Exit doors should lead to sustainable paths

Kieran Madden


Auckland, September 10, 2018
Imagine if receiving a benefit was like being in a waiting room, with a number of doors along one wall, all indicating exits out to new opportunities: one sign saying ‘work,’ another ‘training’ and ‘education.’
Opposite this wall of doors, is an entry door, the one people use to walk into the room when, for one reason or another, they begin receiving a benefit.
MSD Report revelations
A recently-published report by MSD, commissioned by the previous National-led Government, tracked the movement of 133,000 people who left through one of the exit doors over a one year-period from June 2013.
Like someone clicking a tally counter to count punters entering an event, the report helps us answer the questions: what happens to people when they leave the benefit system? After exiting, how many come back around through the entry door?
These questions are critical. While the previous Government’s target was simply getting working-age people off benefits, what we should truly care about—and therefore measure—is getting New Zealanders into sustainable, long-term work where possible.
Returning for benefit
So, what did the report find? Most people left through the work and education doors. After 18 months, almost half of those who left the room returned to the benefit through the entry door, with males, youth, Māori, and those in the regions more likely to be part of this group. At face value this doesn’t sound promising, with commentators negatively reporting headlines like: “moves to push people into employment are failing.” But whether they are failing or not depends on the baseline.
Fortunately, we have data from 2010/11 to compare.
Increasing numbers
When we compare the 2013 data to the 2010/11 report, we can see that the “proportion of people who left a benefit to go into employment with substantial earnings increased by approximately 2.5%.”
An improvement yes, but surely we can do better than this, particularly when this increase was in part due to improved economic conditions and also partially as a result of the previous Government’s welfare reforms which focused on getting sole parents into work.
Disturbing figures
How about training and education, do these doors often lead into long-term work? The report found that 55% of those who went out these doors returned in time; 57% for tertiary study, 45% for training. Only 28% of those were in work 18 months later. These figures are troubling too, particularly for tertiary education.
If you thought leaving a benefit led to getting long-term work more often than not, think again. If you thought education and training were sure-fire ways to get into work, you are wrong. We have a lot of ground to cover to improve these outcomes, but thanks to this quality research—that both asks the right question and is comparable over time—we can see much more clearly where we are falling short and make some evidence-informed changes.
Unless we want to install a revolving door for those returning to benefits, let us make sure that the exits are leading down sustainable paths.
Kieran Madden is a Researcher at Maxim Institute based in Auckland.

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