The New Enterprise incentive Scheme: an evaluation and a test of the job network

The New Enterprise Incentive Scheme (NEIS) provides support for unemployed persons in Australia to start their own business. It is one of the few employment services to be retained in comparable form following the 1998 implementation of the competitive employment services market known as the Job Network. Pre- and post- Job Network data are used to evaluate both the scheme and the transition to a competitive market for employment services. NEIS achieves high outcomes in terms of the proportion of participants that secure employment and cease claiming benefits. However deadweight loss would mean that the net impact of participation would be considerably lower. Gross outcomes, the profile of those entering the scheme and relative success rates between target groups have remained similar under the Job Network. There is little evidence of negative equity effects that have been feared from the transition to a competitive system of delivery.