In a new report, funded by the Nuffield Foundation, researchers
from the Institute for Fiscal Studies find that while it did
increase participation in full-time education, the
Education Maintenance Allowance (EMA) failed to achieve its
ultimate aims of improving educational attainment and labour
market outcomes. In fact, the results suggest that
the EMA may even have led to a drop in later-life
earnings of up to 3.5% for its most disadvantaged
recipients (those eligible for free school meals in Year
11).
The EMA was a weekly payment to disadvantaged young people aged
16–19 in full-time education, first introduced by the last Labour
government in 1999 and discontinued in England by the coalition
in 2011. At an eventual cost of around £900 million a year (in
today's prices), it was intended to incentivise these young
people to remain in full-time education and hence to generate
long-term improvements in educational attainment, employment and
earnings for eligible students. The EMA remains in place in
Scotland, Wales and Northern Ireland.
The EMA did lead to an increase in full-time education
participation amongst 16- to 17-year-olds eligible for free
school meals of around 2.5 percentage points. However, this
increase mostly came from students who would otherwise have been
in work-based training programmes or part-time education. The EMA
did not significantly reduce the share of students who were not
in education, employment or training (NEET).
While receiving the EMA, students earned less from part-time
work, suggesting they spent less time in paid employment
alongside their studies. This reduced exposure to the labour
market appears to have had lasting consequences – by
their mid 20s, the most disadvantaged recipients were slightly
less likely to be in employment and more likely to claim
out-of-work benefits.
Introduced as a pilot scheme in 1999 and rolled out nationwide in
2004, the EMA provided up to £30 per week to students from
low-income backgrounds who remained in full-time education
between ages 16 and 19. This was worth around a quarter of what a
young person could earn working a full-time job at minimum wage
in 2004. Between 2004 and 2011, when the scheme was active in the
whole of the UK, it cost the government around £6 billion in
today's prices.
The research focuses primarily on the effect of the national
roll-out in England on students eligible for free school meals,
almost all of whom were eligible for the full EMA award. It
provides the first evidence of the EMA's effects on outcomes
beyond secondary education.
The research also finds:
- The positive effect of the EMA on full-time education was
limited to students enrolled at further education colleges, with
no increase in participation at schools. The effect was
largest for boys, for students with very low grades at GCSE and
for those receiving support for special educational
needs.
- The EMA may have increased attainment of Level 1 (below GCSE)
qualifications, but there is no evidence of an increase in
qualifications above Level 1. For students taking A
levels or equivalents, there was no significant improvement in
grades or increase in university enrolment due to the
EMA.
- There is tentative evidence that the EMA resulted in
a small reduction in criminal behaviour, particularly
for students with very low grades at GCSE, which persisted into
later life.
For students who were eligible for free school meals,
the EMA only generated 40p in benefits
for every £1 the government spent on the policy despite
the fact that the money was transferred directly to students.
This mostly stems from the estimated negative effects on
employment and earnings later in life, which also reduced
later-life tax payments and increased government spending on
out-of-work benefits. The EMA appears to have had fewer negative
effects for slightly less disadvantaged students who were still
eligible for the EMA, though still generated less than £1 of
benefits per £1 spent.
Nick Ridpath, a Research Economist at the Institute for
Fiscal Studies and a co-author of this report, said:
‘The EMA, which cost billions through the 2000s, did not have the
hoped-for positive effects on educational outcomes and later
employment. Indeed, it looks like it may have had negative
consequences by discouraging disadvantaged young people from
getting work experience. The Scottish, Welsh and Northern Irish
governments, which still fund this scheme, might want to take
note.'
Dr Emily Tanner, Programme Head at the Nuffield
Foundation, said:
‘The findings from this research underscore the scale of the
challenge in increasing both participation and meaningful
engagement in post-16 education and training. With the Curriculum
and Assessment Review underway, there is an opportunity to ensure
that 16–19 learning pathways at all levels provide more effective
routes into good employment.'
