Evaluating Public-Private Partnerships in Employment Services: The Case of the UK Work Programme

Although there are many public-private partnerships in employment services around the world, relatively little is known about the link between the design and structures of these partnerships and their labour market effects. Here we examine the case of the UK Work Programme (WP), which features considerable flexibility in interventions and offers financial incentives that vary strongly with jobseeker profiles and outcomes. We draw on data on all two million WP participants between 2011 and 2016 and exploit the programme's structure to disentangle the role of the different providers and jobseeker profiles from business cycle and other confounding effects. Our main results are: 1) the WP has a much stronger effect in increasing transitions out of unemployment than increasing transitions to employment, even if its incentives are related to the latter outcomes; 2) the performance differences across providers are small, despite their large number and the flexibility in interventions; 3) although transitions to employment of harder-to-help jobseekers are significantly better rewarded, these individuals still performed significantly worse than participants closer to the labour market.