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· In 2014, the Israeli Employment Service (IES) initiated the "Employment Circles" pilot program, aimed at assisting income support beneficiaries to integrate into the labor market and preventing long-term unemployment and dependence on support.
· The program was put into operation in 16 IES offices around the country (covering around 40 percent of active work-seekers), and focused on income support beneficiaries. The allocation of participants to the program (the treatment group) was random.
· It was found that 7 months into the program, the share of National Insurance Institute benefit recipients among the treatment group declined by 11-14 percentage points more than among the control group (a decrease equal to about one fifth of the average share in the control group). This was reflected in a cumulative reduction of NIS 1,270–1,450 per participant in combined National Insurance Institute benefit payments.
· It thus appears that the "Employment Circles" program returns its cost to the government in as soon as the first year of implementation.
· The current study is a first stage in the assessment of the program—the research database does not allow examining the integration into the job market that results from participation in the program, but previous studies of similar programs indicate that some of the decrease in transfers may reflect increased employment. Ongoing research assessing the program will be published in the future, and will allow the examination of its contribution to job-market integration and the determination of the total economic benefit resulting from it.
In 2014, the Israeli Employment Service (IES) initiated the "Employment Circles" pilot program, with the goals of assisting income support beneficiaries to integrate into the labor market and preventing long-term unemployment and dependence on support payments.
The program was put into operation in 16 IES offices around the country (covering around 40 percent of active work-seekers), and focused on 18–50 year old income support beneficiaries. In all, through the middle of June 2015, 6,848 individuals participated in the program. The cost to the State is approximately NIS 1,600 per participant.
Participation in the program is a condition for income support eligibility for those selected. The program consists of frequent meetings with designated placement coordinators and participation in a range of workshops aimed at improving employability and providing job search assistance. (The workshops were developed in collaboration with the Tevet initiative of the Joint Distribution Committee—Israel, and were based on the Strive program model that has been in operation in tens of locations worldwide).
The program is conducted in a controlled experimental design: Every week, in each participating IES office, income support beneficiaries are randomly assigned to either treatment (participating in the program) or control groups. The research method allows the precise study of the program’s specific contribution. It is an innovative research design that has rarely been used previously in assessing policy programs in Israel.
Research conducted by Lior Brown of the Bank of Israel Research Department, under the guidance of Dr. Analia Schlosser of Tel Aviv University’s Eitan Berglas School of Economics—as part of an interim report assessing the “Employment Circles” program that is to be published at a later date and will include additional analyses—examined the program’s effect on receipt of National Insurance Institute benefits (such as income support, unemployment benefits, and disability payments). The evaluation of the program’s impact was based on the full set of IES and National Insurance Institute administrative data—a comprehensive and reliable database.
It was found that 7 months after entering the program—the latest period of examination possible, given data availability—the share of National Insurance Institute benefit recipients among the treatment group declined by 11–14 percentage points more than among the control group. This excess decline is equivalent to about one fifth of the average share of recipients in the control group (where some of those receiving allowances at the beginning of the study stopped receiving them as well). Accordingly, cumulative total benefits payments from the National Insurance Institute decreased during the period by NIS 1,270–1,450 per participant (a 12–18 percent reduction relative to the control-group average).
It thus seems that the “Employment Circles” program already returns most of its cost to the government by the end of its first year of implementation. Additionally, to the extent that some of the program participants gained employment, there is an additional economic benefit. The current research serves as a first stage in the assessment of the program, and cannot precisely measure that effect. An ongoing study evaluating the program, which will be published in the future, will allow the determination of its precise contribution to labor force integration.