Universal Credit: Welfare reform and mental health

Mike Brewer, Thang Dang () and Emma Tominey

Journal of Health Economics, 2024, vol. 98, issue C

Abstract: The UK Universal Credit (UC) welfare reform simplified the benefits system whilst strongly incentivising a return to sustainable employment. Exploiting a staggered roll-out, we estimate the differential effect of unemployment under UC versus the former system on mental health. Groups with fewer insurance possibilities – single adults and lone parents – experience a mental health deterioration of 8.4-13.9% standard deviations which persists into the subsequent year. For couples, UC partially or fully mitigates mental health consequences of unemployment. Exploring mechanisms, for single adults and lone parents, reduced benefit income and strict job search requirements dominate any positive welfare effects of the reduced administrative burden of claiming benefits.

Keywords: Welfare reform; Mental health; Mediation; Universal Credit (search for similar items in EconPapers)
JEL-codes: D61 I10 I14 I38 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Universal Credit: Welfare Reform and Mental Health (2022)
Working Paper: Universal Credit: Welfare Reform and Mental Health (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:98:y:2024:i:c:s0167629624000857

DOI: 10.1016/j.jhealeco.2024.102940

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