What is it and what does it aim to do?
In-work support aims to increase workers’ employment duration and wage progression. Typical in-work support includes careers advice and financial incentives. The careers advice element may cover both training opportunities (which may directly influence in-job progression) and job moves (which are known to be an important way in which individuals can progress in the labour market). Financial incentives may be for a specific purpose, such as transport or childcare costs, or they may be direct wage subsidies paid to the employee.
In practice, both types of intervention are typically targeted at those who have recently (re-)entered work from unemployment and may form part of an active labour market programme that also provides more traditional employment support.
We found five studies from OECD countries that met our evidence standards, one of which is from the UK. One of these studies covers several programmes, so we have evidence related to seven programmes in total (as well as two variants on those programmes).
For one of these programmes we have results for 12 different ‘projects’ where both the participant and support mix differed.  For a second programme, we have results for four different ‘projects’ that targeted similar participants but where support mix, and provider, differed. We focus on employment and wage effects, although also consider other outcomes (e.g. employment stability) where studies report these.
Things to Consider
The majority of the available evaluations are based on programmes for people who were recently unemployed, although one more recent study looks at those in low-paid work. Things to consider are:
Is effective job placement more important than in-work support?
The evidence on effectiveness is quite mixed. For effective schemes, financial incentives (including benefit sanctions) may play a key role in increasing employment durations or wage progression. However, evaluations of active labour market programmes suggest these outcomes can be achieved without in-work financial support when people are placed into the right jobs in the first place.  This suggest that effective job placement may be more cost-effective than in-work support.
Should programmes target the most disadvantaged?
The available evidence suggests programmes that are effective, are more effective for the most disadvantaged, including the long term unemployed and long-term benefit recipients. They are less effective for those facing fewer barriers to labour market attachment.
How can we pilot and test innovative approaches to in-work support?
There is some evidence that more intensive support is more effective (although not necessarily more cost effective). Beyond this, there is little evidence on which elements of in-work support are more effective. We also need to do more to test whether innovative approaches to in-work support can improve effectiveness.
How can we keep workers engaged with programmes, in the absence of financial incentives?
Programmes tend to have difficulty in keeping participants involved, particularly when financial incentives stop being paid. This is problematic as additional employment services appear to be important for sustaining long run improvements in outcomes.
The pool of people who might participate in in-work support programmes is potentially much larger than existing programmes that target people who were recently unemployed. It is not known whether the findings would be the same if targeted at low wage workers in general (as we only have one study that considers this group). We need to do more to pilot and test approaches targeted at low wage workers in general. Testing new approaches will require data on employment and wage progression which is not easily accessible given restrictions on the use of HMRC data.
How effective is in-work support?
In-work support can increase employment and wages, but effects vary both across and within programme and are not always positive.
All eight programmes covered in the six studies generate some positive effects on employment and wages, although the strength of the effects vary by programme. For the programmes reporting results from multiple projects, only around a quarter of those projects report consistently positive effects for participants.
For those programmes that are effective, some report stronger effects for more disadvantaged groups.
Three programmes report larger effects for the most disadvantaged groups (long term welfare recipients) with two more reporting largest effects for moderately disadvantaged (those only facing one barrier to work or those less ‘attached’ to the labour market). The remaining three studies report no differences across groups.
Financial incentives are key for sustained effects.
For most evaluations, there was no sustained effect over the long term once financial incentives ceased to be paid. There were four exceptions, one of which reported sustained effects for the long term unemployed, another for a subset of projects, and two for programme variants which offered employment services in addition to financial support.
Larger financial incentives help more.
The two studies that consider the impact of financial incentives find that larger incentives were more likely to produce greater employment and earnings effects. But, of course, larger incentives also cost more. We are unable to assess the relative cost-effectiveness of increased incentives.
Employment support services may reinforce the effect of financial incentives.
Evidence from two programmes suggests that combining financial incentives with employment services produced larger effects on earnings than incentives alone. The same two studies also suggest that the combination helps generate sustained effects (in contrast to offering financial incentives alone). Note, however, that most other programmes also offer employment services without generating sustained effects.
There is no consistent evidence on which elements of in-work support are more effective.
The evidence on the effectiveness of different types of in-work support is limited and findings mixed.  As discussed above, one recent study finds that more intensive support is more effective than light touch support (although it may not be more cost-effective).
Is In-Work Support Cost Effective?
In-work support is not consistently cost effective, even when the programme outcomes are positive. Study 1 finds a large overall benefit to society of net £2500 gain for each long term unemployed participant. However for lone parents, there was an estimated net loss to society as the benefits were less than the programme costs. Study 2 finds similarly sized programme benefits for the sites where the in-work support interventions were successful. It should however be borne in mind that within the trials considered in studies 1 and 2, there were large sub-groups for which the net effect on society was negative. This emphasises the need to carefully design and target in-work support.
 In one case the ‘projects’ involve different sites, in another different providers. The annex has more details.
 For example, jobs that better match the workers’ skills, interest or education (Hamilton, G., Martinson, K., and Wavelet, M. (2010). “Finding the Next Job. Reemployment Strategies in Retention and Advancement Programs for Current and Former Welfare Recipients.” MDRC Brief.
 One study suggests that encouraging job moves may increase effectiveness. Another finds positive effects from sector specific training and suggests that ‘training first’ may be more effective than ‘placement first’. But this is hard to reconcile with the two studies that suggest that (general) training had no impact on outcomes.