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.