Research and analysis

Universal Credit: estimating the early labour market impacts

This report assesses what difference Universal Credit has made to the employment and earnings of new claimants in the first 4 areas.


Estimating the early labour market impacts of Universal Credit

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Universal Credit is designed to reduce poverty by making work pay. It is a new, simpler, single monthly benefit payment for people in or out of work. It replaces:

  • income-based Jobseeker’s Allowance
  • income-related Employment and Support Allowance
  • Income Support
  • Working Tax Credit
  • Child Tax Credit
  • Housing Benefit

Universal Credit has been introduced gradually to ensure Jobcentre Plus offices have been able to safely test the new system as it continues to roll out. Jobcentre Plus offices began to accept Universal Credit claims in April 2013. By July 2013, 4 pathfinder offices were accepting claims and by April 2014, 6 more had been added. A further expansion in the north-west of England began in June 2014 so that by the end of January 2015 around 100 Jobcentre Plus offices were accepting claims.

During 2014, Universal Credit has been made available to newly unemployed claimant groups including couples and families in the north-west and to people with housing costs or who had made a recent claim to another benefit.

The evaluation of Universal Credit is a core part of the testing and comprises a range of research with staff, claimants and external delivery partners.

This report assesses what difference Universal Credit has made to the employment and earnings of new claimants during the early stages of the roll-out. It evaluates the impact on new claims made in the original 4 pathfinder offices between July 2013 and April 2014. This analysis is part of a longer-term and broader body of work that will evaluate what impact Universal Credit has on labour market outcomes.

Authors: Universal Credit Evaluation Team, DWP

Published 15 February 2015