: The impact of in-work conditionality of Universal Credit on benefit take-up and employment
Universal Credit (UC) is the main means-tested benefit in the UK welfare system, supporting low-income individuals and families. UC replaced multiple benefits with a single payment, while introducing strict job search requirements and in-work conditionality. Individuals who are not working and are deemed capable of work are usually required, among other things, to actively look for a job, while claimants who are working but earning below a threshold are required to take steps to increase their earnings, including looking for alternative jobs and increasing work hours. Failure to comply can result in benefit sanctions. Research shows that UC conditionality can have detrimental effects on individual well-being and mental health, while evidence of its employment effects is mixed. In this study, we jointly model the take-up behaviour and labour supply decisions through the lens of a structural random utility model. Individuals anticipate that receiving UC negatively affects their well-being, and job search requirements may reduce the utility they derive from income and leisure. As a result, they might choose not to take up UC even if they are eligible and modify their labour supply accordingly. In this paper, we compare baseline simulations with estimated parameters with counterfactual simulations where the effects of conditionality are muted/removed. This allows us to quantify the impact of conditionality on a number of outcomes of interest, including benefit take-up and employment.
Read MoreEvaluating Labour Supply Responses to an In-Work Benefit for Spain
Spain records one of the highest rates of in-work poverty in the European Union (Eurostat, 2024). Despite this, the development of policies specifically targeted at supporting low-income workers has been limited, especially when compared to other European countries (Laun, 2019). This policy gap, combined with the expansion of minimum income guarantees schemes, may weaken work incentives by narrowing the income gap between employment and nonemployment, thereby increasing the risk of poverty traps among low-income households (Domínguez-Olabide & Zalakain, 2023).
Read MoreFrom Annual to Monthly Simulation of Social Assistance in Sweden
FASIT is a microsimulation model primarily used by the Swedish Parliament and Government to calculate the effects of various regulatory changes. Statistics Sweden (SCB) is responsible for the maintenance and development of the model. This presentation explores experiences moving from annual to monthly data when simulating social assistance.
Read MoreMissing Out on Social Assistance: The Consequences of Benefit Non Take-Up in the UK
Benefit non take-up refers to situations in which individuals or households do not claim social benefits to which they are legally entitled, due to low expected financial gains or costs associated with claiming, including administrative complexity, time and effort, stigma (Moffitt, 1983). While public debate has often focused on benefit fraud, non take-up is considerably more widespread (Ko and Moffitt, 2022). Low take-up undermines the redistributive capacity of welfare states and limits their effectiveness in protecting households against poverty and economic insecurity (Van Oorschot, 1991; Matsaganis et al., 2008). An alternative interpretation, however, views non take-up as a screening mechanism that contains public expenditure by discouraging claims from less needy households (Nichols and Zeckhauser, 1982). In the UK, existing micro-level studies of benefit take-up are relatively dated and rely largely on cross-sectional data (Blundell et al., 1987; Pudney et al., 2006; Zantomio et al., 2010). As a result, there is little evidence on the longer-term consequences of non take-up, partly due to the lack of longitudinal data linking benefit eligibility to observed outcomes. This study addresses this gap by combining longitudinal survey data with tax-benefit microsimulation, complementing recent work on the determinants of non take-up in the UK (Vella and Richiardi, 2024) by focusing instead on its consequences. The main objective of the study is to examine the consequences of non take-up of means-tested benefits for eligible individuals over time, with a focus on labour market outcomes, poverty, physical and mental health, and subjective wellbeing. The analysis combines the UK Household Longitudinal Study (UKHLS) with the UK tax-benefit microsimulation model, UKMOD. UKHLS provides annual panel data on income, employment, household composition, health, and wellbeing. Embedding UKMOD within a longitudinal survey represents a key methodological innovation, allowing benefit eligibility to be reconstructed consistently over time and take-up to be modelled dynamically. Non take-up is identified by comparing observed benefit receipt, based on self-reported information in UKHLS, with simulated eligibility derived from UKMOD. The analysis covers the main social assistance programmes in the UK, namely Universal Credit and its legacy benefits, Pension Credit, and Child Benefit. Prior research shows that eligible individuals who claim benefits differ systematically from those who do not, with non-claimants typically having higher incomes, higher levels of education, and lower dependency loads. In addition, take-up is subject to state dependency, in the sense that individuals who claim benefits once are likely to continue claiming in subsequent periods, and vice versa. To address this selection, propensity score matching is used to construct comparable groups of eligible claimants and eligible non-claimants based on observed characteristics measured prior to take-up. Outcomes are then analysed using a difference-in-differences design, comparing changes over time between the two groups. In addition, individual fixed effects regressions are estimated, exploiting within-person variation in take-up status across waves.
Read MoreThe impact of social transfers for self-employed
We examine the role of social transfers for self-employed in Belgium using the microsimulation model BELMOD. The self-employed represent a significant and increasing group in Belgium. The measurement of income from self-employment comes with particular methodological challenges and research shows that material deprivations tends to be lower for self-employed compared to employees. Despite the existing limitations we will focus on financial poverty for self-employed. The combination of microsimulation techniques and administrative data allows us to analyze which parts of the tax-benefit system contribute most to the poverty reduction for self-employed. We use administrative data and BELMOD to study the poverty reducing role of various household income sources for the self-employed in more detail. Other incomes in the household, besides the income from the individual self-employed person, reduce the poverty risk significantly. For example, the poverty risk of self-employed is reduced by more than half when taking into account labour incomes from other household members. Furthermore, it is reduced by about a third when taking into account all social benefits in the household. Our results indicate that poverty is reduced substantially by social transfers, but to a different degree for various family types. Child allowances clearly contribute to the reduction of the poverty risk for self-employed with children. For families without children, we see the largest reduction in the poverty risk for the household by pension related benefits, followed by contributory sickness/disability benefits. This work is a first step in trying to identify groups of vulnerable self-employed and assessing the role of the tax-benefit system.
Read MoreThe impact on income and labour supply of the limitation of the unemployment benefit in Belgium
Nearly half of the unemployed persons are excluded from the unemployment benefit system by the re-form which has been gradually implemented since 1 January 2026 in Belgium, particularly those with a long unemployment history. The main feature of the reform is to limit the duration of unemployment benefit payments to a maximum of two years, depending on work experience, instead of unlimited payments in time as in the old system. Further, the progressivity of the benefit scheme has been strengthened by an increase of 10% of the ceiling amount during the six first months of unemployment, and a re-duction to a lump sum for unemployed persons who are entitled to payments after one year of unemployment. This paper gives the ex-ante evaluation results on income and labour supply of this reform. The simulation exercise concludes that approximately one third of the excluded persons are expected to return to work, approximately 40% are predicted to receive the social minimum income. The remaining fourth withdraw from the labour market without replacement income, resulting in a significant loss of disposable revenue. Nonetheless the impact on the poverty rate is moderate. Older unemployed, aged 55 years and over, are particularly affected by the reform as more than three fourth of them lose their benefit, representing nearly 22% of the excluded sample. Regional differences are substantial, with Flanders being the least impacted and Brussels-Capital region the most. To fulfil the evaluation, we use:
Read More