Applying Behavioural Insights To Labour Markets
ApplyingBehavioural Insightsto Labour MarketsHow behavioural insights can improveemployment policies and programmesDr Guglielmo Briscese / Cameron Tan
1The Behavioural Insights Team / Applying Behavioural Insights to Labour MarketsContentsAbout this report2Foreword by Dr David Halpern3Acknowledgments4Executive Summary5Job seekers6Employers14Job services20Conclusions25Endnotes26More information28
2The Behavioural Insights Team / Applying Behavioural Insights to Labour MarketsAbout this reportEmployment is one of the most important policyareas that governments manage. Yet, it is onewith ample room for more use of evidence. Dueto location and contextual factors, labour marketpolicies are also often tailored to the economicneeds of a country or region. For these reasons,continuous rigorous testing is needed to make suresolutions are appropriate for local needs.This report looks at the available evidence anddraws out the broader insights learned from thework that BIT and others have done in this space,with an eye to what is practical and universal. Itsobjective is to give policymakers and researchersaround the world a starting point for futureapplications of behavioural insights to labourmarket policies.We have structured the report around the threemain actors in the labour market: Job seekers: the first section summarises insightsfrom trials aimed at helping job seekers finda job Employers: the second section focuses on thedecision-making processes of employers, with afocus on what affects the hiring and retention ofjob seekers Intermediaries: the third section looks at therole of government and other organisationsthat provide employment services, such asjob centresTo end, we present areas where behaviouralinsights can be applied to the labour markets inthe near future.The Behavioural Insights Team (BIT) is a socialpurpose company that is jointly owned by the UKGovernment, Nesta (the innovation charity) andBIT’s employees. BIT was created in 10 DowningStreet in 2010 as the world’s first governmentinstitution dedicated to the application ofbehavioural sciences to policy. BIT aims to improvepolicies and public services by drawing on ideasfrom behavioural science. BIT usually tests andtrials these ideas before they are scaled up, inorder to understand what works and (importantly)what does not work.
3The Behavioural Insights Team / Applying Behavioural Insights to Labour MarketsForewordDr David HalpernCEO of The Behavioural Insights Team andNational Advisor of the UK What Works CentreHelping people back to work has been a focus of BIT efforts since the early daysof the team. It is a clear win-win. If we can help people get back to work faster,it benefits them financially and mentally; reduces welfare costs to taxpayers; andhelps employers, particularly in a tight labour market.There is never a guarantee that an interventionwill work better than existing practice. Thiscertainly applies to employment policies andprogrammes. Governments, employers andemployment agencies have refined and adaptedtheir practices over decades, and in particular inrelation to ‘active welfare policy’ – expecting andencouraging those out of work to actively seeknew employment opportunities.As this report shows, we can now decisivelyconclude that behaviourally-based interventionscan add great value to employment policies. Earlysmall scale solutions and RCTs, were successfullyreplicated in larger regional trials. These in turnhave now been replicated across a number ofcountries, notably the UK, Australia and Singapore– with effect sizes that have strengthened ratherthan weakened.It should be stressed just how important, andrelatively unusual, this is. Many promising resultsfail to replicate at larger scales or secondary sites.This can be due to many factors: later and largertrials may struggle to maintain key aspects of theoriginal intervention; the intervention moves fromhighly motivated originators to less engaged ‘trainthe-trainer’ models; and wider spill-over effectsdilute the original effects (e.g.: early small scalepositive results could result for one person simplytaking a job from another).The strength and successful replication of theseinterventions strongly make the case for furtherscaling, such as to other countries, or closelyrelated areas. The report also helpfully broadensthe perspective on employment interventions,by drawing together solutions built around thejob seeker, and also look at the issue from theperspective of the employer and job serviceproviders. The report does this by looking atthe wider literature alongside BIT trials with ourpartners. It also seeks to step back still further,situating the individual trials in the wider changesthat are occurring in labour markets, and the rolethat governments can play in shaping this.Ultimately, we don’t just want people in work.We want that work to be fulfilling and meaningful;decently paid; and with opportunities forprogression. We want ‘good employers’, whooffer such work opportunities to attract the bestcandidates and to flourish. In this sense, weneed not just to optimise job search activity, butto reduce and remove other behaviourally-basedfailures that prevent the labour market working inthis deeper sense. Fortunately, from what we haveseen so far, we have good grounds to think thatbehavioural science can help us with such issues,to the benefit of all.
4The Behavioural Insights Team / Applying Behavioural Insights to Labour MarketsAcknowledgmentsWe are grateful to the following people forproviding comments on the report: David Halpern,Robbie Tilleard, Lis Costa, Nida Broughton,Rory Gallagher, Zhi Soon, Min-Taec Kim, KateGlazebrook, Stewart Kettle, Ash Morse, EdwardBradon, Tiina Likki, Rony Hacohen, AndyHollingsworth, Johannes Lohmann, MichaelSanders, Alex Gyani, Samuel Hanes, NickyQuinn, Elspeth Kirkman, Ben Curtis, and JoanneReinhard. We would like to thank Ross Haig, LauraMoyce, and Jo Yuen for their assistance on thedesign and communication of this document.The trials summarised in this report are the resultof the collaboration between BIT and its partners,with whom we had the privilege to collaborate.In particular, we would like to thank the AustralianDepartment of Jobs and Small Business, the UKDepartment of Work and Pensions, and theSingapore Ministry of Manpower.Last, but most importantly, we would like to thankthe job seekers we interviewed and that took partin our trials, as well as the management teams andfrontline staff of the job service providers that havecollaborated with us to test these new approaches,including Konekt (previously Mission Providence)and Advanced Personnel Management inAustralia, and Jobcentre Plus in the UK.
5The Behavioural Insights Team / Applying Behavioural Insights to Labour MarketsExecutive SummaryA job is more than a source of income. It gives youa sense of identity, social inclusion, and contributesto positive health and wellbeing. For societies as awhole, a low unemployment rate can mean greaterpurchasing power for citizens, and higher politicalstability, among other benefits. This is why theunemployment rate is considered a key indicatorof the economic health of a country. Creating anefficient labour market, however, is not easy. Howwell the market works depends on the behaviours(and biases) of many stakeholders.subsidies for employers; and (ii) penalties, such asthe removal of unemployment benefits in case ofjob seekers’ non-compliance.As employment is one of BIT’s longest standingareas of work, we have seen how behaviouralinsights can improve these existing approaches,and offer alternative solutions that place peopleand their decision-making at the heart of the system.One of the key lessons from our work is that todesign effective employment policies, governmentsmust improve their understanding of how jobTo improve employment outcomes from aseekers and employers make decisions, and howmicroeconomic perspective, governments havehistorically relied on two approaches: (i) incentives, they interact in the labour market, including throughsuch as relocation vouchers for job seekers or wage job service providers.What works:Job seekerEmployerJob service providersPersonalise assistance andcommunication based onjob seekers’ needs andpreferencesIncrease employers’transparency by releasing salaryranges, allow workers to rateemployers, and encourage aculture of continuous learningand upskilling for those in workDesign the right mix of financialand social incentives foremployment advisors, and leverageon market design principles toencourage greater openness inthe job service market
The Behavioural Insights Team / Applying Behavioural Insights to Labour Markets / Job seekers6Job seekersPersonalise assistance and communication basedon job seekers’ needs and preferencesFor most job seekers, unemployment is not achoice. There can be many reasons for this. Someare specific to the individual, such as their personalskill level or their history of unemployment.1 Otherreasons might be unforeseen, such as the suddenloss of a job due to restructures or failures of anemployer. Unemployment also affects differentpeople in different ways, depending on individualcircumstances (e.g. family wealth) or the availablegovernment safety nets. It is also affected by thebehaviours of the individual, such as their level ofresilience. Whatever the reasons, solutions mustbe timely to place job seekers into employmentquickly and prevent them entering a spiral ofsocial exclusion.Key lessons learned:123F ocus on people, not processes: Shift the focusof employment services from administration torelationship building, and from compliance tojob goals.Make communications simple and clear: Design simple, but effective prompts usingexisting communication channels to improvejob seekers’ job search behaviour. ive tailored assistance to job seekers: TailorGthe intensity and type of assistance (e.g. onlinevs offline) depending on the job seeker’spreferences and needs, and use administrativedata to draw preferences and barriers(e.g. time constraints).Employment policies that focus heavily on jobseeker compliance, rather than successful jobplacements, can contribute to this demotivationspiral. They can cause the job seeker-employmentadvisor relationship to become negative andunproductive. Similarly, other bad experiences canhave a dampening effect on motivation, such asrepeated unsuccessful job applications, or nonconstructive feedback from interviewers.3In this section, we examine how a betterunderstanding of the experiences and behavioursof job seekers, and their interactions withemployment services, can help improve policyoutcomes. Whilst unemployment experiencesdiffer among job seekers, for simplicity, we havesummarised results based on the typical ‘journey’of an unemployed person, from the first meetingwith an employment advisor to retaining a jobover time.
7The Behavioural Insights Team / Applying Behavioural Insights to Labour Markets / Job seekersImprove job seekers’ motivation to look for workFor many people, personal and professionalnetworks are the best way to access new jobopportunities. For many others, specifically thosewho are more disadvantaged, some form ofassistance from an employment advisor can be ahelpful way to become job ready, improve theirjob applications, and connect with would-beemployers.As a result, the interaction between a job seekerand their employment advisor is very important,particularly for maintaining job seekers’ motivation.This is true despite differences in how labourmarkets are designed in different countries, andwhether employment services are delivered bygovernment agencies or private providers.The support job seekers receive can be effective ifthe focus is on employment goals. But due to thelocal policy context, the role of an employmentadvisor can become focused on monitoring jobseekers’ compliance. Often this is driven by equityconcerns, to ensure only those who are mostdeserving receive unemployment support, but it canharm those genuinely in need of assistance.A number of studies have linked goal-orientationand productive job seeking behaviours. Thesestudies also found that job seekers with highgoal-orientation had higher levels of job seeking‘intensity’,4 leading to an increased likelihood offinding employment. Other studies have found thatparticipation in workshops designed to developgoal-orientation increased reports of positive jobsearch intentions, and engagement in job-searchbehaviours.5 Similarly, studies have found thatextensive processing times significantly reducedlong-term workforce participation and earnings forapplicants applying for disability benefits.6In a trial in Jobcentre Plus in the UK wedemonstrated that focusing on goal-orientationand reducing administrative processes can bebeneficial. Our intervention was designed to refocus job seeking meetings from penalty avoidanceto job attainment. This is supported by the evidencearound the positive effects of ‘performanceapproach’ goals.7 By shifting the focus to jobattainment, employment prospects become moreimportant than the need to focus on penaltyavoidance. Key elements and results of this trialare summarised in case study 1 on page 8.While there are differences in the way job servicesare delivered around the world, almost all sharesimilarities. For example, most of them providesupport through ‘job centre’ style facilities, wherejob seekers meet regularly with employmentadvisors to discuss job opportunities. As a result,we felt that the key elements of our intervention inthe UK could be used with some adaptation in adifferent contexts.One example of this is a trial done in partnershipthe Singaporean Ministry of Manpower and theSingaporean Word Development Agency. In thisproject, we tested the ‘commitment pack’ at aCommunity Development Centre. In addition, wealso redesigned the physical environment in whichthe jobseeker and employment advisor met. Forexample, we put up a chart displaying the numberof successful job seekers who found employmentthrough the centre, to leverage on social norms.The trial found that 49.4% of job seekers in theintervention group found work, whereas only32% of the control group did (a 7.4 percentagepoint, or 23% difference). If implemented acrossSingapore and if the impact remained similar, ourintervention would lead to an estimated 4,000more successful job placements within threemonths. This result further supports the evidence thatthese approaches can be effective when replicatedin very different system and cultural contexts.
8The Behavioural Insights Team / Applying Behavioural Insights to Labour Markets / Job seekersCASE STUDY1Shifting focus from compliance to job goalsIn 2012, we worked with Jobcentre Plus inLoughton, Essex (UK) on a project aimed at gettingjob seekers into work faster.Through fieldwork, we discovered that therelationship between job seekers and employmentadvisors was focused on compliance. This was thecase from their first meeting, and it was clear thatover time this caused job seekers to lose motivationand begin to put in the minimum required effort tocomply rather than look for work.To change this, we shifted the emphasis of the jobseeker-employment advisor relationship to findingemployment. As initial contact with a serviceshapes later perceptions, we made sure theirfirst meeting was outcome-focused. We did thisby streamlining administrative tasks and askingemployment advisors to move their computers toone side to make interactions more personable.In addition, we helped job seekers set stretching,but achievable job search goals. Previously,these meetings were centred on paperworkdocumenting that job seekers were completinga minimum of three job search activities over thepast week or fortnight, Drawing on the researchon implementation intentions,8 we designed a‘commitment pack’ that focused on encouragingjob seekers and coaches to work together toagree on specific goals in the immediate future.This meant that rather than just retrospectivelyreporting behaviour anchored on minimumrequirements, job seekers instead created specificand actionable forward-looking goals. We alsoused resilience-building exercises to combatdifficulties with maintaining motivation, such as selfidentifying personal strengths.We tested this set of interventions on a small scaletrial in one job centre in Loughton, and then scaledup the commitment packs across 12 job centresin Essex (n 110,838). We found that more than1,880 job seekers in the treatment group acrossthese 12 centres became independent of incomesupport faster than the control group (a 3% - or1.7 percentage point - improvement) over the11 months of the trial.On the back of these results, we worked with theDepartment for Work and Pensions to scale up theintervention. We worked with Job Centre staff inthe North-East of England to make sure that thesetools could be integrated into nationwide businessas usual systems, through the creation of ‘MyWork Plans’.We then supported the training of 25,000work coaches through a train-the-trainers model,to ensure staff across the UK could deliverthese new behaviourally-informed techniqueseffectively. Roughly 800,000 people are claimingunemployment benefits in the UK at any one time,so these tools have now supported millions of jobseekers in the UK to look for and find work.Scaled upacrossthe UKCompliance FocusMy Work Plan
9The Behavioural Insights Team / Applying Behavioural Insights to Labour Markets / Job seekersIncrease attendance at recruitment fairsIf a regular meeting with an employment advisorcan be challenging for job seekers, talking toprospective employers can be even more daunting,especially for those who have not attended a jobinterview in a long time.In the UK, job centres often hold recruitment eventsin partnership with large employers who hire inbulk, making the likelihood of finding a job at anevent high. Despite this, job seeker attendanceat these events is often low. We ran a trial to testwhether personalised text message reminders canincrease attendance at such events. As shownin case study 2 on page 10, a behaviourallyinformed text message outperformed a morefact‑based message by more than twofold.Both one-off and ongoing text-message remindershave been shown to be effective across abroad range of policy domains, such ashealth,9 court attendance,10 and voter turnout.11Manipulating certain features of text reminders,such as how much they are personalised12, canincrease their effectiveness compared to a moregeneric messages.Another indicator of the efficacy of a text messagereminder is what happens when a text is missedby a job seeker. In Australia, most job seekerswho provide a mobile number to their job serviceprovider are sent a text message reminder oneday before their regular appointment with theiremployment advisor, having received a formalnotification previously. Due to an unanticipatedtext message outage in late 2016, approximately55,000 reminders were not sent. This outageallowed for a statistically significant naturalexperiment, and analysis by the AustralianDepartment of Jobs and Small Business showedthat the outage led to an average increase in the‘Did Not Attend’ rate of 8 percentage points (from18% to 26%). This confirms previous studies on thehabituation of text messages, but is also evidenceof their importance, especially from a cost-benefitpoint of view.
10The Behavioural Insights Team / Applying Behavioural Insights to Labour Markets / Job seekersCASE STUDY2Using reciprocity and personalisation to increaseattendance at a recruitment fairWe worked with the UK Bedford Job Centre to increase attendance at recruitment events and help morejob seekers connect to potential employers. In our trial, we tested different versions of a text messagereminder sent to 1,224 job seekers the day before their appointment. The variations tested were:GroupMessageControlA simple fact-based me
behavioural science can help us with such issues, to the benefit of all. Dr David Halpern CEO of The Behavioural Insights Team and National Advisor of the UK What Works Centre Helping people back to work has been a focus of BIT efforts since the early days of the team. It is a clear win-win. If we can help people get back to work faster,
behavioural science researchers have helped reveal the often hidden forces that shape our decision making. Behavioural science offers . in practice to improve demand-side management, the broader approach to applying behavioural insights can be used for a host of different
develop behavioural science solutions. Test, Learn, Adapt – This is the framework developed by the Behavioural Insights Team as part of the Test phase to help practitioners test what works and improve what doesn’t. 4 Behavioural Science in Practice Executive Education 5 Morning schedule Introduction to key concepts
Applying behavioural insights to drug policy and practice: opportunities and challenges . Sara Rafael Almeida . Joana Sousa Lourenço . Emanuele Ciriolo . Joint Research Centre, European Commission, Foresight, Behavioural Insights and Design for Policy Unit, Rue du Champ de Mars 21, B-1050 Brussels, Belgium
behavioural insights to increase referrals report and recommendations (September 20171 Overview of the intervention The interventions were designed using behavioural insights techniques. Behavioural Science is the study of how people make decisions in real life, which recognises that people often behave in ways that are
06he challenges facing business policymakers T 07he need to take a behavioural approach T 08 New frontiers in applying behavioural insights to business policy . fundamentally change the dynamics of markets, aligning the incentives of suppliers with those of customers to generate ongoing productivity gains.
It is a deep irony that, of all policy areas, behavioural economics has been little applied to economic policy. This . Undertake rapid testing using online experiments before rolling out new policies . was still in its infancy. Since then, over the past decade, insights from the behavioural sciences have delivered
Behavioural policy implications 13 The structure of Behavioural Economics and Finance 14 A note on mathematics 16 Further reading 16 Some introductions to behavioural economics 16 Behavioural game theory/classical game theory 16 Experimental economics 17 Experimental software 17 2
Keywords: Korean, heritage language, multiliteracies, university-level language classroom, multimodal reading response Journal of Language and Literacy Education Vol. 11 Issue 2—Fall 2015 117 eritage language (HL) learners1 who are exposed to and speak a language other than English exclusively in their homes and communities exhibit relatively lower reading and writing skills compared to .
