Keeping in touch with the labour market: a qualitative evaluation of the Back to Work Bonus
A hard copy of this report summary can be obtained by contacting Paul Noakes [E-Mail: Paul.Noakes@dwp.gsi.gov.uk] or by writing to him at the 'Social Research Division, Department for Work and Pensions, 4th Floor, Adelphi, 1-11 John Adam Street, London WC2N 6HT'.
Research Report No. 96
By Andrew Thomas, Nick Pettigrew, Daphne Cotton and Paul Tovey
The Back to Work Bonus was introduced in 1996 with the aim of encouraging clients in receipt of Jobseeker’s Allowance or Income Support to maintain contact with the Labour Market. This qualitative research study explores whether there have been any changes in clients’ attitudes and behaviour towards undertaking part-time or voluntary work whilst claiming since the introduction of the Back to Work Bonus. The research compared findings with a baseline study published in 1997.
- Overall awareness about the Back to Work Bonus scheme was limited, and the report found little evidence of it acting as an incentive to increase the number of part-time hours worked. The feeling of some respondents was that they would have moved into full-time work for reasons unconnected to the payment of the Bonus. A few people felt that they might have increased their part-time hours in response to the Bonus, had they known about it.
- Clients’ overarching view was that while the Bonus was a good idea in principle, in practice it might not always act as an incentive to move people into full-time work because: some respondents (mainly men) only wanted full-time employment; some only wished to work part-time; out of work benefits were felt to offer more security.
- As was apparent in the baseline research, earnings disregards were perceived to act as a disincentive to part-time work: the amount that could be earned was felt to be ‘negligible’, particularly once travel and lunch expenses were taken into account.
- Decision-making processes about the take-up of work had changed little since the baseline report. Attitudes to employment plus barriers to work (perceived and actual) determined jobsearch strategies. Decision-making amongst couples varied enormously. Male partners tended to want to make decisions about their own work strategy as well as that of their partner.
- Part-time and voluntary work were not necessarily seen or used as direct stepping stones off benefit. Rather, they were considered more likely to have acted indirectly, but positively, as transitional activities. A belief that part-time and voluntary work could act as a direct stepping stone into full-time work had weakened somewhat since the previous study.
Background
The Back to Work Bonus (the Bonus) was introduced in October 1996. The aims of the Bonus are to encourage individuals and their partners to keep in touch with the labour market by undertaking small amounts of work whilst claiming Jobseeker’s Allowance or Income Support, and to provide an incentive to claimants to move out of unemployment and into paid work. Clients accrue a Bonus if earnings from part-time work reduce the amount of Jobseeker’s Allowance or Income support they are paid. They can claim the Bonus – a tax-free lump sum of up to £1,000 – if they move off benefit and into work.
BMRB Qualitative were commissioned to undertake a qualitative study to explore whether there have been any changes in clients’ attitudes and behaviour towards undertaking part-time or voluntary work whilst claiming benefit since the introduction of the Bonus.
The study comprised seventy-six depth interviews with lone parents in receipt of Income Support, unemployed people claiming Jobseeker’s Allowance and former jobseekers. Thirty-five paired depth interviews were also carried out with jobseekers, former jobseekers, and their partners. The sample included both those who had experience of part-time or voluntary work whilst claiming benefit and those who had not undertaken such activities whilst claiming. Fieldwork took place between September and November 1998.
Moving into work: attitudes and decision-making
The process of moving into work is rarely straightforward and a number of factors come into play that contributes to a person’s decision to look for work. On the basis of the individuals interviewed for the present study, the labour-market decision-making process was modelled to explore the links between the factors involved in decisions about work.
Attitudes about work are partly shaped by a series of inter-related factors such as beliefs, personal circumstances and barriers to work (perceived or actual). The report divides these barriers into three groups:
- personal barriers, including age, qualifications and experience, lack of confidence, lack of childcare facilities, and family commitments;
- labour-market related barriers including the availability of work, job prospects and satisfaction, long travel to work distances, employer attitudes, and lack of jobsearch advice;
- financial barriers including a lack of understanding about the contribution of out-of-work benefits and in-work benefits, a lack of ‘better-off’ calculations, low earnings disregards, long hours for low rates of pay for jobs, and a major concern of exchanging the perceived security of benefits for the perceived insecurity of work.
It follows in this model of decision-making that jobsearch strategies are informed by these barriers and attitudes. The ensuing work-related strategy may be characterised by an immediate, short-term or long-term goal. It may range from the wish to find employment, either full or part-time; to find employment on an ad-hoc basis for extra money; to undertake training or further education; or to avoid work altogether.
Where couples were involved, the decision-making approach could be seen to lie along a continuum ranging from joint decision-making to totally independent decision-making, with various shades in between.
Comparisons with the baseline research
Compared to the baseline study, disaffection with the traditional labour market seemed to be in greater evidence, a feature that appeared to go hand in hand with greater use being made of undeclared earnings. However the key features taken into account when making the decision as to whether to take a job were very similar to the baseline study. There was more evidence in this study than in the baseline report to suggest that male partners wanted to make more decisions about their own work strategy as well as that of their partner.
The Back to Work Bonus
Overall, there was a marked lack of awareness of the Back to Work Bonus scheme, even amongst those who were eligible. There was also considerable confusion with other Employment Service schemes. A variety of administrative problems with the payment of the Bonus were reported by respondents, including instances of payment without a specific request from the recipient, and, on applying for the bonus after starting full-time work, being informed that they had already received it.
‘“I think they should be reminding people of this scheme. You get so many bits of paper, this scheme that scheme. I don’t remember seeing anything about it on the TV about it’” (Lone parent, male, 26-40, voluntary work)
Information about the Bonus came from a number of sources including a computer generated letter informing benefit recipients that they were eligible to start accruing a bonus, and a letter indicating amounts accumulated under the scheme. There was little evidence of information being proactively offered by Employment Service or Benefits Agency staff about the Bonus and little evidence of jobseekers or lone parents looking for additional information.
As there was little awareness of the Bonus, the principles of the Bonus were described to the respondents. Whilst the Bonus was perceived to be a good idea in principle, it was not felt to be effective in practice. Some respondents felt that the Bonus was an ‘“enforced” “saving’” as it comprised of half the money ‘“taken” “off’ ”them on declaring their earnings above the earnings disregard. There was considerable strength of feeling to indicate that it was more important to have this money at the time of greatest need – while claiming benefit. This mitigated against any incentivising effect of the Bonus.
“‘At that time, I needed the money more than anything. I couldn’t understand why they’d done that when I needed the money there and then, and not when I started working’” (Former jobseeker, female, 26-40, part-time work)
There was no evidence of the Bonus acting as an incentive to increase hours or move from part-time work to full-time work, even amongst those who were eligible for the Bonus. This was in part because many eligible people were not aware that they were accumulating a Bonus as well as a feeling amongst some that they would have moved to full-time work with, or without, the Bonus.
Respondents did not, on the whole, feel that the Bonus could have an effect on moving people into full-time work because:
- some respondents, mainly men, only wanted a full-time job and would not contemplate a part-time job;
- some respondents only wished to work part-time;
- benefits were felt to offer more security than a full-time job; and
- respondents perceived a lack of suitable full-time jobs in the area.
In terms of moving people into part-time work, views were mixed. There was a perception that working less than 16 hours a week was not financially viable because of low wages, and that the Bonus was not a sufficient incentive to encourage the take-up of part-time work whilst claiming.
Earnings disregards
There was minimal awareness of the term ‘earnings disregard’, although there was more awareness of the concept. There was some confusion over the amount of the disregard.
The current level of the earnings disregard was seen as derisory and perceived to act as a disincentive to do part-time work. This was because the amount earned was felt to be ‘negligible’, especially once work expenses were taken into account. This low level of disregard would encourage people to not declare part-time work to the jobcentre.
The Role of part-time work
Perceptions of part-time work related to a person’s availability and desire for full-time work. Women, especially those with children, tended to see part-time work as complementary to their family commitments. Some lone parents viewed part-time work whilst claiming in a positive light, an attitude which may be explained in part by the higher earnings disregard available for those claiming Income Support. Conversely, those respondents used to, and desirous of, full-time work saw part-time work in negative terms. Men, on the whole, did not regard part-time work as a ‘“proper” “job’”.
Part-time work was described as casual or temporary and seen as quite insecure. Wages were felt to be low and hours often anti-social. Consequently, part-time work was seen as low status. However, some respondents described their part-time work as more permanent and as a very acceptable arrangement for them.
Respondents expressed some confusion over the number of hours that could be worked and the effect of any earnings on their benefits. Jobcentres, on the whole, were felt to be indifferent towards part-time work and not particularly helpful or forthcoming with advice. Some respondents were of the opinion that jobcentre staff had insufficient knowledge to help work out strategies for combining part-time work with claiming benefits.
Reasons for doing part-time work
Reasons offered for undertaking part-time work varied. Generally those who did part-time work showed a willingness to work for small amounts of income, which was sometimes seen as supplementary to benefits. Some saw part-time work as an activity to keep them busy. Part-time work helped increase confidence, self-esteem and motivation, and presented the opportunity to learn new, or keep up, skills.
“‘Part-time work builds your confidence back up, even if it’s only 5 hours a week. You have to make the effort’” (Lone parent, female, 18-25, part-time work)
Some individuals chose part-time work over full-time work because of the independence it offered them. There were a small number of respondents who took up part-time work in the expectation that it would act as a stepping-stone to full-time employment, although they were sometimes disappointed.
Reasons for not doing part-time work
Some people decided against taking up part-time work for the following reasons:
- a belief that part-time work was not a ‘proper job’;
- part-time work was regarded as menial and of low status;
- the de-skilling effect of perceived menial part-time work;
- low pay and costs of part-time work;
- low earnings disregard;
- fluctuation of hours and wages;
- disruption to family life;
- a need to be available for full-time work; and
- confusion over benefit rules regarding part-time work.
Part-time work as a stepping-stone off benefit and into full-time work
Some respondents felt that part-time work was more likely to lead to full-time work if it was related to their job aspirations. The potential of part-time work was viewed in terms of helping to develop skills and confidence to move into a full-time position. It could be useful in making contacts, or may lead unexpectedly to a full-time position. However, there were others who felt that part-time work could be both an irrelevance and a hindrance in gaining full-time employment.
Overall, the study found little evidence of part-time work leading directly to full-time work, as most respondents found it difficult to find part-time work which fulfilled their expectations and enabled them to move off benefit. However there was some evidence of part-time work having an indirect effect. Consequently, part-time work was seen less as a direct stepping-stone and more of a transitional activity between unemployment and full-time work.
Comparison with the baseline research
The present study tended to confirm the perception of part-time work highlighted in the baseline study. An increasing emphasis on shift working, particularly split shifts meant that the ‘disruptive’ view of part-time work was heightened in the present study, especially amongst lone parents.
In the baseline study there was a sense that part-time work “could” offer a useful route to gaining confidence, skills and possibly work. In this study, there was a view that part-time work could easily become a treadmill ultimately leading nowhere, a reflection of the fact that the part-time jobs obtained were unskilled, low paid and often temporary. Unlike the previous study, there was greater emphasis on the value of relatively small earnings. This emphasis was particularly apparent amongst the lone parents.
It was also apparent in the current study that reliance upon undeclared earnings had become more ‘legitimate’ in the sense that respondents, while condemning the practice in principle, were more likely to see this as a way of making ends meet. The overall belief that part-time work could be a stepping-stone had dissipated somewhat since the previous study, as the predominant view was that the ‘right type’ of part-time work hardly existed anymore.
The Role of voluntary work
Volunteering was described in stereotypical terms by many respondents- typically as pass-time attracting middle aged-women who liked doing good deeds.
“It’s like working for Oxfam, working for the old people’ (Jobseeker, female, 26-40, no activities)
Knowledge regarding the rules relating to combining voluntary work with the receipt of benefits was mixed, although for Jobseeker’s Allowance clients there was widespread recognition of the need to declare voluntary activities because of the actively seeking work rule(1). People undertaking voluntary work generally understood the rules correctly.
Reasons for doing voluntary work
The reasons for undertaking voluntary work can be summarised as follows:
- Direct work-related reasons. Those taking up voluntary work with a specific job in mind were very focused individuals and were generally younger recipients.
- Indirect work-related reasons. Voluntary work was seen as having some benefits that might enhance a person’s prospects of getting a job, although it may not be related to a specific field of work.
- Non work-related reasons. Some people did voluntary work for reasons unrelated to opportunities for paid employment, for example for philanthropic reasons, as well as for enjoyment and personal satisfaction. Others did it simply for something to do.
Reasons for not doing voluntary work
Reasons put forward by respondents for not participating in voluntary activities included:
- lack of awareness - some people were generally ignorant about voluntary work.
- barriers to jobsearch - some people could not see the connection between voluntary work and a full-time job and felt that voluntary work may actually prevent this;
- working for nothing - some respondents were adamant that they would not work without pay and felt angry and insulted at the suggestion;
- other responsibilities - some lone parents felt that their home responsibilities prevented them from taking up voluntary work;
- costs of volunteering - there were instances where voluntary work involved extra expenses such as travel and food, which people on benefit felt they could not afford;
- negative images - the perception of the volunteer ‘do-gooder’ dissuaded some respondents from taking up voluntary work.
Voluntary work as a stepping stone to work
The evidence from this study shows voluntary work to be more of a transitional activity between unemployment and employment, or an indirect route into paid work rather than a direct stepping-stone into employment. Many respondents could see the potential of voluntary work as a way of enhancing job prospects.
Voluntary work had provided a direct stepping-stone for a handful of respondents in the study. Younger people within the study, with a definite work-related focus, tended to see voluntary work as a direct stepping-stone into their chosen career and were using voluntary work in a very focused way. However, for the most part, voluntary activity worked in a variety of indirect - yet positive - ways in helping people back to work. Many shied away from the idea of voluntary work and felt aggrieved at the suggestion of working for nothing.
Comparison with the baseline research
Little change has taken place in the perception of, and reasons for undertaking, voluntary activities since the baseline study was undertaken. However there was some evidence to suggest that volunteering was not as likely to be seen as useful a work-related activity as it had been in the previous study.
The concerns expressed about doing voluntary activities and the perceived barriers to participation were broadly similar to those identified in the baseline research, although an additional barrier, expressed particularly by the men in the study, was that by volunteering they would limit their jobsearch and miss potential work opportunities.
In the present study, the stepping stone effect was less evident in that respondents did not feel that volunteering had necessarily directly led to work, but rather that the voluntary activity was a transitional period that bridged the gap between periods of unemployment, short term contracts and more permanent work.
Relevant publications
G Elam, A Thomas (1997) “Stepping Stones to Employment ”(Department of Social Security Research Report No.71), TSO: London.
A Smith, K Ashworth, R Walker (1998) “Prospects of Part-Time Work: Preparing to Evaluate The Back to Work Bonus ”(Department of Social Security In-House Report No.45), DSS: London.
A Garman, G Redmond, S Lonsdale (1992) “Incomes In And Out Of Work ”(Department of Social Security Research Report No.7), HMSO: London.
A Marsh, R Ford, L Finlayson (1997) “Lone Parents, Work and Benefits ”(Department of Social Security Research Report No.61), TSO: London.
R Sainsbury, S Hutton, J Ditch (1996) “Changing Lives and the Role of Income Support ”(Department of Social Security Research Report No.45), HMSO: London.
A Shaw, R Walker, K Ashworth, S Jenkins, S Middleton (1996) “Moving Off Income Support” (Department of Social Security Research Report No.53), HMSO: London.
D Bottomley, S McKay, R Walker (1997) “Unemployment and Jobseeking” (Department of Social Security Research Report No.62), TSO: London.
S McKay, R Walker, R Youngs (1997) “Unemployment and Jobseeking before Jobseeker’s Allowance” (Department of Social Security Research Report No.73), TSO: London.
L Finlayson, A Marsh (1998) “Lone Parents on the Margins of Work” (Department of Social Security Research Report No.80), CDS: Leeds.
H Trickey, K Kellard, R Walker, K Ashworth, A Smith (1998) “Unemployment and Jobseeking Two Years On ”(Department of Social Security Research Report No.87), CDS: Leeds.
A Marsh, C Callender, L Finlayson, R Ford, A Green, M White (1999) “Low Paid Work In Great Britain” (Department of Social Security Research Report No.95), CDS: Leeds.
(1) The test of actively seeking employment is that a person is taking in any week ‘such steps as he can reasonably be expected to have to take in order to have the best prospects of securing employment’.