What are the effects of Social Impact Bonds on the social service programs they finance? 

Summary

What are Social Impact Bonds (SIB) and what are their effects in the sector where they have emerged? Under a SIB or a “Pay for success” financing scheme, a private financier funds a social service program with the possibility of a return on investment, or, in other words, making a profit or a loss, contingent on outcomes or impact. Programs regarding employment are most attractive for this type of funding, as they are easier to measure.  Yet, does this practice create better social programs, and does it advance innovation in the areas it funds, or do SIBs deliver worse services because financiers bring a private sector logic to a public policy challenge? This SIB-effect has not been studied. This study concentrates on labour market programs and compares the outcomes of SIB programs and non-SIB programs with regard to reemployment, long term income and job quality. This could give the answer to the question whether the SIB-effect has a positive or negative impact on our society.

The main research questions of the project are:

– What are the differences between SIB and non-SIB programs?

– Do SIB programs yield quantitatively different outcomes from non-SIB programs?

– For all the above, are there significant differences in SIBs across countries and why? 

In order to find the answers to these questions a blended me–thodology will be applied. Those research questions related to the impact of SIB financing will be assessed with quantitative methods, and those questions related to differences in implementation will be assessed using qualitative methods. Specific questions and data sets will be developed in both instances, which will be tied together in a concluding analysis. 

Project Keywords

  • Social Impact Bonds
  • Investment
  • Financing models
  • Unemployment

Disciplines

  • Labour Studies
  • Public Policy
  • Econometrics

Collaborations

International Organizations

  • ILO

Relevant Countries

  • Austria
  • Germany
  • Great Britain
  • Netherlands
  • Switzerland

Status

This is an ongoing project, which started in autumn 2018. The information here is updated regularly. If you have any inquiries please don’t hesitate to contact the project team via the form below.

Contact the project team

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Research team

Debra Hevenstone
Coordinator
Bern University of Applied Science

Michelle Beyeler
Co-Coordinator
Bern University of Applied Science

Matthias von Bergen
Principal Member
Bern University of Applied Science

Alec Fraser
Principal Member
London School of Hygiene and Tropical Medicine

 

 

Wojtek Przepiorka
Principal Member
Utrecht University

Craig Churchill
Associated Member
International Labour Organization

Patricia Richter
Associated Member
International Labour Organization