It is said that welfare benefits received by households headed by working-aged people increased during the global financial crisis and the COVID-19 pandemic (Zhou and Suzuki, 2012, and Ando and Furuichi, 2022). For example, the number of households classified into the “other types of households” category (households that do not fit into any of the following categories of households covered by public assistance; elderly households, households headed by persons who cannot work due to illness or injury, households headed by disabled persons, or single-mother households), which amounted to 122,000 households in 2008, when the global financial crisis erupted, rose to 172,000 in 2009, increasing by as many as around 50,000 in just one year, and five years later, in 2013, the number reached 285,000 households, more than double the level before the global financial crisis (Note 1). Since before the crisis, case workers that provide public assistance services have helped people who are receiving welfare benefits to find a job. Local governments have been providing employment support on their own or in cooperation with the national government. However, against the backdrop of the rise in the number of public assistance recipients whose members are likely to be capable of working, such as those classified into the “other types of households” category, the importance of providing employment support for people who are receiving welfare benefits is increasing. As a result, since FY2015, employment support counters at the Public Employment Security Office operated by local governments are providing one-stop services for people facing difficulties in finding a job, including those who are applying for welfare benefits, as well as needy people under the Program to Promote Employment and Independence of Public Assistance Recipients and the Program to Provide Employment Support to Public Assistance Recipients. In addition, the Program to Support Public Assistance Recipients in Preparing for Employment has supported people who need to prepare for employment through activities such as providing them with guidance on how to improve daily habits and vocational training and through giving them opportunities to observe workplaces and engage in volunteer activity (Note 2). However, the effects of those programs have not been strictly verified. A large sum of funds, approximately 15.9 billion yen (Note 3), was allocated to the Program to Promote Employment and Independence of Public Assistance Recipients, the Program to Provide Employment Support to Public Assistance Recipients, and the Program to Support Public Assistance Recipients in Preparing for Employment in FY2019, so it is considered necessary to conduct strict verification of the programs. This column provides a brief explanation of the analysis method used for the verification of the effects of the programs and reviews the current situation in reference to preceding studies.
How can the effects of employment support programs be verified?
In order to conduct strict analysis of the effects of the employment support programs, panel data at multiple points in time based on individual datasets are necessary. In addition, there are two important points to remember. The first is that participants in the employment support programs and non-participants must be compared. Let us assume that the evaluation of the programs’ effects based on data concerning only participants in the programs showed a rise in the employment rate among those people. In that case, if the analysis period corresponds to an expansionary phase of the economic cycle, the result may be merely reflecting the economic conditions at that time.
The second important point is that analysis that takes into consideration individual attributes that may affect employment, such as age, capabilities, and motivation, must be conducted. That is because participants in the employment support programs are different from non-participants in the first place in various aspects, including the abovementioned attributes. Even if the employment rate is higher among participants than among non-participants, that may be merely reflecting differences in those attributes, rather than the effects of the programs.
Implications from preceding studies
Tamada and Otake (2004), using aggregated cross-sectional data concerning the 44 cities in Osaka Prefecture, showed that measures such as providing career development seminars, information on job openings, and holding job fairs do not affect the employment rate. Michinaka (2009), who conducted evaluations based on data concerning participants in an employment support program operated by a certain local government found that only about a third of participants found a job, with most of those employed as part-time workers, and concluded that it is rare that finding such jobs removes the need for public assistance in the case of people who are receiving welfare benefits. Shikata (2013) analyzed trends in the employment rate based on data concerning participants in employment support and vocational training programs operated across Saitama Prefecture, excluding Saitama City. This study suggests the presence of selection bias for people who are likely to find a job in the process of accepting applications for the programs because the program operators are required to clear a certain threshold in terms of the employment results achieved. The abovementioned studies used either aggregated cross-sectional data or data regarding only participants in employment support programs for their analysis and evaluation. On the other hand, Matsumoto (2022), using local government data, including information regarding non-participants in employment support programs operated in collaboration with the Public Employment Security Office, conducted a comparison between program participants and non-participants. Moreover, Matsumoto (2022) conducted an analysis in which differences in individual attributes, including age and the level of support designated by the welfare office for each beneficiary (a substitute for attributes such as capability and motivation), were controlled under the propensity score matching method. As a result of following up on the participants’ situation in the two-year period from their participation, it was found that the employment rate rose among households classified into the “other types of households” category. However, the study concluded that the effects of the employment support programs were not strong enough to help overcome the need for public assistance.
Future challenges for evaluating employment support programs for people receiving welfare benefits
It would be premature to conclude that employment support programs for people who are receiving welfare benefits are not effective enough to help them overcome the need for public assistance. The analysis by Matsumoto (2022) did not cover single-mother households in which the mother is capable of working if the right conditions are in place. In addition, that analysis was focusing on employment support programs operated in collaboration with the Public Employment Security Office. However, some local governments provide employment support not only by collaborating with the Public Employment Security Office but also by providing training necessary for work in general as the first step toward workplace participation and employment under the Program to Support Public Assistance Recipients in Preparing for Employment. Past Japanese studies have not conducted strict analysis focusing on such training (Note 4). According to a foreign study by Card et al. (2018), programs that facilitate accumulation of human capital, such as training and education programs, produce greater effects a few years after their completion than at earlier times. Moreover, among people receiving welfare benefits, there are those who require a certain period of time before they become truly independent through employment because they not only require training and education but also face challenges in everyday and social life, such as those with personal communication problems or a lack of work experience. As a result, support programs may take time before they produce tangible effects. The Social Security Council under the Ministry of Health, Labour and Welfare has argued that it is necessary to strengthen efforts to help people who are receiving welfare benefits to gradually become independent in preparation for employment while conducting a careful assessment of the problems they face through surveys with those people (Note 5). In future studies, it will be necessary not only to implement detailed research by type of employment support but also to pay attention to households other than “other types of households” and conduct a long-term analysis using a large and diverse sample group.
June 27, 2023
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