The Employment Retention and Advancement (ERA) project was a scheme piloted across the country with a randomised controlled trial. The
scheme essentially gave people advice and support for gaining work and
advancing further within that work as well as providing bonuses for getting
work, staying in work or advancing further in work. The results from the pilot
have been very positive especially among certain groups. It increased earnings
even after the scheme was finished. However new research (unfortunately not published yet) has suggested that whilst income increased
reported wellbeing decreased. Before seeing this new research I had supported
the implementation of the ERA into policy because of its wonderful support in
evidence. I hate to be the person that supports evidence based policy but then
objects to a bit of evidence that disagrees with a policy they like but I think
there is something to be said here. The fact the policy intervention decreased
reported well being doesn’t necessarily mean it shouldn’t be implemented. This
is something worth looking at beyond just the ERA and fits into the wider GDPvs well being debate.
I believe that as things currently stand there are good reasons to argue for
reported well being not being the final arbiter of policy. Some of these
arguments are applicable to the ERA but some are not due to the fact that there
it causes only a small increase in earnings and a very small decrease in
reported well being.
Reported well being is not a perfect measure of utility. You
might have noticed that I keep saying reported well being instead of simply
well being. This is because that’s exactly what it is. It is based on a series
of questions asking a person how they feel now and about the future. This
method of assessing well being has some support as being an effective measure
and is relatively stable. However it doesn’t necessarily represent the overall
happiness of the person surveyed. By tweaking the questions slightly you can
massively change the results. Whilst there has been some settling on reliable
questions to ask this weakness to fiddling provides a hint of the soft nature
of the results. As obvious as it sounds it’s worth saying that there is no way
of going into someone’s brain and finding out how happy they are. When compared
to the study of how having more or less money effects people’s lives this
measure looks very weak.
There on the other hand several morally relevant things
which we know are strongly linked to a lack of money. We know poverty causes a
lower life expectancy, fewer life chances, less life stability and many other
things. As far as I have seen the links with reported wellbeing and these
things have not been shown to be as strong or as well supported with evidence.
It seems reasonable that we should increase want to increase these positive
effect even if it does create a decrease in well being. One does not simply
overrule the other but there is good reason to say that a small decrease in
well being is worth it if there is an increase in these other positive effects.
This could be rendered pointless if further research into wellbeing showed a
stronger link with life expectancy etc but for now it’s still a point worth
considering.
If an intervention is cost saving, like the ERA is in
certain groups, then reported wellbeing of those directly effect is not the
only relevant wellbeing. The ERA was shown to save the government money because
of reduced benefit spending compared to the costs of the program. This means
that this money could have been spent on other goods or services (e.g. raising
other benefits). Therefore any loss of wellbeing resulting from this
intervention would need to be offset against the potential for it to be raised
elsewhere. When looking at how to make savings in government a program like
this should be obviously preferred over a simple spending cut elsewhere.
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