Evidence is growing that outcomes contracts deliver tangible results.
Outcomes initiatives are becoming increasingly common in the education and employment space, and are delivering real results.
Educate Girls launched the first Development Impact Bond in Rajasthan’s Bhilwara district in September 2015. Rajasthan has particularly acute educational challenges. 1 in 10 girls ages 11-14 in the state are not enrolled in school, and less than a quarter of rural children in Grade 3 can read a Grade 2-level paragraph or solve a subtraction problem.
The program was measured against two outcomes: learning gains of boys and girls in grades 3-5 and enrolment of out-of-school girls.
Results at the end of the three-year program showed impressive results:
116% of the final enrolment target achieved
160% of the final learning target achieved
In the final year, learning levels for students in program schools grew 79% more than their peers in other schools – almost the difference of an entire additional year of instruction.
The success of the program led to Educate Girls being named the first “Audacious Project” recipient in Asia. Using funding from the project – a massive philanthropic effort launched by TED – Educate Girls will expand to 35,000 villages across India, working to enrol the 1.6 million girls who are currently out of school.
Colombia Youth Employment Initiative
The unemployment rate in Colombia among vulnerable populations, such as young people and women (who are more likely to work in Colombia’s large informal sector) is one of the highest in Latin America. The armed conflict in Colombia has exacerbated labour market inequalities.
The first Colombian Social Impact Bond was launched in 2017 in Bogotá, Cali, and Pereira to provide sustained employment for vulnerable youth and in particular individuals internally displaced because of armed conflict. Results released after two years of implementation showed that:
899 people were placed in formal jobs (117% of 766 expected outcome beneficiaries)
677 people were retained in their jobs for three months (88% of 766 expected outcome beneficiaries)
309 people were retained in their jobs for six months (60% of 514 expected outcome beneficiaries)
Therefore, the outcomes achieved were beyond the targets initially agreed. This led to the program being scaled up.
Quality Education in India
The USD $11 million Quality Education India Development Impact Bond has reported a 30% increase in the number of children achieving its benchmark learning outcomes in its first year of activity. The four-year program aims to improve numeracy and literacy outcomes for children aged 5-11 across 600 schools in Delhi and Gujarat.
The Bond is funding the delivery of teaching enhancement programs to 600 schools, reaching more than 100,000 students aged 5–11. Based on an independent evaluation of more than 12,000 students, the program has resulted in almost a third more students achieving basic literacy and numeracy skills, and 40% of the target schools demonstrating significantly higher improvements in proficiency.
Morocco Education and Training for Employability
Morocco struggles with unemployment and there are gaps in skills and competencies presented by jobseekers and the ones needed by the market (soft-skills, proficiency in foreign languages, skills related to job search and technical knowledge).
An RBF program was launched with the objective to place 8,000 beneficiaries in jobs. The outcomes metrics which are being measured are completion of training, placement into formal job and job retention for 6 months. Were 8 providers selected through a competitive process.
A few results observed so far are:
Service providers took advantage of the flexibility to achieve the expected results. For example, they were able to adapt to sector changes during the pandemic. They were also able to adapt and shift their focus to the automobilist industry when the conflict in Ukraine led to surge in demand
The program introduced performance management systems to support providers
Proyecta tu Futuro in Argentina
Argentina also faced high youth unemployment rates. The situation was aggravated bythe COVID pandemic due to the loss of jobs and also to the interruption of studies, which reduces youth’s abilities to secure jobs.
The Social Impact Bond was launched in 2018 and lasted for 3 years, supporting vulnerable young people in the city of Buenos Aires to access skills and employment training so they could secure and maintain jobs.
The program achieved the outcomes beyond the initial targets:
89% of the target beneficiaries received training
36% were placed in a job
69% retained the job for 4 months
51% retained the job for 12 months
Australia Jobactive program
Jobactive is a federal employment services program launched from 2015-2022 in Australia, seeking to “promote stronger workforce participation and help more job seekers move from welfare to work”.
The program had a strong focus on results, once 48% of the payment metrics were for fixed fees and 52% for outcome payments for job retention (qualifying education course, 4, 12 and 26 weeks).
The program emerged as a response to key challenges:
Absence of a strong link between training and job placement
Poor initial assessment for effective matching / post placement support
Lack of flexibility to address job seekers’ unique needs
For 2018-2019, there was a ~49% retention rate after 3 months on average. The program was designed to improve accountability to beneficiaries through the Star Rating system, which provides a rating to the service providers based on their performance.