The economic

benefits of
guidance
Tristram Hooley
(Professor of Career Education)

OECD definition
Career guidance refers to services and activities intended to
assist individuals, of any age and at any point throughout
their lives, to make educational, training and occupational
choices and to manage their careers
The activities may take place on an individual or group
basis, and may be face-to-face or at a distance (including
help lines and web-based services).
(OECD, 2004)

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Overview

Does career guidance work?

What kind of impacts does it deliver?
Economic impacts?

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Overview

Does career guidance work?

What kind of impacts does it deliver?
Economic impacts?

www.derby.ac.uk/icegs
www.derby.ac.uk

Does career guidance work?

Yes
There is a developed evidence base which describes its
impacts and provide insights into effective practice (see
Hooley, 2014 for a summary).
However, relatively little of this evidence base describes
the economic impacts of guidance.

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Key papers on the efficacy of career

guidance

Whiston et al.s (1998) meta-analysis of 47 studies identified impacts across

all types of career interventions.
Bimrose et als (2008) five-year longitudinal tracking study of 50 career
guidance clients found that one-to-one guidance interventions were regarded
as useful by clients, and that guidance services can support adults to make
successful transitions in a turbulent labour market.
Vuori et al.s (2012) paper used a randomised control trial to demonstrate the
impact of a group intervention on career management skills.
Carey & Dimmitt (2012) found that there was consistent evidence of a
positive relationship between well-organised school counselling programmes
and the educational outcomes of students.
And lots more see the reference list at the end.

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Levels of impact

Ret
urn
on
inv
est
me
Results
nt
Behaviour
Learning
Reaction
Take-up
Investment

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Overview

Does career guidance work?

What kind of impacts does it deliver?
Economic impacts?

www.derby.ac.uk/icegs
www.derby.ac.uk

Types of impact

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Its the economy stupid

We will focus on economic impacts.
But social and learning impacts can
also have economic implications.
E.g. increasing womens
engagement in STEM careers is
both a social and an economic
argument for guidance.
E.g. increasing attainment (Hooley
et al. 2014) is a learning impact, but
also has economic benefits.

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Overview

Does career guidance work?

What kind of impacts does it deliver?
Economic impacts?

www.derby.ac.uk/icegs
www.derby.ac.uk

Watts model of economic impact

(1999)
Individual
decisions
Influencing
labour supply
decisions
Influencing
human capital
decision
Improving job
search

Reducing market
failure
Reducing drop
outs
Reducing labour
market
mismatches
Re-engaging
discouraged
workers

Contributing to
institutional
reforms
e.g. enabling the
effective
implementation
of
Apprenticeships

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Where might these impacts register

(Maystons framework, 2002)

Increased
taxation

Reductions in
benefits

Reductions in
crime

Reductions in
health costs

Macro
economic
benefits

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Evidence: Useful studies

Blundell, Dias, Meghir, Van Reenan (2004) found
unemployed participants in a guidance programme were
more likely to progress to employment.
Graverson and van Ours (2008) found that guidance
increased success in job hunting by 30%.
Liu, Wang and Huang (2014) found that guidance
improved chance of employment for unemployed
workers.
Taylor & Hooley (2014) found higher rates of employment
and graduate employment for participants in guidance.

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Evidence: Regional Forecasts on adult

guidance
A report in Northern Ireland (Regional Forecasts, 2008)
examined the impact of the Educational Guidance Service
for Adults on the Northern Ireland economy.
The study used a mix of quantitative and qualitative
methods, including detailed analysis of the services client
data, to estimate the economic value of the service.
This was estimated to be 9.02 net additional tax revenue
for every 1 of public money invested

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Evidence: PWC on school based careers

work
On the basis that the expected lifetime cost of school based
career guidance is approximately 200 per pupil then if:

one more pupil is encouraged to attain an undergraduate degree, it would

offset the costs of providing the benchmarks to 985 pupils;
one more female pupil is encouraged to attain a Foundation Degree, it would
offset the costs for 535 pupils;
one more pupil is encouraged to attain a Level 2 Apprenticeship, it would
offset the costs for between 395 and 610 pupils;
one more pupil is encouraged to attain a Level 3 Apprenticeship, this would
offset the costs for 665 and 990 pupils; and
one more pupil is deterred or prevented from becoming NEET, the avoided
Exchequer costs would ofset the cost for 280 pupils.

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References and resources

Bimrose, J., Barnes, S-A. & Hughes, D. (2008). Adult Career Progression and Advancement: a FiveYear Study of the Effectiveness of Guidance, Coventry/London: Warwick Institute for Employment
Research/Department for Innovation, Universities and Skills.
Blundell, R., Dias, M. C., Meghir, C., & Reenen, J. (2004). Evaluating the employment impact of a
mandatory job search program. Journal of the European Economic Association, 2(4), 569-606.
Carey, J. & Dimmitt, C. (2012). School counseling and student outcomes: summary of six statewide
studies. Professional School Counseling, 16(2): 146-153.
Graversen, B. K., & Van Ours, J. C. (2008). How to help unemployed find jobs quickly: Experimental
evidence from a mandatory activation program. Journal of Public Economics, 92(10), 2020-2035.
Hooley, T. (2014). The Evidence Base on Lifelong Guidance. Jyvskyl, Finland: European Lifelong
Guidance Policy Network (ELGPN).
Hooley, T., Matheson, J. & Watts, A.G. (2014). Advancing Ambitions: The Role of Career Guidance in
Supporting Social Mobility. London: Sutton Trust.
Liu, S., Huang, J. and Wang, M. (2014). Effectiveness of job search interventions: A meta-analysis
review. Psychological Bulletin. Vol 140 (4) pp 1009-1041.
Mayston, D. (2002). Assessing the Benefits of Careers Guidance (CeGS Occasional Paper). Derby:
Centre for Guidance Studies, University of Derby.

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References and resources II

Regional Forecasts (2008). Examining the Impact and Value of EGSA to the NI Economy. Belfast:
Regional Forecasts.
PWC (2014). Assessing Benchmarks of Good Practice in School Career Guidance. London: Gatsby
Charitable Foundation.
Taylor, A. R., & Hooley, T. (2014). Evaluating the impact of career management skills module and
internship programme within a university business school. British Journal of Guidance & Counselling,
42(5), 487-499.
Vuori, J., Toppinen-Tanner, S. & Mutanen, P. (2012). Effects of resource-building group intervention on
career management and mental health in work organizations: randomized controlled field trial. Journal
of Applied Psychology. 97(2): 273-286.
Watts, A.G. (1999). The Economic and Social Benefits of Guidance. Educational and Vocational
Guidance Bulletin, 63: 12-19.
Whiston, S.C., Sexton, T.L. & Lasoff, D.L. (1998). Career intervention outcome: a replication and
extension of Oliver and Spokane (1988). Journal of Counseling Psychology, 45(2): 150-165.

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Tristram Hooley
Professor of Career Education
International Centre for Guidance Studies
University of Derby
http://www.derby.ac.uk/icegs
t.hooley@derby.ac.uk
@pigironjoe
Blog at
http://adventuresincareerdevelopment.wordpress.com
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egs www.derby.ac.uk/icegs
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Remember, remember
There is evidence that career guidance is effective.
There is conceptual work that has explored the economic
impacts of guidance.
There are number of studies that have attempted to
quantify this economic impact.
There is a need (as ever) for further research to map
these higher level impacts.

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