Assessing the deadweight loss and additionality associated with public investment in education and skills

Practice area: Economics of Education | Education and Labour Markets | Further education | Labour market economics | Labour markets
Client: N/A
Published: May, 2012
Keywords: modelling qualitative analysis

London Economics were commissioned by the Department for Business, Innovation and Skills to undertake an analysis aimed at improving the current assessment of deadweight loss in the Further Education and Skills arena, where deadweight loss is defined as the extent to which government-funded training generates outcomes that are not additional to what would have occurred in the absence of such provision. Building on a conceptual framework, the detailed econometric analysis of the National Employer Skills Survey (2009) suggests (subject to significant caveats) that 72% of apprentices would have received no training in the absence of the programme. In the absence of fully-funded 16-18 apprenticeships, 84% of apprentices would not have received any training; in the absence of co-funded 19-24 apprenticeships, 73% of apprentices would not have received any training; while In the absence of the more limited funding for apprentices aged 25+, 56% would not have received any training.