aija kettunen economic analysis
TRANSCRIPT
![Page 1: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/1.jpg)
www.diak.fi www.diak.fi
Economic analysis of active labour market
measures
- testing applicability of simple decision
modelling
EU-HEMP workshop, 21 May 2015, Helsinki Aija
Aija Kettunen
Diaconia University of Applied Sciences
![Page 2: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/2.jpg)
www.diak.fi www.diak.fi
Acknowledgements
Group
– Tuula Pehkonen-Elmi
– Anne Surakka
– Keijo Piirainen
Funding
– The European Social Fund
– The Centre for Economic Development, Transport
and Environment, North Karelia
Co-operation
– Researchers in the University of Eastern Finland
Aija Kettunen
![Page 3: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/3.jpg)
www.diak.fi www.diak.fi
Content
• Long-term unemployment and active labour market
measures/services/intervention in Finland
• Simple decision modelling
• Testing with two labour market measure
• Conclusions, suggestion
![Page 4: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/4.jpg)
www.diak.fi www.diak.fi
A lot of measures to improve
employability of long-term
unemployed
Employment has not advanced
It’s difficult to study effectiveness of employment measures
e.g.
– demand of labour differ widely between regions and
– same persons re-enter the intervention
But …
… should we be interested in social outcomes to prevent
exclusion – not only employment – of the long-term
employed?
![Page 5: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/5.jpg)
www.diak.fi www.diak.fi
Number of persons in Employment measure in Finland
Persons, in average per year Pay subsidised employment
Job alternation leave primary
Work training / work life training
Employment training
Rehabilitative work activity
Self-motivated education
Other training (valmennuksessa)
Work or education trial
![Page 6: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/6.jpg)
www.diak.fi www.diak.fi
Number of persons unemployed more
than 2 and 1 years unemployed
Unemployed more than 2
years
Unemployed more than 1
year
'000 persons, in average per
year
![Page 7: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/7.jpg)
www.diak.fi www.diak.fi
A lot of money for employment
services
In Finland
State budget
- Labour market services about 600 million € / 2015
European Social Fund (2014-2020, with Finnish funding)
- Promoting employment and social inclusion, investing in
education and skills about 200 million € / year
+ Employment services by local municipalities
![Page 8: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/8.jpg)
www.diak.fi www.diak.fi
Are the measures/services for
long-term unemployed ”good use
of public money”?
How to study?
Economic evaluation?
No possibility of RCT-study
In England simple-decision modelling to study economic
consequences of e.g.
– mental health promotion, community capacity
building and social care interventions
![Page 9: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/9.jpg)
www.diak.fi www.diak.fi
Simple decision modelling to
evaluate employment services for
long-term unemployed
Test-measures/services:
- for long-term unemployed, who need a particularly great
deal of support
- aimed to prevent exclusion as well
Highest-level increased pay subsidy
– 7 employment projects, 273 participants
Rehabilitative work activity
– national level, 17 000 participants, 2011
Time horizon: the intervention and one year after it
2011 price level
![Page 10: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/10.jpg)
www.diak.fi www.diak.fi
How it goes? The phases:
1. Pathways that produce the economic consequences justification for the model: literature and experts
– How clear are the pathways?
2. Data on costs and outcomes, probabilities of participants achieving different outcomes and the benefits and savings related to the outcomes: various sources, discussed the (missing) data with experts
– Are there data?
3. Populating the model and calculations
– estimates of the economic consequences of the evaluated services with available data
4. Describe what data should be produced for the model to provide better estimates
![Page 11: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/11.jpg)
www.diak.fi www.diak.fi
The pathways producing economic
consequences
![Page 12: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/12.jpg)
www.diak.fi www.diak.fi
Employment pathway
- Was possible to find follow-up data, but
- not on effectiveness
- Costs – challenging but possible
- Productivity gain - challenging
![Page 13: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/13.jpg)
www.diak.fi www.diak.fi
Wellbeing and other pathways
Wellbeing pathway
- Little data on health and other
wellbeing outcomes,
qualitative
- The connection between
wellbeing and services
utilisation using national
survey data (Health 2011, Thl)
- Quality of life (EuroHIS-Quol
8) and Coherence scale
Antonovsky SOC-13
Connected to mental health
services
Didn’t include
Education pathway
- Benefits later
Didn’t include
Participation pathway
- Interesting – social inclusion
- didn’t find any data to populate
the model
![Page 14: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/14.jpg)
www.diak.fi www.diak.fi
Costs and economic consequences of highest-
level increased pay subsidy case, n=273, the
period of the measure and the following year
Cost or consequence Calculation €
Measure1, (additional) cost (8.1 mth, n=273) 273 x 8,1 x (286.01 + 19.22) 674 955
Income transfers, additional cost (highest-level increased pay subsidy – labour market subsidy) 273 x 8.1 x (1051.48 - 609.59) 977 151
Savings after measure (one year)
-income transfers
13.7% in pay-subsidised employment2 (labour market subsidy - standard pay subsidy) 37 x 12 x (609.59 – 553.41) -24 944
7.1% in open labour market 19 x 12 x 609.59 -138 987
- mental health care services 3 -371
Net costs 1 487 804
Productivity gain
During measure (8.1 mth, n=273 )4 273 x 8.1 x 1051.48 2 325 138
After measure
- pay-subsidised employment (12 mth, n=37 )5 37 x 12 x (1071 x 1.04 x 1.2179) 602 306
- working in open labour market (12 mth, n=19) 19 x 12 x (1796.90 x 1.04 x 1.2179) 518 924
Productivity gain 3 446 368
Net benefit productivity gain - net cost 1 958 564
![Page 15: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/15.jpg)
www.diak.fi www.diak.fi
Distribution of the income transfer and wage costs
and benefits of the highest-level increased pay
subsidy
(the period of the measure and the following year)
![Page 16: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/16.jpg)
www.diak.fi www.diak.fi
Costs and economic consequences of
rehabilitative work activity case, n=17 000, the
period of the measure and the following year
Cost or consequence Calculation €
Measure1, (additional) cost (5.63 mth, n=17 000) 17 000 x 5.63 x 856.62 81 987 162
Additional income transfer cost2 17 000 x 5.63 x (733.15 – 609.59) 11 825 928
Costs after measure (one year)
- 25% continue in rehabilitative work activity 4 250 x 5.63 x 856.62 20 496 775
- additional income transfer cost 4 250 x 5.63 x (733.15 - 609.59) 2 956 482
- 3% employed under the highest-level increased pay subsidy system3 510 x 8.1 x (286.01 + 19.22) 1 260 905
- pay subsidy (highest-level increased) 510 x 8.1 x 1,051.48 4 343 669
Savings after measure (one year)
- income transfers
- 3% employed under the highest-level increased pay subsidy system 510 x 8.1 x 609.59 -2 518 216
- 1% employed in the open labour market 170 x 12 x 609.59 -1 243 564
- mental health care services 4 -23 102
Net costs 119 086 039
Productivity gain
During measure (5.63 mth, n=17 000 )5 17 000 x 5.63 x 0.3 x (1 450 x 1.04) x 1.2179 52 734 101
After measure
- in rehabilitative work activity (5.63 mth, n=4 250) 4 250 x 5.63 x 0.3 x (1 450 x 1.04) x 1.2179 13 183 525
- pay-subsidised employment (8.1 mth, n=510 )6 510 x 8.1 x 1 051.48 4 343 664
- employed in the open labour market7 170 x 12 x (0.7 x 2 774) x 1.04 x 1.2179 5 017 410
Productivity gain 75 278 700
Net benefit productivity gain - net cost -43 807 339
![Page 17: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/17.jpg)
www.diak.fi www.diak.fi
Distribution of the income transfer and wage costs
and benefits of rehabilitative work activity
(the period of the measure and the following year)
![Page 18: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/18.jpg)
www.diak.fi www.diak.fi
Conclusions, suggestions
Simple decision modelling - a beneficial approach
Decision-makers want this kind of information, but
- Big challenges with data … we need to …
Develop measures for other than employment outcomes
Follow-up other than employment outcomes
Robust effectiveness studies
Statistical analysis: combining national data sources
Evaluation on the project and service level (costs and
outcomes)
And then … again …
![Page 19: Aija kettunen economic analysis](https://reader038.vdocuments.net/reader038/viewer/2022103117/55b3c90bbb61ebd7548b473d/html5/thumbnails/19.jpg)
www.diak.fi www.diak.fi
Thank you!