow sample 223
Table I.1 Impacts on unaffected lone parents, flow sample, by phase and cohort, 12 months after becoming potentially eligible, common unrestricted trend (ppts) 231
Table I.2 Impacts on unaffected lone parents, flow sample, by phase and cohort, 18 months after becoming potentially eligible, common unrestricted trend (ppts) 232
Table J.1 Estimated impact of the LPPs, flow sample, by phase, all cohorts, common unrestricted trend ppts 235
Table J.2 Estimated impact of the LPPs, flow sample, by phase and cohort, 12 months after becoming potentially eligible, common unrestricted trend (ppts) 237
Table J.3 Estimated impact of the LPPs, flow sample, by phase and cohort, 24 months after becoming potentially eligible, common unrestricted trend (ppts) 238
Table J.4 Estimated impact of the LPPs on lone parents who leave IS for work, all cohorts, by phase, common unrestricted trend (ppts) 240
Table K.1 Estimated impact of the LPPs, flow sample, all phases and all cohorts, trend variants (ppts) 243
Table K.2 Estimated impact of the LPPs, flow sample, Phase 1, all cohorts, trend variants (ppts) 244
Table K.3 Estimated impact of the LPPs, flow sample, Phase 2, all cohorts, trend variants (ppts) 245
Table K.4 Estimated impact of the LPPs, flow sample, Phase 3, all cohorts, trend variants (ppts) 246
Table K.5 Estimated impact of the LPPs, flow sample, Phase 4, all cohorts, trend variants (ppts) 247
Table L.1 Estimated impact of the LPPs on lone parents who are not yet potentially eligible, variant flow sample, all phases, all cohorts, common unrestricted trend (ppts) 251
Table L.2 Estimated impact of the LPPs on number of lone parents off benefit or in work with and without anticipation effects, based on lone parents who are not yet potentially eligible, variant flow sample, all phases, all cohorts, common unrestricted trends 253
Table L.3 Estimated impact of the LPPs, variant flow sample but conditional on being on IS for at least 12 months (with no changes in circumstances), all phases, all cohorts, common unrestricted trend (ppts) 255
Figure 1. Percentage of potentially eligible lone parents in the flow sample who are off benefit and in work, and estimated percentage off benefit and in work in the absence of the LPPs 28
Figure 3.1 Participation measure (i): recipients of IWC as percentage of all lone parents ever potentially eligible, by phase and month since LPPs started (up to 31 March 2007) 46
Figure 3.2 Participation measure (ii): new recipients of IWC as percentage of IS off-flows from potentially eligible lone parents, by phase and month (up to 31 March 2007) 47
Figure 3.3 Lone parents who leave IS: proportion on benefit over time 52
Figure 3.4 Lone parents who leave IS: proportion in work over time 53
Figure 3.5 Lone parents who leave IS after claiming for at least 12 months: proportion on benefit over time 54
Figure 3.6 Lone parents who leave IS after claiming for at least 12 months: proportion in work over time 55
Figure 3.7 IWC recipients: proportion on benefit over time 56
Figure 3.8 IWC recipients: proportion in work over time 57
Figure 4.1 Fractions of potentially eligible lone parents in the flow sample who are off benefit and in work, and estimated fractions off benefit and in work in the absence of the LPPs 70
Figure 4.2 Estimated impact of the LPPs on potentially eligible lone parents in the flow sample 71
Figure 4.3 Estimated impact of the LPPs on percentage off benefit: potentially eligible lone parents in the flow sample, all cohorts, by phase (ppts) 73
Figure 4.4 Estimated impact of the LPPs on percentage in work: potentially eligible lone parents in the flow sample, all cohorts, by phase (ppts) 74
Figure 4.5 Simulated effect of the LPPs on proportion of lone parents off benefit: flow sample 81
Figure 5.1 Fractions of potentially eligible lone parents in the stock sample who are off benefit and in work, and estimated fractions off benefit and in work in the absence of the LPPs 89
Figure 5.2 Simulated effect of the LPPs on proportion of lone parents off benefit: stock sample 90
Figure 8.1 Decomposing the additional impact of the LPPs on IWC recipients 123
Figure 9.1 Simulated impact of the LPPs for IWC recipients, and deadweight 128
Figure 10.1 Percentage of potentially eligible lone parents in the flow sample who are off benefit and in work, and estimated percentage off benefit and in work in the absence of the LPPs 138
Figure F.1 Complete model of all work and benefit transitions 183
Figure F.2 Simulated outcomes for IWC recipients in the absence of the LPPs 202
Figure F.3 Impact of IWC on proportion of potentially eligible lone parents off benefit in different models 203
Figure G.1 Take-up measure (i): recipients of IWC as percentage of all lone parents in stock sample, by phase and month since LPPs started (up to 31 March 2007) 208
Figure G.2 Take-up measure (i): recipients of IWC as a percentage of all lone parents in flow sample, by phase and month since first eligible for IWC (up to 31 March 2007) 209
Figure G.3 Benefit outcomes for lone parent IS leavers whose IS claim was less than 12 months old on the day the pilots were introduced 211
Figure G.4 Work outcomes for lone parent IS leavers whose IS claim was less than 12 months old on the day the pilots were introduced 212
Figure G.5 Benefit outcomes for lone parent IS leavers whose IS claim lasts at least 12 months, but was less than 12 months old on the day the pilots were introduced 213
Figure G.6 Work outcomes for lone parent IS leavers whose IS claim lasts at least 12 months, but was less than 12 months old on the day the pilots were introduced 214
Figure G.7 Benefit outcomes for IWC recipients whose IS claim was less than 12 months old on the day the pilots were introduced 215
Figure G.8 Work outcomes for IWC recipients whose IS claim was less than 12 months old on the day the pilots were introduced 216
Figure I.1 Trend in comparison districts, and differences between that and pilot phases: benefit outcomes 12 months after becoming potentially eligible 226
Figure I.2 Trend in comparison districts, and differences between that and pilot phases: benefit outcomes 24 months after becoming potentially eligible 227
Figure I.3 Trend in comparison districts, and differences between that and pilot phases: work outcomes 12 months after becoming potentially eligible 228
Figure I.4 Trend in comparison districts, and differences between that and pilot phases: work outcomes 24 months after becoming potentially eligible 229
Boxes
Box 3.1: Why have estimates of the IWC participation/take-up rates changed since RR 415? 48
Box 4.1: Technical information about the DiD analysis on the flow sample 68
Box 5.1: Technical information about the DiD analysis on the stock sample 86
Box 6.1: Estimating the variation in the overall impact of the LPPs: detail 94
Box 8.1: Constructing the samples for the DiD estimates of the impact of the LPPs on job retention 119
Box 9.1: Calculating and interpreting deadweight 127
Box E.1: DiD estimators 175