d'Este, Rocco and Harvey, Alex (2022) The unintended consequences of welfare reforms: universal credit, financial insecurity, and crime. Journal of Law Economics and Organization. pp. 1-60. ISSN 1465-7341

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Abstract

We evaluate the unintended effects of Universal Credit (UC), a monumental welfare reform that has increased the stringency of the UK social security payment system. We exploit the rollout of UC across constituencies, targeting first-time claimants, predominantly young males. Using monthly data from 2010 to 2019 for England and Wales, we first document the negative economic impacts of UC, showing it has led to an increase of around 6,000 repossession orders from the social housing sector. We then focus on UC’s criminogenic effects, finding the reform has caused around 35,000 burglaries and 25,000 vehicle crimes. Collectively, our findings highlight the danger of welfare policies affecting the economic incentives of individuals at the bottom of the income distribution. They also have timely policy relevance considering 6.5 million benefit recipients will soon transition onto Universal Credit.

Item Type:	Article
Schools and Departments:	University of Sussex Business School > Economics
SWORD Depositor:	Mx Elements Account
Depositing User:	Mx Elements Account
Date Deposited:	24 May 2022 08:22
Last Modified:	16 Aug 2022 12:15
URI:	http://sro.sussex.ac.uk/id/eprint/106054

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