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NIESR research published recently finds that the introduction of Jobcentre Plus improved the functioning of the British labour market, increasing the rate of job-matching for benefit claimants of working age and reducing benefit dependency. These improvements are evident for jobseekers, lone parents claiming Income Support and people claiming disability-related social security benefits.

The roll-out of Jobcentre Plus, at a cost of £1.9 billion, involved a major overhaul of the infrastructure used to deliver public employment and benefit services in Britain. The main change was to bring the Employment Service and Benefits Agency under one roof, providing an integrated and work-focused service for all people of working age seeking social security benefits and involving a significant rationalisation of estates. This organisational restructuring was accompanied by a significant modernisation of service delivery including:

• office refurbishments,

• modernised IT systems,

• performance targets prioritising those furthest away from the labour market,

• and enhanced job-brokering.

Changes in service delivery were particularly significant for claimants of disability related benefits. Before Jobcentre Plus there was no explicit work-focus associated with benefit delivery for these claimants in most areas of Britain. This changed with the introduction of mandatory work-focused-interviews for this group.

The report, "The introduction of Jobcentre Plus: An evaluation of labour market impacts", by Rebecca Riley, Helen Bewley, Simon Kirby, Ana Rincón-Aznar and Anitha George, exploits the staged roll-out of Jobcentre Plus across Britain to identify its impacts on the labour market. The report finds that, following a period of initial disruption to the public employment service, the introduction of Jobcentre Plus is estimated to have:

• raised the probability of leaving benefit and finding work amongst people claiming Jobseeker's Allowance by just under one percentage point every quarter;

• raised the probability of leaving benefit and finding work amongst lone parents claiming Income Support by around 0.2 percentage points every quarter (equivalent to a rise in the quarterly exit rate to work of 4.5 per cent for this group);

• and raised the probability of leaving benefit amongst people claiming disability related benefits by around 0.1 percentage points every quarter (equivalent to a rise in the quarterly exit rate off benefit of 2.5 per cent for this group).

An increase in the rate at which claimants leave benefit is found for most subgroups analysed. However, older short-term claimants of disability related benefits appear less likely to leave benefits following the introduction of Jobcentre Plus.

These impacts are small, but the longer term effects are significant. If sustained the impact is to reduce the benefit stock by around 65 thousand, matched by an equivalent rise in employment. Using NiGEM, the National Institute's macroeconomic model, to illustrate the effects of these labour market changes on the wider economy the authors estimate that the introduction of Jobcentre Plus resulted in:

• a steady-state increase in GDP of approximately 0.1%;

• a steady-state improvement in the fiscal position of about 0.1% of GDP;

• a cumulative net saving to the Exchequer of about £5.5 billion over the period 2001-2015.

The report will be published on 1 December 2011 and will be freely available at:

http://research.dwp.gov.uk/asd/asd5/rrs-index.asp

The authors of the report on the labour market impacts of the introduction of Jobcentre Plus (published by the Department for Work and Pensions, Research Report 781) are Rebecca Riley, Helen Bewley, Simon Kirby, Ana Rincón-Aznar and Anitha George. This work was funded by the Department for Work and Pensions, but the views expressed are those of the authors.

For further information contact:

Rebecca Riley (r.riley@niesr.ac.uk) on 07974 152982