Background and rationale
The recent global crisis and subsequent high levels of unemployment in many countries throughout the world have led to a greater focus on, and recognition of, the importance of labour market policy (LMP) and job-seeking [
1]. In 2015, global unemployment stood at 197.1 million, a 27 million increase on the pre-crisis level of 2007 [
2]. In fact, across countries and over time, levels of unemployment vary considerably, with current unemployment rates in the OECD as low as 3.1% in Japan (2016) and as high as 24.9% in Greece (2015), and with even higher rates recorded in the emerging and developing world [
2]. In the case of Ireland, the unemployment rate over the last three decades has been described as a ‘roller-coaster ride’ culminating in a sharp rise of 15.1% in 2012, from a low of 4.4% in 2006, and a continuous decrease since, illustrating the variability within countries [
3].
Thus, government reaction to fluctuating levels of unemployment is important in terms of supporting the unemployed, not only in helping them to re-access the labour market, but also to become resilient in times of high unemployment. Policy responses to unemployment are generally implemented through LMPs, which can differ across countries, but tend to encompass a variety of similar regulative measures that influence the interaction between labour supply and demand [
2], while also addressing imbalances in, for instance, long-term unemployment, income support, skills shortages, discrimination towards ‘disadvantaged’ labour [
4] and ultimately ensuring efficient labour market functioning [
5]. These policies are important in that they are broadly designed to assist the unemployed and those facing barriers to employment to access the labour market.
At the same time, there is considerable epidemiological research suggesting that unemployment can have much deeper impacts than just the loss of manifest benefits of employment (i.e. financial remuneration), with evidence of impacts on both physical and mental health [
6‐
9]. For example, many unemployed job-seekers experience decreased wellbeing [
9], high levels of psychological stress [
10], low self-esteem and job search self-efficacy [
11], which can act as barriers to returning to work due to low levels of motivation and attendant ineffective job-seeking strategies [
12]. Thus, many people who become unemployed are at increased risk of developing stress-related disorders or psychological distress which can distance them from the labour market and increase their likelihood of becoming long-term unemployed [
13]. Nevertheless, interventions aimed at re-employment tend to concentrate on increasing human capital through work experience and skills training, subsidised and direct employment, and intensifying job search behaviour, with the expected outcome being improved labour market access. Given the compelling evidence for the negative impacts of unemployment on mental health and wellbeing, it is imperative that policy responses to labour market detachment include interventions that help alleviate these adverse impacts and maintain good mental health [
7,
13‐
15].
LMPs which seek to support unemployed people are often defined as ‘active’ or ‘passive’; the latter focuses on income replacement and the welfare of the unemployed, without improving their labour market access. Active labour market policies, on the other hand, include labour market integration measures which aim to improve the employment prospects and wage outcomes for those who have difficulty accessing the labour market such as the unemployed or those threatened by unemployment. Increasingly, governments are using a so-called activation approach in LMP design, where benefit rules and employment or training services are shaped with a view to moving unemployed income benefit recipients into work [
16]. In recent decades this approach has emerged in public policy design in North America, Australia and Western Europe [
17]. Indeed, according to Martin (2014) [
3], activation policies have become a buzzword in LMP with a global movement towards a more regulatory form of welfare whereby established welfare rights become more conditional on job-seeking efforts [
18]. Nevertheless, despite its popularity, there remains ambiguity around activation in terms of what it means for policy and practice, with much of this uncertainty arising from how it has been implemented in various countries and under a variety of labels (i.e. workfare, work-first, labour market activation, welfare to work) [
17].
This variation in activation policies across the developed world lies mainly in the intensity of their regulation. Some countries for example, the UK and the US implement a ‘work-first’ approach whereby the unemployed are required to work for their unemployment welfare. In contrast, countries such as Denmark and the Nordic states employ a ‘human capital’ approach which aims to enable access to more sustainable quality work in the labour market. Interestingly, job quality has been included in the OECD’s wellbeing framework and identified as a key component of individual wellbeing and a means to better economic performance. Having a job is crucial for our wellbeing, but the quality of that job and its impact on our lives is also important and has been found to be associated with both mental and physical health [
7]. Research in Switzerland [
19] found that using negative incentives in activation-focused LMP (ALMP) led to lower quality post-unemployment jobs, both in terms of job duration and level of earnings. Studies have also shown that work of poor psychosocial quality can have long-term health impacts [
20] which can be significantly worse than long-term unemployment itself. A recent systematic review found that people’s perceptions of negative psychosocial factors in the workplace is related to their mental health [
21], with harmful psychosocial job conditions such as low job security, low decision latitude, high psychological job demands and low co-worker support increasing the chance of mental health symptoms [
22]. While activation has been shown to increase exits from unemployment, it is important that the aim of effective activation regimes should be to help people access quality jobs [
3].
Relative to many OECD countries, Ireland has been slow to follow suit in terms of active LMP and activation in particular. Interestingly, the recent economic crisis (2008–2012), has driven a significant and unprecedented move in this direction. With the rapid rise in unemployment in the early years of the recession,
1 the Irish government’s policy was proving insufficient in responding to the needs of job-seekers. For example, it was described as ‘under-examined, fragmented and lacking in ambition… passive and low intensity in character …’ (Sweeney 2011) [
23]. In an attempt to contend with the overwhelming rise in unemployment, recent changes in LMP have prompted a shift from passive to active participation and the strengthening of conditionality with the unemployed now required to engage in job search and activation programmes in order to continue receiving social welfare support. This is comparable with the ‘work-first’ approaches in the UK, Germany, the US, Australia and other European countries, many of which have been developing their activation strategies since the early 1990s. There are particular similarities between the Irish model and UK welfare reforms principally in relation to the re-design of welfare services (i.e. Jobcentre in the UK and the Intreo service in Ireland), the implementation of conditionality [
24] and the sub-contracting of re-employment services to private providers on the basis of performance-related results [
3].
This shift towards activation was achieved through the implementation of the Irish Government’s LMP, ‘
Pathways to Work’ (Department of Social Protection [DSP], 2011, 2013, 2014, 2016–2020) [
25], which has been precipitous, and despite an explicit focus on long-term unemployment, there is little evidence of targeted approaches which acknowledge long-term unemployment and/or its impact on psychological wellbeing. Although the policy refers throughout to prioritising and adequately supporting vulnerable groups including the young unemployed and long-term unemployed through the provision of activation services, the response in terms of application is increased frequency of engagement (i.e. one meeting with a case officer per month). Thus, while this new policy is widely considered to be a success in terms of reducing unemployment by the Irish Government [
25] and in public discourse through the obvious decline in unemployment (15.1% in 2012 to 7.1%, Q4 2016), nothing is known about its impact on the wellbeing and sustainable re-employment of job-seekers in quality jobs and, in particular, the long-term unemployed. This is an important knowledge gap in view of the extensive literature linking unemployment to poor mental health and wellbeing [
7,
26,
27], considerable evidence indicates that unemployed people are more likely to experience: anxiety, loss of confidence, low self-esteem, loss of motivation, suicidal ideation, low levels of coping, psychosomatic problems, poor cognitive performance, behavioural problems and paranoia [
9].
While there is little evidence of the effectiveness of such programmes, there is much political interest in using ALMPs as a means of reducing levels of unemployment. One of the most cost-effective ALMP are ‘job search and assistance’ interventions which comprise measures aimed at improving job search efficiency such as job search courses, job clubs and intensified counselling [
28]. Other components include monitoring and sanctions, which aim to incentivise job-seekers to actively seek work and exit the benefit system [
29]. However, the effectiveness of ALMPs remains unclear, despite many experimental evaluations (e.g. randomised controlled trials [RCTs] and micro econometric impact evaluations); while these are a useful starting point, there is a need to examine programmes more closely in order to understand why they work for some and not for others [
4].
Evaluations of ALMPs are mostly conducted using gold standard econometric impact evaluations and RCTs [
4,
30,
31]. The effectiveness of these interventions is based on their impact on the re-employment of the job-seeker rather than the changes which take place within the individual (e.g. increased employability/improved wellbeing) that, in turn, enable and support re-employment. For instance, labour economists have provided evidence for the effectiveness of the various types of ALMPs available to job-seekers and how they might be used to reduce unemployment [
28,
32]. This evidence suggests that some interventions can have a positive effect on re-employment. For example, Card et al. [
33] found that job search assistance programmes were most likely to have positive impacts in the short term, with labour market training programmes impacting positively in the longer term. Interventions such as counselling and training were also found to increase transition rates for the unemployed into employment [
34]. However, other findings are mixed where such interventions have been found to be unsuccessful or with little or no impact [
4]. In one of the most influential meta-analyses of ALMP evaluations, Martin and Grubb [
35] found that many ALMP programmes were ineffective or often counterproductive in assisting the unemployed to regain access to the labour market. For example, subsidised public sector employment programmes fared least well in terms of impact and improved access to the labour market [
33]. Conversely, however, Kluve et al. found that there may be potential gains from matching participants and programme types, suggesting that programmes may work better for some than for others, depending on their labour market needs [
36].
Current evidence [
37] suggests that there is no ‘one-size-fits-all’ ALMP which can improve employability, but rather that a shift towards a more tailor-made or individualised approach in practice may be more effective. Interventions targeted at an individual’s needs, such as training and counselling, have been shown to have positive effects on wellbeing [
38‐
40]. Similarly, evaluations of Cognitive Behavioural Therapy (CBT)-based employment programmes such as the ‘CHOICES for Well-being’ project [
41] showed improvements in the mental health, self-esteem and job-search self-efficacy of participants, as well as a reduction in the occurrence of negative automatic thoughts and employment progression for some participants. Improvements also persisted at three-month follow-up. In a recent systematic review of interventions aimed at reducing the impact of unemployment on mental health, Moore et al. [
15] reported that short one- to two-week job club-type interventions can reduce the risk of depression for up to two years, with the largest impacts seen in those who re-accessed the labour market. However, they found mixed evidence for CBT interventions, with only short-term effects on depression symptoms and re-employment in a trial with a longer (seven-week) CBT intervention [
42] and no effects in a shorter (two-day) intervention [
43]. The question of whether such interventions could be implemented to support the unemployed in overcoming the negative psychological impacts of unemployment remains unanswered. Moore et al. [
15] conclude that more high-quality RCTs which follow established guidelines (e.g. CONSORT, SPIRIT) are needed to provide evidence of the effects on mental health, of interventions which could potentially be implemented to support the unemployed.
Psychologists and other social scientists have made important contributions towards understanding the impact of unemployment on an individual in terms of wellbeing [
44], self-esteem [
45] and the loss of the latent and manifest benefits of work [
46]. However, very little is known about the effectiveness of activation as a policy approach, and the impact of ALMPs, in potentially undoing the negative psychological impacts of unemployment and building psychological capital and employability within the individual. Theories of employability, such as the model proposed by Fugate et al. [
47], define employability as a person-centred psychosocial construct and something separate from the environment thereby providing the individual with the opportunity to identify their strengths and weaknesses in terms of personal factors [
48]. This is particularly important given the rapidly changing labour market, with its lack of security and increasing demand for flexibility within the workforce.
In the case of the long-term unemployed, many have low or obsolete skills, which leaves them vulnerable to the risk of social exclusion and lifetime unemployment [
37]. In addition, the negative impact of unemployment on psychological wellbeing has been found to worsen during the first year of unemployment [
7]; thus, for job-seekers who have been out of the labour market for longer periods of time, the problems they encounter may overshadow their skills and abilities and can pose a significant barrier in terms of their ability to reconnect with the labour market [
49]. Arguably, therefore, interventions designed for the long-term unemployed should aim to enable a change in the job-seeker’s career trajectory and assist them to access sustainable jobs rather than short-term precarious work where, after a few months, they may become unemployed once more. Yet the work-first approach assumes that any job is better than no job, reinforcing the sustainability of low-paid precarious work in the labour market [
50].
Thus, it is important to investigate empirically whether long-term unemployed clients who receive needs-based individualised services become more employable by means of receiving a range of supports that focus on promoting greater self-awareness, improving wellbeing, increasing hopefulness for the future, and enhancing self-esteem and self-efficacy. For example, the most recent version of the Irish Pathways to Work 2016–2020 policy introduced a new strand called Building Workforce Skills which aims, through cooperation with the education and training sectors, to continuously develop the labour force and to provide job-seekers with the opportunities to develop the skills and competencies required to access and sustain employment.
As the Pathways to Work activation model is a recently established approach, no previous evaluations or comparable studies have been undertaken. However, a number of RCTs and pre–post comparisons have been conducted in other countries (e.g. Sweden [
51], France [
52], the UK [
42] and the USA [
53]) in order to assess the effectiveness of interventions on wellbeing and self-esteem in unemployed participants. These have included a variety of non-traditional employment-focused interventions including CBT, therapeutic training and individualised job search. However, there are few robust evaluations of
non-traditional interventions targeted at individuals, their wellbeing and employability [
4,
13,
15]. This provided the impetus for the present study.