Effectiveness of MSD employment assistance 2021/2022

The annual Employment Assistance Effectiveness summary report summarises the Ministry’s evidence on the effectiveness of its employment assistance (EA) expenditure up to the end of the 2021/2022 financial year.

EA evidence catalogue

For more detailed information on specific EA interventions, please visit the EA evidence catalogue

Effectiveness ratings

Effectiveness is based on whether the intervention improves participants’ outcomes relative to a comparison group. Outcomes include employment, income, justice, qualifications, and welfare. For interventions that we can evaluate, they are classified into one of the following categories: 

• Effective: the intervention has significant positive impact on one or more outcome domains and no negative impacts for any other domain.
• Promising: impacts across outcome domains indicates the intervention is expected to have a significant positive overall impact over the medium to long term.
• Mixed: the intervention has both positive and negative impacts on different outcome domains (e.g. positive impact on income support payments, but a negative impact on overall income).
• Makes no difference: the intervention makes no significant difference on any outcome domain.
• Likely negative: based on the trend in intervention impacts, we expect the intervention to have a long-term negative impact on one or more outcome domains.
• Negative: the intervention has a significantly negative impact for one or more outcome domains and no positive impacts for any other.

Not rated interventions fall into either:

• Too soon to rate: there has been insufficient time to judge whether the intervention is effective.
• Not feasible: it is currently not technically possible to evaluate the effectiveness of the intervention using non-experimental evaluative methods.
• Not rated: we have not yet assessed the effectiveness of the intervention, applies to new interventions or where required information on who participates is not yet available for analysis.

Impacts of COVID

The COVID-19 response included new employment interventions to help people and businesses deal with the economic disruption from the pandemic. The largest of these were the COVID Wage Subsidy Scheme and the Apprenticeship Boost Initiative. These two initiatives are not covered in this report.

• The COVID Wage Subsidy Scheme was excluded from the analysis because of its size (about $18.8 billion) and one-off nature. However, MSD is evaluating the effectiveness of Wage Subsidy Scheme itself separately from this report.
• Ministry of Education (MoE) is the policy lead for the Apprenticeship Boost Initiative while MSD delivers the initiative with support from the Tertiary Education Commission.

In addition to new interventions, the COVID-19 response also included the expansion of existing EA interventions such as the Flexi-Wage subsidy and self-employment assistance.

Key Findings

In the 2021/2022 financial year, we estimate MSD spent a total of $831 million on EA interventions (excluding the COVID-19 Wage Subsidy and Apprenticeship Boost). This spend was a substantial increase in expenditure from the pre-COVID period ($531 million in 2019/2020).

Of the $831 million, we could rate 41% of this spend for effectiveness. For the remaining spend, it was either not feasible to rate (52%, mainly expenditure on childcare assistance) or the necessary analysis had not yet been completed (7%, mainly new interventions like He Poutama Rangatahi and Māori Trades and Training Fund).

Of the rated EA interventions, 87.2% of expenditure went on promising or effective interventions, 2.5% was spent on interventions with a mixed rating and 2.8% on interventions making no measured difference (to note, this group includes interventions with small participant numbers, which makes it difficult to identify whether the intervention’s impacts are statistically significant). The remainder (7.4%) of the spend was on interventions with a negative rating and are under active review.