The impact of the UK Government's Universal Credit (UC) programme on labour markets and wider social/economic outcomes

This PhD, fully funded by the ESRC in collaboration with the Joseph Rowntree Foundation, will evaluate the impact of the UK Government's Universal Credit (UC) programme on labour markets and wider social/economic outcomes. UC is the UK Government's flagship change in social security policy, and is scheduled to reach full rollout by the end of 2018, and eventually - once tax credit and other benefit claimants are added to the system - some 7 million families are expected to receive UC. A key element of this set of reforms is the streamlining of a number of different benefits that are available into a single UC. Other elements of these reforms include paying housing benefit to tenants rather than directly to landlords, and moving from a fortnightly payment schedule to a monthly payment schedule. These reforms come at a time when the UK economy is struggling for growth, inflation is trending upwards and average real incomes are shrinking. As the recent JRF report (UK poverty 2017') shows, the reduction in poverty in the UK seen over the past 20 years are in danger of being reversed. Understanding the role that welfare reform plays in this narrative is crucial.

Research Questions and Methodology

There are several key research questions that will be addressed in this PhD:

1) What impact has the rollout of UC had on local labour market outcomes, such as unemployment and labour market participation? I will consider the poverty experience of those 'in work' as well as those 'out of work'

2) What impact has UC had on household finances, for example through earnings and unsecured debt?

3) Looking more widely at individual wellbeing, has the rollout of UC increased anti-depressants descriptions, the use of foodbanks or crime rates? This PhD will result in at least three identified contributions to the economics literature, which will be targeted at top general interest and field journals. In addition, this work will be incorporated into a series of non-technical summary papers which will be released by the JRF and the Fraser of Allander Institute (FAI) at the University of Strathclyde. Given the substantial public interest in understanding the impacts of the rollout of UC, it is anticipated that the evaluation of this programme outlined will generate significant interest, in particular from the UK Government as they consider further welfare reform. Furthermore, with welfare powers being devolved to the Scottish Parliament, there is scope for action to be taken at a devolved level in response to the evidence base that this study will provide.
These questions will be addressed by using a robust empirical approach known as "difference-in-difference regression", which can isolate the effects of the policy from confounding factors (i.e. economic climate, social attitude etc.). This approach is made possible by the fact that UC is being enrolled gradually, thereby providing an opportunity for comparison between 'treated' areas (where UC has been implemented) and 'controlled' areas (UC yet to be implemented).

Timetable

In year 1 I will be gaining familiarity with the literature, the empirical methods that will be used and working to construct the key earnings data from the ONS and HMRC microdata (this is anticipated to take between 3 and 6 months). The next 6 months of the PhD will focus on the remaining data collection and the implementation of the empirical strategy for the first paper. By the end of year 1 it is anticipated I will have some initial results for discussion and presentation at the Scottish Graduate Programme PhD conference in January 2020. I will then work to refine these results in response to feedback and produce a draft of their first chapter. The second and third chapters will focus on evaluating the impact of the UC rollout on other, wider, social outcomes such as GP prescribing of antidepressants, foodbank use, and crime. These chapters will be completed in years 2 and 3 respectively.