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How the right disclosure design can help savers to switch to better deals

Conventional consumer protection frameworks claim that the lack of effective disclosure and the existence of deceptive advertising have exacerbated information imbalances between providers and users of financial services. Also, it is assumed that users frequently fail to make informed decisions because they do not sufficiently comprehend financial products' rules



From a behavioural point of view, human inertia and status quo bias lead to the puzzling evidence that few customers switch to better deals once they hold a product from a specific provider. In this sense, people might be continuously leaving interest earnings on the table. The issue of consumer inertia helps to explain the frequent offer of front book attractive deals to new customers vs normal deals to inactive long tenure customers. Also, it might be the case that some providers are rewarding long tenure customers with lower fees and better deals not because of their loyalty, but simply due to customers' inaction.

A recent study published by the Financial Conduct Authority - FCA conducted a set of randomized control trials to estimate the impact of interest rate disclosure on savers’ decisions. Using data from more than 130,000 saving account holders in the United Kingdom, the research suggests that pre-filled forms and just-in-time digital reminders are effective interventions to encourage savers to switch their money to products offering higher interest earnings.

Simply facilitating search and comparison might not be the most effective way to help savers to identify higher-paying products and stimulate market competition. For instance, enforced disclosure in the form of a box on the front page of an annual statement containing salient information on higher available rates had only a marginal impact (+3%) on switching behaviour. Alternatively, when similar consumers were provided also with a tear-off return form pre-filled for a switch to the best internal rate, along with a prepaid envelope, the impact on switching was the largest among all trials (+9%). Among customers who held accounts that experienced scheduled rate decreases, an email or SMS reminder was also effective, especially when sent shortly before the rate decrease. 

Nevertheless, consumer inertia was still observed in most of the cases. For example, the authors highlight that (p. 6): “Despite switching taking only 15 minutes on average, as reported by respondents of the follow-up survey, the switching level is low (17% across all trials) - even among consumers given relevant information about more attractive interest rates.” Furthermore, despite the fact that all interventions increased switching within providers, they were ineffective to stimulate switching to better deals available from other firms.

In summary, policy designs should not only facilitate search and encourage comparison of different products. To stimulate market competition, financial regulation could attempt to simplify switching and stimulated savers’ attention to relevant information.


Reference: Adams, P., Hunt, S., Palmer, C. and Zaliauskas, R. (2016) Attention, Search and Switching: Evidence on Mandated Disclosure from the Savings Market. FCA occasional papers in financial regulation, No 19, July. [ Link ].

Reading list on sanctions and welfare conditionality

I have blogged before on welfare conditionality in the UK and, in particular, on sanctions in the context of employment activation. This area has seen a dramatic change in the UK since 2010 with sanctions becoming an increasingly normalised part of the interaction between the state and people receiving various types of benefits. Below is a reading list on this area from across many disciplines and the news media. This is an area that needs far greater study and attention (see the ESRC centre on this area for one development). For those interested in how different types of financial incentives and non-financial instruments influence behaviour, this is an important case study. It highlights the importance of considering a wide range of ethical and other considerations in designing such policies. 

Adler (2016). A New Leviathan: Benefit Sanctions in the Twenty-first Century. Journal of Law and Society, Volume 43, Issue 2, pages 195–227, June 2016. 

 This article highlights the spectacular growth of benefit sanctions in the United Kingdom which, at their peak, exceeded the number of fines imposed in the criminal courts. It proposes a three-fold typology of monetary sanctions – punitive judicial sanctions, exemplified by court fines, regulatory administrative sanctions, exemplified by parking penalties, and disciplinary administrative monetary sanctions, exemplified by benefit sanctions – and compares them in terms of their main aims, how they are imposed, whether the interests of those sanctioned are protected, their severity, the socio-economic characteristics of offenders, the hardship caused, how proportionate they are, and whether they are compatible with justice. It argues that they are particularly problematic because their severity causes great and disproportionate hardship, and because, in addition to punishing offenders, they also attempt to discipline them by managing their behaviour, and concludes that, in the United Kingdom, they function as a key instrument for disciplining and managing the poor.


Abstract

Background In England between 2010 and 2013, just over one million recipients of the main out-of-work disability benefit had their eligibility reassessed using a new functional checklist—the Work Capability Assessment. Doctors and disability rights organisations have raised concerns that this has had an adverse effect on the mental health of claimants, but there are no population level studies exploring the health effects of this or similar policies 

Method We used multivariable regression to investigate whether variation in the trend in reassessments in each of 149 local authorities in England was associated with differences in local trends in suicides, self-reported mental health problems and antidepressant prescribing rates, while adjusting for baseline conditions and trends in other factors known to influence mental ill-health.

Results Each additional 10 000 people reassessed in each area was associated with an additional 6 suicides (95% CI 2 to 9), 2700 cases of reported mental health problems (95% CI 548 to 4840), and the prescribing of an additional 7020 antidepressant items (95% CI 3930 to 10100). The reassessment process was associated with the greatest increases in these adverse mental health outcomes in the most deprived areas of the country, widening health inequalities.

Conclusions The programme of reassessing people on disability benefits using the Work Capability Assessment was independently associated with an increase in suicides, self-reported mental health problems and antidepressant prescribing. This policy may have had serious adverse consequences for mental health in England, which could outweigh any benefits that arise from moving people off disability benefits.


Beatty and Fothergill (2015). Disability Benefits in an Age of Austerity. Social Policy & Administration Special Issue: New perspectives on health, disability, welfare and the labour market, Volume 49, Issue 2, pages 161–181, March 2015. 

This article takes a long-view of the huge rise in disability claimant numbers in the UK since the early 1980s and looks ahead to the trends that can now be expected to emerge in an era of fiscal austerity and welfare reform. The article's central thesis is that disability numbers are best understood as part of a triangular relationship between levels of employment, unemployment and sickness. In particular, the big decline of industrial employment in many places has often resulted in large-scale ‘hidden unemployment’ on disability benefits, especially among low-skilled workers. Looking ahead, the UK's welfare reforms are set to reduce disability claimant numbers but principally by restricting access to Employment and Support Allowance, the new disability benefit. The main effect will be to divert substantial numbers of men and women with ill health or disability onto unemployment benefits instead or, more often, out of the benefits system altogether.

Brown & Koettl (2015). Active labor market programs - employment gain or fiscal drain? IZA Journal of Labor Economics, December 2015, 4:12

 This paper provides a new perspective by classifying active labor market programs (ALMPs) depending on their objectives, relevance and cost-effectiveness during normal times, a crisis and recovery. We distinguish ALMPs providing incentives for retaining employment, incentives for creating employment, incentives for seeking and keeping a job, incentives for human capital enhancement and improved labor market matching. Reviewing evidence from the literature, we discuss especially indirect effects of various interventions and their cost-effectiveness. The paper concludes by providing a systematic overview of how, why, when and to what extent specific ALMPs are effective.

Burnet (2015). The war on welfare and the war on asylum. Race Class October–December 2015 vol. 57 no. 2 96-100. 

The author draws parallels between the UK Conservative government’s war on welfare and war on asylum, in terms of the impact of destitution on lives and the rhetoric which punishes the ‘bogus’. In both cases, large private corporations now control people’s fates whilst a ‘disturbed morality’ encourages the wider public to support such a coercive system and inform on our neighbours.

Caliendo & Schmidl (2016). Youth unemployment and active labor market policies in Europe. IZA Journal of Labor Policy, December 2016, 5:1. 

 Since the economic crisis in 2008, European youth unemployment rates have been persistently high at around 20% on average. The majority of European countries spends significant resources each year on active labor market programs (ALMP) with the aim of improving the integration prospects of struggling youths. Among the most common programs used are training courses, job search assistance and monitoring, subsidized employment, and public work programs. For policy makers, it is of upmost importance to know which of these programs work and which are able to achieve the intended goals – may it be the integration into the first labor market or further education. Based on a detailed assessment of the particularities of the youth labor market situation, we discuss the pros and cons of different ALMP types. We then provide a comprehensive survey of the recent evidence on the effectiveness of these ALMP for youth in Europe, highlighting factors that seem to promote or impede their effectiveness in practice. Overall, the findings with respect to employment outcomes are only partly promising. While job search assistance (with and without monitoring) results in overwhelmingly positive effects, we find more mixed effects for training and wage subsidies, whereas the effects for public work programs are clearly negative. The evidence on the impact of ALMP on furthering education participation as well as employment quality is scarce, requiring additional research and allowing only limited conclusions so far.

 Carter & Whitworth (2016). Work Activation Regimes and Well-being of Unemployed People: Rhetoric, Risk and Reality of Quasi-Marketization in the UK Work Programme. Social Policy & Administration, Early View (Online Version of Record published before inclusion in an issue). 

Well-being and employment activation have become central and intertwined policy priorities across advanced economies, with the mandation of unemployed claimants towards employability interventions (e.g. curriculum vitae preparation and interview skills). Compelled job search and job transitions are in part justified by the well-being gains that resulting employment is said to deliver. However, this dominant focus within the activation field on outcome well-being – the well-being improvement triggered by a transition to paid work – neglects how participation in activation schemes can itself affect well-being levels for unemployed people – what we term ‘process well-being’ effects. Combining theoretical literature with empirical work on the UK's large-scale quasi-marketized Work Programme activation scheme, we develop the limited existing academic discussion of process well-being effects, considering whether and how activation participation mediates the negative well-being effects of unemployment, irrespective of any employment outcomes. We further relate variation in such process well-being effects to the literature on activation typologies, in which ‘thinner’ work-first activation interventions are linked to weaker process well-being effects for participants compared to ‘thicker’ human capital development interventions. Confirming these expectations, our empirical work shows that Work Programme participants have, to date, experienced a largely ‘thin’ activation regime in which participants are both expected to, and empirically demonstrate, similar if not lower levels of process well-being than those who are openly unemployed. These concerning findings speak to all nations seeking to promote the well-being of unemployed people and particularly those perusing ‘black box’ activation schemes based around quasi-marketization, devolution and New Public Management.

Conlon et al (2016). Exploring the compatibility of mental health nursing, recovery-focused practice and the welfare state. Journal of Psychiatric and Mental Health Nursing, Volume 22, Issue 5, pages 337–343, June 2015. 

This discussion paper considers the implications for mental health nursing practice when working alongside individuals in receipt of state benefits. There is arguably a profound impact on an individual's recovery from mental ill health when that individual is also dependent on financial support from the government. Access to welfare benefits can have a significant impact on the recovery journey of that individual. This discussion paper will consider the practice implications for mental health nurses whose professional values include maxims such as ‘challenging inequality’ and ‘respecting diversity’, and will seek to examine the implications for practice when such values are divergent from those demonstrated in government policy. The paper will make comparisons with international welfare systems to demonstrate the way in which alternative configurations of state welfare can promote a system of social justice that is in greater equilibrium with the professional values of mental health nurses. Finally, the discussion will focus on the options for mental health nurses to either subscribe to government policy or to find compromise solutions that enable attention to remain focused and active on a strong value base of social justice and recovery-focused practice.



This paper sets up and estimates a non-stationary structural job search model that incorporates the main stylized features of job search monitoring in Belgian Unemployment Insurance. It finds weak behavioral effects of the reform, essentially because (i) the monitoring technology was not sufficiently precise, (ii) many unemployed were found to have so high search costs that they could not be induced to actively search for jobs, and (iii) the job search assessments were scheduled much too late in the unemployment spell. Too early scheduling should, however, also be avoided, as to leave time to react to the sanction threat.


 This study evaluates the effectiveness of contracting out mandatory publicly provided counselling and training for long-term unemployed in Flanders (Belgium) to private for-profit and non-profit organisations (FPOs and NPOs). A multivariate transition model exploits timing-of-events and novel exclusion restrictions to account for selection on unobservables. Overall, the intervention was highly effective in reducing unemployment duration, but also spurred employment instability and withdrawals from the labour force. FPOs slightly, but significantly enhanced exits to employment without reinforcing recidivism relative to the public provider but not significantly relative to NPOs. FPOs also charged lower prices and hence were the best performing providers.

Deeming (2015). Foundations of the Workfare State – Reflections on the Political Transformation of the Welfare State in Britain. Social Policy & Administration, Volume 49, Issue 7, pages 862–886, December 2015. 

The British ‘welfare state’ has been transformed. ‘Welfare’ has been replaced by a new ‘workfare’ regime (the ‘Work Programme’) defined by tougher state regulatory practices for those receiving out-of-work benefits. US-style mandatory community work programmes are being revived and expanded. This article, therefore, considers shifting public attitudes to work and welfare in Britain and changing attitudes to working-age welfare and out-of-work benefits in particular. It also considers the extent to which recent transformations of the state may be explained by declines in traditional labourist politics and class-based solidarity. Thus, we attempt to develop a richer understanding of changing public attitudes towards welfare and the punitive regulatory ‘workfare’ practices engaged by the modern state in the liberal market economy; reflecting on the nature of the relations between ideology, party policies, popular attitudes and their political impact.

Diop-Christensen (2015). Is ‘making work pay’ effective for the ‘unemployable’? The impact of benefit sanctions on social assistance recipients in Denmark. Journal of European Social Policy May 2015 vol. 25 no. 2 210-224

 In spring 2006, the Danish government introduced a policy that required married long-term social assistance recipients to work 300 hours in non-subsidised employment during a 2-year period in order to remain eligible for benefits. The intention was to ‘make work pay’ for unemployed immigrant women. This study evaluates how this policy influenced their transitions to employment and other benefit schemes by applying a competing risk duration model on Danish administrative data. The results show that the new rules not only had the anticipated impact on the women concerned, but the policy also had an unforeseen effect on the work effort of social welfare workers. Many moved their clients to other benefit schemes instead of applying the sanctions. This was particularly the case for the weakest among the unemployed and in municipalities, which were headed by left-wing mayors or that received extra funds from the central government. Although the new policy did increase transitions to employment, this effect was stronger in municipalities that provided extra support. 


In 2010 the Coalition Government (CG) as part of major changes to the welfare and benefits system introduced a more stringent workfare (or work first) regime than under previous New Labour Governments - access to benefits becomes conditional on tougher work and work search requirements, and the reforms also involves an increased the use of benefit sanctions. The CG established its flagship welfare to work programme via the Work Programme involving an extension of the market in the provision of welfare to work services for long

term unemployed. At the same time the Government has implemented welfare spending cuts on an almost unprecedented scale.

The emergence or growing interest in a rights discourse relating to contemporary welfare reforms has followed increasing evidence of the cumulative impacts of welfare conditionality and expenditure cuts on disadvantaged groups and the wider population. The debate about how the current reforms impacts on individual human rights is now seen as a key issue in terms of policy and campaign .These themes will be explored in this paper. 

 The purpose of this report is to:

(1) Analyse and assess the implementation of the Coalition Government welfare reforms

with a specific focus on different aspects of welfare and benefit conditionality

(2) Assess the extent to which conditionality reinforces poverty and social exclusion of

benefit claimants

(3) Consider the how the welfare reforms and increasing conditionality impact on the social rights of claimants

 The researchers used a qualitative case study methodology based on a literature review and documentary analysis derived from a review of government reports and statistics, reports from industry associations, academic papers, and recent media articles. This review was

complemented by obtaining qualitative and quantitative data via key informant interviews with relevant stakeholders and policymakers. 

 Fitzpatrick et al (2015). Destitution in the UK: an interim report. York: Joseph Rowntree Foundation.


Here is the Welfare Conditionality site - ESRC funded study. 

Foster et al (eds) (2015). In Defence of Welfare. Social Policy Association. 

(Contains several articles on the impact of benefit sanctions) 


 Eligibility for social security benefits in many advanced economies is dependent on unemployed and underemployed people carrying out an expanding range of job search, training and work preparation activities, as well as mandatory unpaid labour (workfare). Increasingly, these activities include interventions intended to modify attitudes, beliefs and personality, notably through the imposition of positive affect. Labour on the self in order to achieve characteristics said to increase employability is now widely promoted. This work and the discourse on it are central to the experience of many claimants and contribute to the view that unemployment is evidence of both personal failure and psychological deficit. The use of psychology in the delivery of workfare functions to erase the experience and effects of social and economic inequalities, to construct a psychological ideal that links unemployment to psychological deficit, and so to authorise the extension of state—and state-contracted—surveillance to psychological characteristics. This paper describes the coercive and punitive nature of many psycho-policy interventions and considers the implications of psycho-policy for the disadvantaged and excluded populations who are its primary targets. We draw on personal testimonies of people experiencing workfare, policy analysis and social media records of campaigns opposed to workfare in order to explore the extent of psycho-compulsion in workfare. This is an area that has received little attention in the academic literature but that raises issues of ethics and professional accountability and challenges the field of medical humanities to reflect more critically on its relationship to psychology.

Friedli & Stearn (2015). The wrong mindset. New Scientist, Volume 227, Issue 3030, 18 July 2015, Pages 24–25. 

Unemployment is not a psychological disorder in need of mandatory treatment, say Lynne Friedli and Robert Stearn

Friedli (2016). 'The Politics of Tackling Inequalities: The Rise of Psychological Fundamentalism in Public Health and Welfare Reform' in Smith, Bambra & Hill (eds.) Health Inequalities: Critical Perspectives. OUP. 

Gafffney (2015). Retrenchment, Reform, Continuity: Welfare under the Coalition. National Institute Economic Review February 2015 vol. 231 no. 1 R44-R53

 The Coalition's record on working age social security is reviewed under the headings of continuity (with the policies of the previous government), retrenchment and reform. Under continuity, the Coalition's decision to proceed with the previous government's planned reassessment of incapacity benefit claims was a notable policy mistake which led to the near-collapse of the assessment system by 2014. Retrenchment measures are dominated by benefit uprating changes which, along with measures targeting higher-income groups, have been less regressive than alternative approaches to expenditure reduction. However these changes were accompanied by a number of smaller-scale retrenchment measures, with substantial cumulative impacts on income. Retrenchment has thus been less regressive than it might have been but more regressive than it needed to be, taking the retrenchment targets as given. Policy failure and exogenous economic factors have offset the effect of retrenchment measures, with the result that expenditure by 2014/15 was little different to that planned in the Labour government's last budget. Full implementation of major reforms has been deferred to the next parliament. The main achieved policy change has been an unprecedented tightening of the benefit sanctions regime.

 
Hergenrather et al (2015). Employment as a Social Determinant of Health: A Review of Longitudinal Studies Exploring the Relationship Between Employment Status and Mental Health. Rehabilitation Research, Policy, and Education, Volume 29, Number 3, 2015, pp. 261-290(30). 

Purpose: To explore employment as a social determinant of health through examining the relationship between employment status and mental health.

Method: The authors conducted a systematic review of 48 longitudinal studies conducted in Australia, Canada, Croatia, Germany, Ireland, Israel, the Netherlands, Norway, United Kingdom, and United States to explore the causal relationship between employment status and mental health.

 Results: Five common trajectories were identified as employment, unemployment, job loss, reemployment, and retired. Employment and reemployment were associated with better mental health (e.g., lower psychological distress, lower depression, lower anxiety), whereas unemployment and job loss were correlated with poorer mental health (e.g., higher depression, higher psychological distress).

Conclusion: To enhance employment outcomes, service providers must acknowledge the relationship between employment status and mental health. The trajectories of employment and reemployment should be further explored by category (e.g., temporary, adequacy, income, skill level, hours, status). Additional research is needed to further elucidate the relationship between employment status and mental health.


 Similar to numerous other European countries, Germany's unemployment policy went through a paradigm shift in 2005, towards activation policy by tightening their monitoring and sanction regime. With our study, we aim to provide causal evidence for whether an intended positive effect of benefit sanctions on employment entry of welfare recipients has been bought at the expense of an unintended enhanced incentive to leave the labor market. Using a mixed proportional hazard model, we draw causal inference of sanction enforcements on unemployment exit hazards. Based on a novel survey sample covering the first three years after the 'Hartz IV' law came into effect, we provide evidence for a positive impact of sanctions on employment as well as on exit from labor force.


 Eligibility criteria for unemployment benefits, which require recipients to actively look for work, take up suitable job offers or take part in active labour market programmes (ALMPs), or risk benefit sanctions, can play an important role in offsetting the negative impact of generous unemployment benefits on employment incentives. This paper presents information on the strictness of eligibility criteria for unemployment benefits for 40 OECD and/or EU member countries. It covers availability requirements during ALMPs and suitable work criteria, job search requirements and monitoring of independent job search effort, and sanctions for voluntary unemployment, refusing a job offer or participation in active labour market measures. These qualitative data are then used to compile a composite indicator of the strictness of eligibility criteria and some comparisons are made with the results of a similar exercise by the OECD in 2011. This indicator complements existing cross-country indicators relating to unemployment benefits, such as net replacement rate data from the OECD Taxes and Benefits Database and data on ALMP expenditure compiled annually by Eurostat and the OECD.

Livingstone (2015). The Hunger Games: Food poverty and politics in the UK. Capital & Class May 22, 2015 0309816815576737

This ‘Behind the News’ intervention offers a critique of food aid provision in the UK through two distinct and yet interconnected perspectives. First, it situates the crisis of food poverty within a wider social and historic context, and second, it questions the position and response of the capitalist state to this growing crisis. The piece weaves the two perspectives together, reflecting on the current government’s struggle to recognise, accept or address the significance of this crisis.

Loopstra et al (2015). Austerity, sanctions, and the rise of food banks in the UK. BMJ 2015; 350 doi: http://dx.doi.org/10.1136/bmj.h1775(Published 08 April 2015)

 (Extract) 

In the spring of 2014 the Trussell Trust, a non-governmental organisation that coordinates food banks in the United Kingdom, reported that it had distributed emergency food parcels to 913 138 children and adults across the UK in the previous year—seven times more than in 2011-12.1 In 2009-10 Trussell Trust food banks were operating in 29 local authorities across the UK; by 2013-14, the number had jumped to 251 (fig 1⇓). Although soup kitchens have long operated in the UK,2 this rapid spread of food banks is a new phenomenon, raising concerns from the UK’s Faculty of Public Health that “the welfare system is increasingly failing to provide a robust last line of defence against hunger.”3 General practitioners have also raised concerns about patients seeking referrals to food banks.4 One recent survey of 522 GPs found that 16% had been asked for such referrals.5


Molander & Torsvick (2015). Getting People into Work: What (if Anything) Can Justify Mandatory Activation of Welfare Recipients? Journal of Applied Philosophy, Special Issue: Socio-Economic Justice: Beyond The Welfare State? Guest Editors: Christian Schemmel and Stefan Gosepath, Volume 32, Issue 4, pages 373–392, November 2015

So-called activation policies aiming at bringing jobless people into work have been a central component of welfare reforms across OECD countries during the last decades. Such policies combine restrictive and enabling programs, but their characteristic feature is that enabling programs are also mandatory, and non-compliers are sanctioned. There are four main arguments that can be used to defend mandatory activation of benefit recipients. We label them efficiency, sustainability, paternalism, and justice. Each argument is analysed in turn. First we clarify which standards it invokes, thereafter we evaluate each argument according to its own standards and introduce competing normative concerns that have to be taken into account.

Morris (2016). The moral economy of austerity: analysing UK welfare reform. The British Journal of Sociology, Volume 67, Issue 1, pages 97–117, March 2016.

This paper notes the contemporary emergence of ‘morality’ in both sociological argument and political rhetoric, and analyses its significance in relation to ongoing UK welfare reforms. It revisits the idea of ‘moral economy’ and identifies two strands in its contemporary application; that all economies depend on an internal moral schema, and that some external moral evaluation is desirable. UK welfare reform is analysed as an example of the former, with reference to three distinct orientations advanced in the work of Freeden (1996), Laclau (2014), and Lockwood (1996). In this light, the paper then considers challenges to the reform agenda, drawn from third sector and other public sources. It outlines the forms of argument present in these challenges, based respectively on rationality, legality, and morality, which together provide a basis for evaluation of the welfare reforms and for an alternative ‘moral economy’


Murphy (2016). Low road or high road? The post-crisis trajectory of Irish activation. Critical Social Policy January 22, 2016 0261018315626841

Comparatively slow in adopting any clear activation strategy, post-crisis Ireland crossed the Rubicon and rapidly took steps to implement a work-first labour activation strategy. The article maps and examines the interaction of three variables – ideational influences, political interests and institutional processes – to assess the nature of post-crisis Irish activation policy. Troika imposition of aid conditionality, the ideational role of the OECD and domestic elites worked to shift the focus of Irish activation policy and its implementation. Post-crisis Irish activation is less influenced by social democratic versions of high-road activation than neo-liberal managerial stock management and conservative behavioural controls. These converge into a low-road model of activation. There is some demand for, but little articulation of, an alternative policy that could be centred around less conditionality and more focus on demand-side issues including low pay, quality work, distribution of employment and removal of barriers to employment.

NHS Scotland. 2nd Feb 2016. Pulling in different directions?

This is an update to the baseline report Making a Bad Situation Worse?, published on 2nd October 2013.m It provides an update on developments in the social security system and changing economic context and monitors relevant changes in population health and health inequalities in Scotland. It also presents findings from a rapid review of the literature to identify whether and which subgroups of the Scottish population have been disproportionately affected by the social security reforms.
 

Sage (2015). Do Active Labour Market Policies Promote the Subjective Well-Being of the Unemployed? Evidence from the UK National Well-Being Programme. Journal of Happiness Studies, October 2015, Volume 16, Issue 5, pp 1281-1298. 

In the past 5 years, the UK government has expanded its efforts to understand, measure and incorporate indicators of subjective well-being (SWB) into the policy-making process. Utilizing the new data collected as part of the government’s well-being agenda, this paper investigates whether active labour market programmes (ALMPs) are associated with increased SWB amongst the unemployed. Unemployment has long been shown to be detrimental to mental health and happiness. In recent years, ALMPs have been increasingly proposed as potential mechanisms to improve the SWB of the unemployed. Using multiple linear regression models, the findings suggest that ALMPs do improve the SWB of the unemployed. However, there are three caveats. First, the effect of ALMPs appears to be far stronger for evaluative measures of SWB over affective measures. Second, the effect of ALMPs is larger for men than for women. Third, the impact of an ALMP is dependent upon the type of intervention: work-oriented ALMPs are more effective than employment-assistance ALMPs. In light of these findings, the theoretical and policy consequences are discussed.


Tomlinson (2016). Risking peace in the ‘war against the poor’? Social exclusion and the legacies of the Northern Ireland conflict. Critical Social Policy, February 2016, vol. 36 no. 1 104-123.

 Discourses around poverty, dependency and austerity take a particular form regarding Northern Ireland which is seen as ripe for economic ‘rebalancing’ and public sector reduction. The Welfare Reform Act 2012 is pivotal in that it provides the muscle for disciplining claimants for a low-waged, flexible labour market. But the Northern Ireland Assembly has not passed the Act or agreed a budget and the return of Direct Rule beckons as a result. The article sheds light on the stand-off over the Welfare Reform Act using data from the 2012 PSE Survey. It demonstrates that the impact of violent conflict is imprinted on the population in terms of high rates of deprivation, poor physical and mental health, and significant differences between those experiencing little or no conflict, and those with ‘high’ experience. In ignoring these legacies of the conflict, the Westminster government is risking peace in its ‘war against the poor’.

 
Narain et al (2015).  Impact of timing out of welfare benefits on women's access to health care. American Public Health Association. 

Welfare reform brought about a paradigm shift in the welfare program. The key features of welfare reform are mandatory benefit sanctions for failure to meet work requirements and a maximum time­‐limit for benefit receipt of five years or less. Welfare reform has been associated with reductions in access to health care and declining health status among socioeconomically vulnerable women; however, the mechanisms underlying the association of welfare reform with these adverse health outcomes are unclear. This study examined the impact of timing out of welfare benefits on women’s access to health care. The study population was current and former welfare recipients, age 17-55 who participated in the Survey of Income and Program Participation, 2004 and 2008 panels (n=1790). Bivariate probit models were used for this analysis. The selection equation predicted the probability of timing out of welfare benefits, using the duration of the state time limit. The outcome equations estimated the impact of timing out of welfare benefits on health insurance coverage and medical provider contact, controlling for age, race, ethnicity, education, citizenship, marital status, number of children, having an infant, severity of state welfare sanctions and year specific trends. The models were also adjusted for clustering at the state level. Timing out of welfare benefits was found to increase the predicted probability of being uninsured by 23% and to decrease the predicted probability of medical provider contact in the last year by 32%, controlling for other variables in the model. These findings were significant at the (p=.05) level.

Stephens & Blenkinsopp (2015). Young people and social security: an international review. Joseph Rowntree Foundation.  

The UK government has announced important changes to young people’s social security entitlements, including withdrawing an ‘automatic’ entitlement to Housing Benefit for 18- to 21-year-olds. This report reviews the social security entitlements of young people and the responsibilities that parents have towards them in six advanced economies.  

Tisch & Wolf 2015). Active labour market policy and its outcomes : Does workfare programme participation increase self-efficacy in Germany? International Journal of Sociology and Social Policy, Vol. 35 Iss: 1/2, pp.18 - 46.


"Active labour market policy and its outcomes : Does workfare programme participation increase self-efficacy in Germany?", Purpose

– The purpose of this paper is to examine the effect of workfare programme participation on self-efficacy, because many studies suggest that sufficient self-efficacy is essential for successful job search in modern labour markets.


Design/methodology/approach

– The paper analyses an exemplary German workfare programme’ the so-called “One-Euro-Jobs” programme and examines whether participation in this programme improved the self-efficacy of participants. The analyses are based on survey data (Panel Study Labour Market and Social Security) that were combined with administrative records of the Statistics Department of the German Federal Employment Agency to obtain more reliable information on programme participation. To detect causal effects of participation, the authors apply propensity score matching.


Findings

– The findings show that participants’ self-efficacy, on average, was not improved by programme participation. Also, no well-determined positive effects of programme participation were found when controlling for the individual baseline level of self-efficacy.


Practical implications

– The findings suggest that workfare programme participation did not fulfil several of the psychological functions of work necessary to enhance participants’ self-efficacy. The authors suggest a two-step approach to enhancing individuals’ self-efficacy and their job-search abilities: in the first step, workfare participation aims to improve employability; in the second step, participants can learn the extent to which they have become ready to work in a regular subsidised job.


Originality/value

– Various studies examine the effect of workfare programme participation on employment prospects, well-being, health or social participation. Within the discourse on active labour market policy, this paper is the first to study the effect of workfare programme participation on self-efficacy.




This paper looks at two related labour market policies that have persisted and even proliferated across Europe both before and after the financial crisis: wage restraint, and punitive workfare programmes. It asks why these policies, despite their weak empirical records, have been so durable. Moving beyond comparative-institutionalist explanations which emphasise institutional stickiness, it draws on Marxist and Kaleckian ideas to argue that, under financialisation, the state has been pushed to adopt disciplinary and destabilising policies which target the working class, as a means of bolstering the ‘confidence’ of capitalists in the short term. Wage restraint and punitive active labour market policies are two examples of such measures. We argue that this process is not embedded in existing institutions, but actively disrupts or subverts them.


 With the introduction of a new welfare benefit system in 2005, Germany implemented quite strict benefit sanctions for welfare recipients aged younger than 25 years. For all types of non-compliance except for missing appointments, their basic cash benefit is withdrawn for three months. A second sanction of the same type within one year implies a complete benefit cut for three months. We analyze the impact of these sanctions on job search outcomes and on transitions out of the labor force. Our analysis is based on administrative data on a large inflow sample of young male jobseekers into welfare in West Germany. We estimate separate models for people living alone and people living with their family, as sanctioned welfare recipients living with other household members can partly rely on their support and might react less by increasing search intensity and lowering reservation wages. We estimate the parameters of multivariate duration models taking selection based on unobservables into account. Our results suggest that both the first and the second sanction increase the probability of finding a job, but that these jobs go along with lower earnings due to first but not the second sanction. Moreover, first sanctions significantly increase the transition rate out of the labor force of both groups of young men, while second sanctions amplify this effect only for young men living in single households.

 
Whitworth (2016). Neoliberal paternalism and paradoxical subjects: Confusion and contradiction in UK activation policy. Critical Social Policy, February 2, 2016 0261018315624442

 The twin thrusts of neoliberal paternalism have in recent decades become fused elements of diverse reform agendas across the advanced economies, yet neoliberalism and paternalism present radically divergent and even contradictory views of the subject across the four key spaces of ontology, teleology, deontology and ascetics. These internal fractures in the conceptual and resulting policy framework of neoliberal paternalism present considerable risks around unintended policy mismatch across these four spaces or, alternatively, offer significant flexibility for deliberate mismatch and ‘storying’ by policy makers. This article traces these tensions in the context of the UK Coalition government’s approach to the unemployed and outlines a current policy approach to employment activation that is filled with ambiguity, inconsistency and contradiction in its understanding of the subject, the ‘problem’ and the policy ‘solution’.

Watson (2015). Does Welfare Conditionality Reduce Democratic Participation? Comparative Political Studies, April 2015, vol. 48 no. 5 645-686. 

 The past 20 years have witnessed a shift to work-based welfare conditionality within the advanced welfare states, as access to social benefits are increasingly predicated on individuals agreeing to behavioral conditions related to participation in the labor market. Existing literature on the political consequences of this shift offers contradictory expectations. While new paternalists claim that it should increase political participation among benefit recipients, others argue that it has a depressive effect. The majority of existing studies rely on cross-sectional analyses, which leaves them open to charges of selection bias. Utilizing multiple longitudinal research designs, this article finds that conditionality has a depressive effect on patterns of democratic engagement. Welfare conditionality reduces political and civic participation, political interest and efficacy, and personal efficacy. In disaggregating conditionality’s effects across two client groups, the article finds largely positive effects among recipients of the contributory disability benefit but negative effects among means-tested recipients of the lone parent benefit.

Webster (May 2016). The DWP’s JSA/ESA Sanctions Statistics Release, 18 May 2016.  (must be downloaded from website) 


Drawing on Autonomist Marxist theory this article situates the 2010–15 Conservative–Liberal Coalition government’s active labour market policy as the most recent phase in a state ‘strategy of underdevelopment’ (Cleaver, 1977) to erode the autonomy of labour power and facilitate a reconfiguration of labour and work to impose (competition for) undesirable jobs on the terms and conditions offered by capital (Peck, 2001: 349). The article contends that Mandatory Work Activity and the Work Programme facilitate a pattern of differentiated activation, where segmentation and stratification of the non-employed population (re)produces an insecure, disciplined, segmented and stratified labour power for insecure, segmented, stratified labour markets. From the perspective of capital and the state the differential job outcomes associated with these programmes are less a mark of policy failure than of policy success.

Wright (2016). Conceptualising the active welfare subject: welfare reform in discourse, policy and lived experience. Policy & Politics, Volume 44, Number 2, April 2016, pp. 235-252(18). 

The idea of the active welfare subject has become irresistible to both policy makers and academics and has taken a lead role in the transformation of twenty-first century social security systems. Two distinguishable approaches have emerged – the dominant model and a counter model. The dominant model emphasises moralised individual responsibility for 'wrong choices' and mandates behavioural change to become active. The counter model situates benefit recipients in the present as disempowered creative, reflexive and resourceful beings. This article develops conceptualisations by comparing benefit recipients' accounts (from an exploratory qualitative study) of lived experience with both models.

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