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Evidence that UC gets 250,000 more into work
Answer to written question in House of Lords yesterday provides the ‘evidence’ that UC gets 250,000 more people into work -
In total, it is estimated that Universal Credit will help more than 250,000 people move into employment.
There are a number of features of Universal Credit (UC) which we estimate will drive this increase in participation:1. Increased financial incentives to move into work – UC has better incentives to increase hours of work, meaning workers keep a higher proportion of their additional earnings, with a guarantee that work always pays.
We have estimated the impact of financial incentives by combining academic evidence on people’s responses to previous welfare system reforms, and the Department’s Policy Simulation Model. The Policy Simulation Model was used to estimate changes in gains from work and disposable income (i.e. drivers of income and substitution effects) for different groups due to the introduction of Universal Credit.
We estimate that increased financial incentives will result in around 150,000 more people in employment under UC in steady state.
2. Increased intensity of work search under Universal Credit. Conditionality is extended under UC to certain groups that were not subject to conditionality under the legacy system, meaning they will get work coach support and encouragement to seek work, and will sign a claimant commitment to spend up to 35 hours (depending on their circumstances and any caring responsibilities) a week seeking work.
The conditionality regime in Universal Credit has a wider reach than the equivalent JSA regime in the legacy benefit system. We use evidence of the employment impacts from trials of labour market interventions to estimate the increase in employment for these groups experiencing conditionality for the first time. We estimate that extended conditionality under UC will result in around 50,000 additional people moving into employment.
3. A smoother and simpler transition into work under Universal Credit. Universal Credit places less administrative burden on the claimant and has a clearer system of allowances and tapers that allow claimants to more easily see the financial benefits of moving into work or increasing their hours.
The estimated employment impacts of UC due to its simplicity are based on research and evaluation evidence of similar reforms in the past. In particular, it draws on evidence from the:
a) quantitative and qualitative evaluations of mandatory work-focused interviews for lone parents and Better Off Calculations; and
b) evaluation of In-Work Credit.We estimated that the move to a single system of working-age benefits, in the form of Universal Credit, will result in around 60,000 more people in employment under UC in steady state.
Best work of fiction 2017?
Best work of fiction 2017?
probably…
if a 63% taper incentives income growth can we apply that to higher band tax payers too?
What is the definition of “in work” that the DWP use? My understanding is that if there are any earnings at all in an assessment period then this counts as in work. So just an hour a month would be enough to counted as in work.
The DWP use some statistics as evidence that people move off UC faster and in greater numbers compared to other benefits.
As usual, they are being selective with their statistical methodology. More IDS - Iain’s Dodgy Statistics. But as usual, the press, politicians and local authorities fall for these claims each time. I and many others now no longer believe any DWP statistical conclusions connected with welfare reform without carefully checking them, which is a sad reflection on the professionalism of their otherwise good research staff.
Remember their old statistics about ESA when they alleged that the high drop out rate before the WCA assessment meant that the process was exposing people swinging the lead when it was because people recovered from short-term illnesses?
The DWP compared off-flow rates from JSA to those for UC. in the initial areas This was in the early days when UC was limited to single unemployed people making new claims. These are one of the groups who are most likely to leave either JSA or UC because they are more likely to move into work or training. So effectively I think they have a skewed sample.
I assume the off-flow rates do not include those who drop out of the system because of the hassle, preferring to rely on credit, friends and family nor those who are sanctioned.
The Work and Pensions Committee highlights that the most recent study of employment impacts only looked at live service single claimants all the way back in 2014/2015 - so its ‘analytically unsound’, using Neil Couling’s words, to draw conclusions about the impact of full service from this - from a letter dated 27 October published today to David Gauke -
[ Edited: 8 Nov 2017 at 05:03 pm by Stuart ]‘Trends in employment rates are affected by a wide variety of factors outside the benefits system. Alongside simple data on employment outcomes, the Department has rightly therefore sought to measure the direct employment impact of UC itself by comparing the employment outcomes of UC claimants with those of a control group of similar people making similar claims on legacy benefits.
As we noted in the evidence session, the latest such study was for live service UC claims made in 2014-15. 4 These claims were from single, unemployed people without children only. No employment impact data for the more complex range of UC full service claims are available. As Neil Couling identified in the session it is “analytically unsound” to draw conclusions about the impact of the full service from outcome data without a control group comparator.’