Welfare reform, universal credit and labour supply

Radical welfare reform is one of the hallmarks of the coalition government. The fiscal consolidation includes significant cuts to many working-age benefits. And the government is starting to introduce universal credit, arguably the biggest structural reform of the benefits system since the 1940s.

In this event we aim to move beyond analysis of which families gain and which lose from these reforms and look at some of the other effects that the reforms might have.

Both the benefit cuts and universal credit are presented by the government as ways to ‘make work pay’. IFS researchers will show what effect the benefit reforms as a whole, and universal credit in particular, have on work incentives for different groups, and present suggestive evidence on how labour supply might respond.

While this research focuses on the relationship between earnings and entitlements, Fran Bennett (Womens’s Budget Group and University of Oxford) will look at another important aspect of the design of universal credit: the implications of policy decisions on how entitlements will be assessed, claimed and paid out. Stephen Brien (Expert Adviser, DWP) will provide a government perspective.