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Working paper

Evaluation of the impact of the Youth Service: Youth Payment and Young Parent Payment (WP 16/07)

Issue date: 
Friday, 3 February 2017
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Publication category: 
JEL classification: 
I38 - Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
J65 - Unemployment Insurance; Severance Pay; Plant Closings
Fiscal year: 

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This report focusses on the Youth Payment and Young Parent Payment strands of the Youth Service programme.


The Youth Service is a programme administered by the Ministry of Social Development, designed to encourage and assist disadvantaged youth to stay in education and achieve qualifications. There are three main strands of the programme. The Youth Service (YS) is provided to recipients of the Youth Payment (YP) and Young Parent Payment (YPP) benefits, while the YS:NEET service is aimed at disadvantaged young people at risk of becoming detached from employment, education and training. This report focusses on the YP and YPP strands. Community organisations are contracted to provide mentoring and support for youth participating in the service. This is complemented by other changes to youth benefits intended to encourage continued study, including; obligations to participate in the service and in formal study, financial incentives, sanctions for failing to meet obligations, and access to childcare payments.

This paper evaluates the impact of the programme on the educational retention, qualification achievement, benefit receipt, and employment rates of participating youth in the 24 to 30 months after they come onto benefit. Administrative data from the Integrated Data Infrastructure (IDI) is used to measure outcomes. The impacts of the programme are estimated by comparing the outcomes of participants with those of an historical comparison group of youth beneficiaries. This comparison is adjusted to control for other changes over time that could have affected outcomes, using two matched comparison groups of similar young people who were not receiving a youth benefit. Results from the study should be treated with some caution, as they are reliant on a number of assumptions which could not be empirically tested. While we believe these results represent the best that can be done to get at the true impact of the programme, the results may not be robust if the assumptions do not hold.

We find that YS raises enrolment in formal education for young beneficiaries, relative to the previous youth beneficiary case management approach, with the effect being largely sustained over a two-year period for young parents, and a shorter period for other youth beneficiaries. The proportion of YP recipients who complete a level 1 or 2 qualification is raised slightly through participation in the programme, while the impact for young parents occurs slightly later, is larger, and occurs at levels 1, 2 and 3. Participation in the programme appears to raise subsequent benefit receipt rates in the short term, but there is some evidence that it encourages a move off benefit and into work in the medium term (24 to 30 months after starting benefit), especially for YPP participants.


We would like to thank Dean Hyslop for his suggestions on the methods used in this paper; Marc de Boer for his advice on the benefit data; and Marc de Boer, Michelle Bly, Gulnara Huseynli, Dean Hyslop, and Judd Ormsby for their helpful comments on earlier drafts of this paper. The opinions expressed in the report, and any remaining errors remain the responsibility of the authors.


The views, opinions, findings, and conclusions or recommendations expressed in this Working Paper are strictly those of the author(s). They do not necessarily reflect the views of the New Zealand Treasury, Statistics New Zealand, or the New Zealand Government. The New Zealand Treasury, Statistics New Zealand, Ministry of Justice and the New Zealand Government take no responsibility for any errors or omissions in, or for the correctness of, the information contained in this Working Paper. The paper is presented not as policy but with a view to inform and stimulate wider debate.

The results in this report are not official statistics - they have been created for research purposes from the Integrated Data Infrastructure (IDI) managed by Statistics New Zealand. Ongoing work within Statistics New Zealand to develop the IDI means it will not be possible to exactly reproduce the data presented here.

Access to the anonymised data used in this study was provided by Statistics New Zealand in accordance with security and confidentiality provisions of the Statistics Act 1975. Only people authorised by the Statistics Act 1975 are allowed to see data about a particular person, household, business or organisation. The results in this report have been confidentialised to protect these groups from identification.

Careful consideration has been given to the privacy, security and confidentiality issues associated with using administrative and survey data in the IDI. Further detail can be found in the privacy impact assessment for the Integrated Data Infrastructure available from Statistics New Zealand.[1]

The results are based in part on tax data supplied by Inland Revenue to Statistics New Zealand under the Tax Administration Act 1994. These tax data must be used only for statistical purposes, and no individual information may be published or disclosed in any other form or provided to Inland Revenue for administrative or regulatory purposes.

Any person who has had access to the unit-record data has certified that they have been shown, have read and have understood section 81 of the Tax Administration Act 1994, which relates to secrecy. Any discussion of data limitations or weaknesses is in the context of using the IDI for statistical purposes and is not related to the data's ability to support Inland Revenue's core operational requirements.

Last updated: 
Friday, 3 February 2017