Did 'Work First' Work? The Role of Employment Assistance Programs in Reducing Long-term Unemployment in Australia (1990-2008)

Abstract

Over the last two decades Australia's progress in reducing its long-term reliance on unemployment payments was disappointing; this was despite an improving labour market, tighter work requirements and reformed employment assistance. After the introduction of the Job Network in 1998, the focus of employment assistance for long-term unemployed people shifted from a human capital approach towards a 'work first' approach. We review evidence from microeconomic evaluations of employment programs. Generally, job search assistance - central to work first - is relatively effective. Gaps in the research may be a reason for the apparent discrepancy between these findings and Australia's slow progress overall in reducing long-term reliance on unemployment payments. Short-term average measures mask the distribution of program outcomes and results over the longer term. As unemployment fell, a growing proportion of unemployment payment recipients were disadvantaged in the labour market, and the work first approach may be ineffective for this group. The paper concludes with a brief assessment of the Job Services Australia program.