DWP: “Estimating the Early Labour Market Impacts of Universal Credit”

9 December 2015

The Department for Work and Pensions has published a follow-up report into the effects of Universal Credit titled “Estimating the early labour market impacts of Universal Credit”. The report evaluates the short-term impacts of the introduction of Universal Credit on labour market outcomes, and investigates whether it has been successful in encouraging a greater amount of users to enter or progress in work.

The report investigated the job outcomes for over 8,000 single, unemployed claimants who had made a new claim at one of the ten original Pathfinder offices between July 2013 and September 2014, comparing findings with Jobseeker’s Allowance claimants who made equivalent claims during the same period. Findings suggest that Universal Credit claimants are much more likely to enter work than their JSA claimant counterparts, with results finding that:

•New Universal Credit claimants were eight per cent more likely to enter work within 270 days of their claim than matched Jobseeker’s Allowance claimants in similar areas. (After 270 days Universal Credit claimants were three per cent more likely to have entered work than the proportion of matched Jobseeker’s Allowance claimants.)

• Within the first 270 days of a claim, Universal Credit claimants are estimated to work an additional twelve days more than their match Jobseeker’s allowance counterparts.

• The report authors also found evidence that Universal Credit claimants were more likely to have higher earnings.

The report findings set a case for the future of Universal Credit as it continues to be rolled out and provides a welcome addition to the current evidence regarding Universal Credit prior to the release of detailed analysis on a wider range of claimants