Active Labour Market Programs in Ontario – A need to better tailor job programs

About 450,000 Ontarians are on social assistance, costing the province $2.8 billion annually, according to a new study from the C.D. Howe Institute. In ‘Assessing Active Labour-Market Programs: How Effective is Ontario Works?’ authors Jason Adams, Ken Chow and David Rosé examine the success of various Ontario Works programs in getting welfare recipients back into the workforce.

Using data from the Ontario Ministry of Community and Social Services, the authors examined the short- and long-term effectiveness of different types of employment assistance programs over the 2003-2013 period. These programs range from structured job searches and independent job searches to training programs and direct job placements. The authors measure the impact of each on the time spent on social assistance and the one- and two-year return rates, relative to having recipients search for work independently.

The authors found that outcomes varied depending on the type of assistance, and that different types of assistance are not necessarily complementary to one another. Participation in job-search workshops or training programs are individually effective for reducing the length of time collecting benefits; however, somewhat surprisingly, a combination of workshops and training with a structured job search actually increases the length of time on benefits by 4.6 months. “This result suggests that the average recipient is better off being assigned only to a training program rather than also being assigned to a structured job search, or vice versa,” says Adams.

When used on their own, direct job placements add 16.6 months to the time spent on social assistance but reduce the rate at which people return to social assistance.

The report finds there is a trade-off between the long- and short-term effects of the programs, and the Ontario government needs to better tailor its job programs by emphasizing assignment to programs whose effects suit its goals. For instance, if the government’s strategy was to get people off social assistance, it could increase assignment to either job-search workshops or training programs, while if the aim is to reduce the probability of people returning to social assistance, they could focus on direct job placements.

Main points

• The Ontario Works social assistance program assigns bene ciaries to employment assistance activities intended to prepare them for nding and maintaining employment. Ontario Works provides income support to a substantial swath of the population: approximately 449,000 bene ciaries (over 3.3 percent of the population) received some form of assistance from Ontario Works in 2016.
• Using an administrative dataset from the Ontario Ministry of Community and Social Services, we examine the short-term and longer-term effectiveness of different categories of employment assistance programs over the 2003–13 period.
• After accounting for selection in enrolment and other relevant omitted variables, we find a significant differential impact on both spell durations (time on social assistance) and one- and two-year return rates (return to social assistance) across programs.
• This finding implies that there is a tradeoff between short- and longer-term effectiveness across programs. Our results suggest that the Ontario government may be able to achieve better outcomes by emphasizing assignment to the programs that achieve its policy goals.

Chosen excerpts by Job Market Monitor. Read the whole story at Research: Assessing Active Labour-Market Programs: How Effective is Ontario Works? | C.D. Howe Institute