UK welfare reforms could encourage working shorter hours, warns think tank
The UK government’s “universal credit” welfare programme has been criticised in a new study.
In its assessment of the welfare reforms, the Resolution Foundation think tank argues that, as it stands, the universal credit could have the unintended consequence of making fewer working hours more attractive for some groups, especially women.
The foundation is calling for major changes before the reforms are rolled out fully. The government is currently introducing the universal credit in stages, as a replacement for a variety of unemployment and in-work benefits.
The report argues that since the universal credit was first announced, problems with its implementation, including issues around IT contracts, have meant that “key underlying policy choices that will help shape the future of the jobs market, working patterns (including between the genders) and pay and progression have all received far less attention.”
“Improvements necessary to enable UC to, at a minimum, make work pay and smooth the transition into work must be made before millions of families are moved on to the new system,” it warns.
Different approaches to benefits and welfare payments are considered in several IZA World of Labor articles. Ugo Colombino considers the unconditional basic income as an alternative to other social welfare policies, arguing that: “It is simple, transparent, and has low administrative costs, though it may require higher taxes.”
Richard Burkhauser, meanwhile, compares the effectiveness of in-work tax credits to the minimum wage as a means of reducing poverty. He writes that: “Earned income tax credits effectively raise the hourly wages only of workers in low- and moderate-income families, while increasing labor force participation and employment in those families.”
Finally, Erdal Tekin has written for us about childcare subsidy payments. He argues that: “Designing a childcare subsidy policy that promotes parental employment and improves the quality of childcare at the same time is difficult, if not impossible. Given the conflict between the two goals, childcare policy should be more about children and less about parental employment, as high-quality childcare has significant private and societal benefits.”
Read more on this story at the Guardian and access the Resolution Foundation’s report here.
Related articles:
Is unconditional basic income a viable alternative to other social welfare measures? by Ugo Colombino
The minimum wage versus the earned income tax credit for reducing poverty by Richard V. Burkhauser
Childcare subsidy policy: What it can and cannot accomplish by Erdal Tekin