Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263394 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15178
Publisher: 
Institute of Labor Economics (IZA), Bonn
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 entering 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% sd. 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.
Subjects: 
welfare reform
mental health
mediation
decomposition
universal credit
JEL: 
D61
I10
I14
I38
Document Type: 
Working Paper

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