Testing an innovative approach to promote adult learning for low-income Canadians

November 2, 2010

By SRDC-SRSA

The Social Research and Demonstration Corporation (SRDC) released today the final results of learn$ave, a demonstration project to test the effectiveness of individual development accounts (IDAs) as a tool to promote adult learning and small-business start-up for low-income Canadians.

Recognizing that people who lack sufficient education and basic skills are exposing themselves to lower earnings and higher risk of unemployment, governments in Canada have been looking for innovative approaches to promote adult education and training among vulnerable populations.

The learn$ave project was conceived by SEDI – Social and Enterprise Development Innovations (www.sedi.org) – based on the asset-building concept of Individual Development Accounts, pioneered in the United States. IDAs work as regular savings accounts, with account holders receiving a matching grant for every dollar they deposit. To benefit from the matching grant, savings have to be used for the acquisition of eligible assets. In learn$ave, the emphasis was put on human capital. The matching grants could be used for education, training, or starting a small business.

In the mid-2000s, Human Resources and Skills Development Canada decided to test pilotlearn$ave and asked SRDC to evaluate this new approach.

In the learn$ave IDA, participants received $3 in virtual credits for every dollar they put aside, up to $1,500 over a three-year period – meaning they could accumulate a maximum of $6,000 to be used for education and training or small business start-up. The project was delivered in 10 communities representing a mix of large- and medium-sized urban areas and rural communities and involved some 4,800 low-income Canadians.

The report indicates that learn$ave contributed to boost enrolment in adult education: “We’re finding that learn$ave lead to increased education and training, above and beyond what people would have done otherwise,” said Norm Leckie, SRDC project manager. One of the strongest results recorded was with respect to enrolment in educational programs leading to a certificate or a degree: learn$ave increased enrolment in such programs by 23 per cent. Also, some of the largest impacts were recorded among those participants with the lowest household incomes.

Even though learn$ave significantly increased participation rates in education and training, as well as self-employment through micro-enterprise start-ups, SRDC’s analysis suggests that introducing such a program at scale would be quite expensive. However, the report argues that cost-effectiveness could be improved with a few changes in the program design and delivery.

What separates learn$ave from most other IDA programs implemented earlier in Canada and the United States is the presence of a control group in the evaluation of the program, which enabled researchers to see what would have happened in the absence of the program. For instance, many members of the control group, who did not benefit fromlearn$ave incentives, enrolled nevertheless in some form of education or training over the duration of the project. The difference made by learn$ave was measured using this counterfactual as a basis for comparison. Using the enrolment rate that prevailed before the introduction of learn$ave would not present an accurate estimate of the difference that learn$ave made. “We see the value of rigorous and random assignment approaches to separate the real impacts of programs from what happens just through time or experience,” observed Jean-Pierre Voyer, SRDC president.

   Read the full report.
   Read the report highlights.
   Read more about learn$ave.

For information on learn$ave

Norm Leckie, project manager, SRDC
613-789-9656 / [email protected]

Jean-Pierre Voyer, president and CEO, SRDC
613-237-3169 / [email protected]