Experimental evaluation of YP4 - Is 'joining up' services for homeless and jobless people a net benefit to society?

The objective of this project is to undertake a cost-benefit analysis of the YP4 trial. The YP4 trial is a program to provide integrated delivery of employment, housing, health, educational and personal support services for young homeless jobseekers in Victoria.

The YP4 trial

The YP4 trial is an initiative of four not-for-profit organisations: Hanover Welfare Services; Melbourne Citymission; Brotherhood of St. Laurence, and Loddon Mallee Housing Services. (The YP represents young people. The 4 refers to the four ps: purpose (a job); place (a home); personal support (offered by the project); and proof (evaluation).

A long-standing concern in implementation of welfare policy has been coordination of opportunities for and service delivery to individuals who have multiple sources of disadvantage. For example, Perri (2004, page 1) has described the problem of improving horizontal coordination of policies as an eternal one that dates back to the Chadwickian reforms of British local government in the 1830s. Most recently, efforts in this direction have been referred to as joining up.

Integration of service delivery has also been seen to be a potential area of improvement of policy implementation for young homeless jobseekers in Australia ( Campbell, 2003). Benefits of integration are perceived to include: allowing participants to access services in an order that maximises impact rather than moving through programs in a strictly linear order; a coordinated approach to improving outcomes for individuals with multiple sources of disadvantage where addressing all sources of disadvantage simultaneously is necessary to improve any single outcome; and tailoring services to specific circumstances of the target population. For example, in the case of homeless jobseekers, without addressing the problem of stable housing, it may be difficult to provide the basis for stable employment; but equally, the absence of stable employment may make it impossible to achieve a stable housing outcome.

The YP4 trial is a response to the perception that there is scope for improved horizontal policy coordination for young homeless jobseekers. The conception of the trial is described in Horn (2004). In the trial 240 homeless jobseekers on NewStart or Youth Allowance are being offered entry to the trial for up to 2 years. The trial will focus on four geographic regions in Victoria where the partner organisations have established infrastructure and strong networks in local communities (Greater Bendigo; Melbourne CBD and inner west; Middle south of metropolitan Melbourne; and Outer south of metropolitan Melbourne). It is intended that one-half of the participants in the trial will be aged 18 to 25 years; and a specified number of places will also be allocated to indigenous jobseekers experiencing homelessness in rural Victoria.

The main objectives of the YP4 trial are to:

The key components of services delivered through YP4 will be:

To enable a high-quality evaluation of the YP4 trial, it is being implemented as a random (or social) experiment. In each of the four geographic locations homeless jobseekers eligible to participate are being identified, and then randomly assigned as either participants or non-participants in the trial. At each location the objective is to have 120 eligible participants of whom 60 would be assigned to participate in YP4, and 60 would constitute the control group.

Experimental evaluation is usually considered to be the gold standard for program evaluation. Random assignment implies that a comparison of mean outcomes between the trial participants and non-participants will provide an unbiased estimate of the causal effect of the trial on participants. However, difficulties in implementing experimental evaluations have also meant that the method has not been universally accepted as the best method of program evaluation, and it is an essential part of empirical analysis to validate any application of a randomised trial (see for example, Smith, 2000).

Recruitment of the sample for the YP4 trial (participants and control group) has commenced in the second quarter of 2005, and is expected to continue until the end of the third quarter. All participants will be able to spend a maximum of two years in the program, so that the program would be expected to have concluded for all participants by late 2007. It is planned to collect data on outcomes for YP4 trial participants and the control group during the period of the program, and also in post-program periods.

Cost-benefit analysis and its application in this project

Cost-benefit analysis involves estimating the value of benefits and costs to society from a program or policy. In this project application of cost-benefit analysis will involve three main stages: (a) Identifying the main sources of costs and benefits associated with the YP4 trial; (b) Calculating an estimate of the monetary value of each specific benefit and cost; and (c) Aggregating estimates of costs and benefits to calculate the cost-benefit ratio for the program.

The main potential benefits of the YP4 trial derive from its effects on employment, housing status, and health/well-being. Improved outcomes in these areas may yield benefits from: reduced direct cost to government (for example, reduced unemployment payments and rent assistance, and increased tax payments); and reduced usage of government and not-for-profit welfare services (for example, reduced demand for public housing and SAAP services, and reduced demands for health services and contact with criminal justice system).

The main costs associated with YP4 will be the extra time spent by case managers in managing YP4 participants, and extra expenditure on programs for participants relative to the benchmark of non-participants who would not have access to integrated services.

An important aspect of the project will be to describe in a precise manner the policy effect being identified. Estimates of the effects of a program on participants measure the effect of receiving services as a participant, relative to services provided to non-participants. In this project what is being received by participants, and not by non-participants, is the joining up of services, rather than necessarily access to services per se. Hence, for the project to provide a meaningful basis for future policy development, it will be critical to document and describe how the experience of participants has differed from non-participants.

Funding source: ARC linkage grant of $240,000 over the period 2006-2008.