Does welfare-to-work policy increase employment?: Evidence from the UK New Deal for Young People

Welfare-to-work programmes were implemented in several OECD countries during the 1990s. With these programmes, entitlement to unemployment related benefits is conditional on taking up help in finding and actively preparing for work. This paper examines empirically the employment effects of the New Deal for Young People, a welfare-to-work programme for long-term unemployed young people introduced in the UK in 1998. It finds that the programme has reduced measured unemployment among the target group partly by shifting them into non-work activities but also by raising employment.