A primary role of the welfare state is to provide a safety net against adverse shocks such as becoming unemployed. We estimate the effect of a major welfare reform in the UK on mental health for unemployed claimants. In 2013 Universal Credit replaced six existing benefits, creating a simplified system of applications and payments, whilst simultaneously applying somewhat draconian policy rules including a commitment to intensive job search, a change in benefit income and a 5 week wait to receive the first benefit payment. Exploiting a staggered roll-out across areas and time, we find the welfare reform was less able to mitigate negative mental health effects from entering unemployment by 28% of a standard deviation. We decompose this effect into the proportion coming from the individual policy rules, finding that a cut in income worsened – whilst increased job search intensity protected – against mental health problems from entering unemployment.
Presented by:
Emma Tominey (University of York)
Date & time:
12 May 2021 11:30 am - 12 May 2021 12:30 pm
Venue:
Zoom link for online meeting: https://essex-university.zoom.us/j/95358161390 Please note that this event is open to everyone, but those who are not members of University of Essex need to register by simply sending their names to iserseminars@essex.ac.uk.
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