a post by Heidi Allen MP (Member of the Work and Pensions Select Committee) for the CPAG (Child Poverty ACtion Group[ blog
A little over a century ago, the cry among social reformers concerned about the plight of the poor was for a safety net to be stitched together by the state, to catch any of our fellow citizens who were falling into the clutches of destitution.
Had those same reformers witnessed what we have picked up during the past six months – from visits to food banks in Poplar, Waterloo, Leicester, Morecambe, Chester, and Glasgow – they would be appalled by the extent of hunger, homelessness, and insecurity afflicting so many families and vulnerable individuals in our country.
Here we are introduced to an ‘Other Britain’ where entire communities are not only bypassed by economic growth but are also being pushed through gaping holes in the safety net. One support worker in Chester, for example, told us that, “I don’t meet a single person now who isn’t cold and hungry.”
Continue reading
Read the whole report: The ‘Other Britain’ and the failure of the welfare state
Showing posts with label benefits. Show all posts
Showing posts with label benefits. Show all posts
Thursday, 25 July 2019
Monday, 14 May 2018
10 policies if you think you might want a Universal Basic Income but aren’t sure
a post by Adam Corlett for the Resolution Foundation blog
Universal Basic Income (UBI) is the policy idea du jour, especially among Labour, Lib Dem, SNP and Green members. But those three words by themselves are not a policy.
The concept draws support for a range of different – and sometimes contradictory – reasons, and a UBI could be designed in countless ways with vastly different results. In addition, the debate often fails to engage with the real-life benefits system we already have.
To help clarify which aspects of a UBI really matter to you, and which aspects may not be so appealing, here’s a set of thought experiments: what a UBI manifesto for incrementalists might look like (not all of them necessarily welcome). It shows that there are good ideas to be taken from the concept and the motivations behind it, but that UBI may not be the only or best way to achieve particular goals.
Continue reading
Universal Basic Income (UBI) is the policy idea du jour, especially among Labour, Lib Dem, SNP and Green members. But those three words by themselves are not a policy.
The concept draws support for a range of different – and sometimes contradictory – reasons, and a UBI could be designed in countless ways with vastly different results. In addition, the debate often fails to engage with the real-life benefits system we already have.
To help clarify which aspects of a UBI really matter to you, and which aspects may not be so appealing, here’s a set of thought experiments: what a UBI manifesto for incrementalists might look like (not all of them necessarily welcome). It shows that there are good ideas to be taken from the concept and the motivations behind it, but that UBI may not be the only or best way to achieve particular goals.
Continue reading
Thursday, 26 April 2018
Rethinking low pay and in‐work poverty
an article by Fran Bennet (University of Oxford writing in a personal capacity) published in IPPR Progressive Review Volume 24 Issue 4 (Spring 2018)
Abstract
There is frequent confusion in public debate and media stories between low pay and in‐work poverty. Fran Bennett argues that a focus on gender roles and relationships, and gendered access to resources, is essential to unpick the distinction between these two problems.
Full text (PDF 8pp)
Abstract
There is frequent confusion in public debate and media stories between low pay and in‐work poverty. Fran Bennett argues that a focus on gender roles and relationships, and gendered access to resources, is essential to unpick the distinction between these two problems.
Full text (PDF 8pp)
Wednesday, 28 February 2018
How language duped us into austerity
an article by Zoe Williams published in the Guardian
The same misleading metaphors are used again and again to talk about economic policy. We need a new frame
The Cranhill estate in Glasgow. ‘If anything, the more hardship austerity caused, the more necessary it was for many to cling to the narrative.’
Photograph: Murdo MacLeod for the Guardian
What do people think the economy is? How do they think it works? How do you think it works, if you think it works at all? The New Economics Foundation, in its report, Framing the Economy, conducted 40 in-depth interviews in London, Newport, Glasgow, Wolverhampton and Hull, with the aim of finding points of common understanding. Though 40 is a relatively small number, the researchers were looking for images, metaphors, certainties and black holes that came up again and again, across regions and demographics.
From these tropes, they’ve been able to plot how, from 2010, the coalition government’s austerity agenda played so well into people’s hopes and fears; how the public attachment to it was so tenacious. How, even as the policy was failing to stimulate the economy in the way that had been promised, it was still seemingly resistant to counter-argument. Even once it was plainly, across the country, having devastating impacts on people’s lived experience (disabled people having their benefits removed and dying weeks later, the victims of the universal credit experiment evicted from their homes), the notion itself – that we all had to tighten our belts, and that was the responsible thing to do – was curiously buoyant.
Continue reading
The same misleading metaphors are used again and again to talk about economic policy. We need a new frame
The Cranhill estate in Glasgow. ‘If anything, the more hardship austerity caused, the more necessary it was for many to cling to the narrative.’
Photograph: Murdo MacLeod for the Guardian
What do people think the economy is? How do they think it works? How do you think it works, if you think it works at all? The New Economics Foundation, in its report, Framing the Economy, conducted 40 in-depth interviews in London, Newport, Glasgow, Wolverhampton and Hull, with the aim of finding points of common understanding. Though 40 is a relatively small number, the researchers were looking for images, metaphors, certainties and black holes that came up again and again, across regions and demographics.
From these tropes, they’ve been able to plot how, from 2010, the coalition government’s austerity agenda played so well into people’s hopes and fears; how the public attachment to it was so tenacious. How, even as the policy was failing to stimulate the economy in the way that had been promised, it was still seemingly resistant to counter-argument. Even once it was plainly, across the country, having devastating impacts on people’s lived experience (disabled people having their benefits removed and dying weeks later, the victims of the universal credit experiment evicted from their homes), the notion itself – that we all had to tighten our belts, and that was the responsible thing to do – was curiously buoyant.
Continue reading
Tuesday, 9 January 2018
The forgotten unemployed: 300,000 jobless Britons not claiming benefits
an article by Peter Walker, political correspondent published in the Guardian
The DWP said anyone who thinks they are entitled to out-of-work benefit should contact Jobcentre Plus. Photograph: Danny Lawson/PA
Study finds many people are not claiming support they are entitled to and warns some are put off by the benefits system
About 300,000 British people without jobs or on very low wages are not claiming benefits they are entitled to, according to a thinktank study urging the government to focus more attention on the issue.
The report from the Resolution Foundation says the “forgotten unemployed” are disproportionately likely to be older women or young men, who are missing out on at least £73 a week and potentially far more.
While many appear not to claim benefits because they have other means of support – for example living with a partner in work or with parents – the report warns that some people, particularly women, are put off by a benefits system viewed as complex and overly punitive.
The report, titled Falling Through the Cracks, urges the Department for Work and Pensions (DWP) to do more to examine the reasons why so many eligible people do not claim, arguing that the rollout of universal credit would be a good moment for this.
Continue reading
The DWP said anyone who thinks they are entitled to out-of-work benefit should contact Jobcentre Plus. Photograph: Danny Lawson/PA
Study finds many people are not claiming support they are entitled to and warns some are put off by the benefits system
About 300,000 British people without jobs or on very low wages are not claiming benefits they are entitled to, according to a thinktank study urging the government to focus more attention on the issue.
The report from the Resolution Foundation says the “forgotten unemployed” are disproportionately likely to be older women or young men, who are missing out on at least £73 a week and potentially far more.
While many appear not to claim benefits because they have other means of support – for example living with a partner in work or with parents – the report warns that some people, particularly women, are put off by a benefits system viewed as complex and overly punitive.
The report, titled Falling Through the Cracks, urges the Department for Work and Pensions (DWP) to do more to examine the reasons why so many eligible people do not claim, arguing that the rollout of universal credit would be a good moment for this.
Continue reading
Monday, 30 October 2017
Sanctions and the exit from unemployment in two different benefit schemes
an article by Henna Busk (Pellervo Economic Research PTT, Helsinki, Finland and University of Jyväskylä, Finland) published in Labour Economics Volume 42 (October 2016)
Highlights
This paper investigates the effect of benefit sanctions on the exit rate from unemployment using a unique set of rich register data on unemployed Finnish individuals.
The timing-of-events approach is applied to distinguish between the selection and causal effects of sanctioning.
The results imply that the effect of sanctions differs according to the benefits received. Sanctions encourage unemployed individuals receiving flat-rate labour market support (LMS) to find jobs, whereas unemployed individuals receiving earnings-related (UI) allowances to leave the labour force.
The encouraging effect of sanctions on active labour market policy programmes is relatively small and statistically significant only among LMS recipients.
JEL classification: C41, J64,J65
Highlights
- We examine the effect of benefit sanctions on the exit rate from unemployment using the timing-of-events approach.
- The effect of sanctions differs according to the benefits received.
- Sanctions increase the exit rate from unemployment to work among flat-rate labour market support receivers.
- Sanctions increase the exit rate from unemployment to outside the labour force among earnings-related benefit receivers.
This paper investigates the effect of benefit sanctions on the exit rate from unemployment using a unique set of rich register data on unemployed Finnish individuals.
The timing-of-events approach is applied to distinguish between the selection and causal effects of sanctioning.
The results imply that the effect of sanctions differs according to the benefits received. Sanctions encourage unemployed individuals receiving flat-rate labour market support (LMS) to find jobs, whereas unemployed individuals receiving earnings-related (UI) allowances to leave the labour force.
The encouraging effect of sanctions on active labour market policy programmes is relatively small and statistically significant only among LMS recipients.
JEL classification: C41, J64,J65
Wednesday, 25 October 2017
Relative Poverty, British Social Policy Writing and Public Experience
an article by Andrew Dunn University of Lincoln, UK) published in Social Policy and Society Volume 16 Issue 3 (July 2017)
Abstract
Relative poverty, a concept developed by left-wing social scientists, categorises as ‘poor’ those who fall seriously behind normal nationwide material standards. This article argues that the widespread view that the word ‘poverty’ means ‘relative poverty’, which in left-dominated social policy academia often extends to implying that those who do not define poverty this way are necessarily misguided, has led to an incomplete portrayal of poorer British people's lived experience.
The article examines published empirical work, before presenting findings from British Social Attitudes surveys and interviews with forty unemployed Jobseeker's Allowance claimants and thirty employed people.
Both the existing and new findings exposed aspects of public attitudes and experience which resonate with unanswered academic criticisms of defining poverty as relative poverty.
These public contributions have tended to be glossed over or treated dismissively by social policy authors, despite them attaching importance to Left-friendly aspects of poorer people's experience and attitudes.
Abstract
Relative poverty, a concept developed by left-wing social scientists, categorises as ‘poor’ those who fall seriously behind normal nationwide material standards. This article argues that the widespread view that the word ‘poverty’ means ‘relative poverty’, which in left-dominated social policy academia often extends to implying that those who do not define poverty this way are necessarily misguided, has led to an incomplete portrayal of poorer British people's lived experience.
The article examines published empirical work, before presenting findings from British Social Attitudes surveys and interviews with forty unemployed Jobseeker's Allowance claimants and thirty employed people.
Both the existing and new findings exposed aspects of public attitudes and experience which resonate with unanswered academic criticisms of defining poverty as relative poverty.
These public contributions have tended to be glossed over or treated dismissively by social policy authors, despite them attaching importance to Left-friendly aspects of poorer people's experience and attitudes.
Wednesday, 19 April 2017
Sanctions and the exit from unemployment in two different benefit schemes
an article by Henna Busk (Pellervo Economic Research PTT, Helsinki, Finland; University of Jyväskylä, Finland) published in Labour Economics Volume 42 (October 2016)
Highlights
This paper investigates the effect of benefit sanctions on the exit rate from unemployment using a unique set of rich register data on unemployed Finnish individuals. The timing-of-events approach is applied to distinguish between the selection and causal effects of sanctioning.
The results imply that the effect of sanctions differs according to the benefits received. Sanctions encourage unemployed individuals receiving flat-rate labour market support (LMS) to find jobs, whereas unemployed individuals receiving earnings-related (UI) allowances to leave the labour force.
The encouraging effect of sanctions on active labour market policy programmes is relatively small and statistically significant only among LMS recipients.
JEL classification: C41, J64, J65
Highlights
- We examine the effect of benefit sanctions on the exit rate from unemployment using the timing-of-events approach.
- The effect of sanctions differs according to the benefits received.
- Sanctions increase the exit rate from unemployment to work among flat-rate labour market support receivers.
- Sanctions increase the exit rate from unemployment to outside the labour force among earnings-related benefit receivers.
This paper investigates the effect of benefit sanctions on the exit rate from unemployment using a unique set of rich register data on unemployed Finnish individuals. The timing-of-events approach is applied to distinguish between the selection and causal effects of sanctioning.
The results imply that the effect of sanctions differs according to the benefits received. Sanctions encourage unemployed individuals receiving flat-rate labour market support (LMS) to find jobs, whereas unemployed individuals receiving earnings-related (UI) allowances to leave the labour force.
The encouraging effect of sanctions on active labour market policy programmes is relatively small and statistically significant only among LMS recipients.
JEL classification: C41, J64, J65
Friday, 10 July 2015
Personal Independence Payments, welfare reform and the shrinking disability category
an article by Alan Roulstone (University of Leeds, UK) published in Disability & Society Volume 30 Issue 5 (2015)
Abstract
The question of who counts and how we construct just who can ‘be disabled’ is central to our concerns in disability studies. As Stone makes clear, disability is exactly what a state deems it to be; the very malleable nature of the category has been exploited to widen or more commonly to narrow just who counts as disabled.
This article will apply and adapt Stone’s thesis to current plans to revise the Personal Independence Payment extra costs benefit. Using official and disabled people’s narratives, the article will make clear the force with which new definitions of disability are being put forward.
This process arguably risks doing state violence to a number of disabled people. These reforms have also used the language of independence in a way that fundamentally distorts the origins and potential of the term in an enabling society.
Abstract
The question of who counts and how we construct just who can ‘be disabled’ is central to our concerns in disability studies. As Stone makes clear, disability is exactly what a state deems it to be; the very malleable nature of the category has been exploited to widen or more commonly to narrow just who counts as disabled.
This article will apply and adapt Stone’s thesis to current plans to revise the Personal Independence Payment extra costs benefit. Using official and disabled people’s narratives, the article will make clear the force with which new definitions of disability are being put forward.
This process arguably risks doing state violence to a number of disabled people. These reforms have also used the language of independence in a way that fundamentally distorts the origins and potential of the term in an enabling society.
Wednesday, 3 June 2015
Does union membership benefit immigrant workers in ‘hard times’?
an article by Thomas Turner and Christine Cross (University of Limerick, Ireland) published in Journal of Industrial Relations Volume 56 Number 5 (November 2014)
Abstract
Immigrants experience many obstacles in obtaining jobs with comparable pay and conditions to native workers. Arguably, unionisation could offer migrant workers the mechanism to obtain better pay and conditions.
This paper examines whether migrant workers have benefited from unionisation in terms of pay, pensions and health insurance in Ireland.
Based on a large-scale national survey, we find that union membership delivers a modest wage premium of a relatively similar magnitude to both nationals and immigrant workers. Unionised immigrants are twice as likely as non-unionised immigrants to earn above the median hourly earnings and have greater pension coverage.
In particular, immigrants from the new accession states in the European Union, with the lowest mean hourly earnings of any immigrant group, gain the most from union membership.
Nonetheless, Irish nationals enjoy greater benefits from membership than immigrant workers. Addressing this discrepancy will require a greater focus by unions on organising immigrant workers.
Abstract
Immigrants experience many obstacles in obtaining jobs with comparable pay and conditions to native workers. Arguably, unionisation could offer migrant workers the mechanism to obtain better pay and conditions.
This paper examines whether migrant workers have benefited from unionisation in terms of pay, pensions and health insurance in Ireland.
Based on a large-scale national survey, we find that union membership delivers a modest wage premium of a relatively similar magnitude to both nationals and immigrant workers. Unionised immigrants are twice as likely as non-unionised immigrants to earn above the median hourly earnings and have greater pension coverage.
In particular, immigrants from the new accession states in the European Union, with the lowest mean hourly earnings of any immigrant group, gain the most from union membership.
Nonetheless, Irish nationals enjoy greater benefits from membership than immigrant workers. Addressing this discrepancy will require a greater focus by unions on organising immigrant workers.
Thursday, 11 December 2014
Tens of thousands of single parents face wrongful sanctions
via Touchstone blog by Philippa Newis of Gingerbread
Sanctions have been a key plank in welfare policy for both Labour and the coalition government. They are designed to make sure that claimants looking, or preparing, for work comply with the requirements the job centre places on them in return for their benefits. However, there is very little evidence to suggest that sanctions actually help single parents to move into sustainable work.
Gingerbread’s new report, Single parents and benefits sanctions found that tens of thousands of single parents are facing wrongful sanctions under a broken regime that is overly focussed on sanctions, at the expense of support that really would help more single parents in to work.
Continue reading
Sanctions have been a key plank in welfare policy for both Labour and the coalition government. They are designed to make sure that claimants looking, or preparing, for work comply with the requirements the job centre places on them in return for their benefits. However, there is very little evidence to suggest that sanctions actually help single parents to move into sustainable work.
Gingerbread’s new report, Single parents and benefits sanctions found that tens of thousands of single parents are facing wrongful sanctions under a broken regime that is overly focussed on sanctions, at the expense of support that really would help more single parents in to work.
Continue reading
Wednesday, 7 August 2013
Lone Parent Obligations: an impact assessment
A report of research carried out by the Institute for Social and Economic Research (ISER), University of Essex, on behalf of the Department for Work and Pensions
DWP Research Report No 845
Summary
This report presents findings from an impact assessment of Lone Parent Obligations (LPO). LPO was introduced in November 2008 and since then lone parents have lost eligibility to Income Support (IS), based on the age of their youngest child, solely on the grounds of being a lone parent. In May 2012, the age of the youngest child was reduced to five and over.
The impact assessment is part of a comprehensive evaluation of LPO that has explored whether and how lone parent employment interventions provide an effective incentive to look for paid employment, alongside an effective package of support for workless lone parents to enable them to find, enter and sustain paid employment. The impact assessment quantifies the impact of LPO by providing estimates of how many lone parents were moved off out of-work benefits and into work as a result of LPO. It examines the impact of LPO on lone parents in the earlier phases of LPO, who lost entitlement to IS between November 2008 and the end of June 2011, at a time when their youngest child was at least seven-years-old.
The impact assessment found that LPO has had a much greater impact on moving lone parents into work than other previous Departmental employment programmes and initiatives aimed at lone parents. Three months after the loss of IS entitlement, LPO is estimated to have reduced the share of lone parents receiving any out-of-work benefit by between 11 and 13 percentage points, and to have increased the share in work by around 7 percentage points. Nine months after, the share receiving any out-of-work benefit had fallen further, to between a 13 and 16 percentage point reduction, and the share in work had increased to between eight and ten percentage points.
The focus of the impact assessment is on movement off benefit and into work, among those claiming IS. It does not account for the impact on new or repeat lone parent claimants, which was beyond the scope of this analysis.
Full text (PDF 101pp)
DWP Research Report No 845
Summary
This report presents findings from an impact assessment of Lone Parent Obligations (LPO). LPO was introduced in November 2008 and since then lone parents have lost eligibility to Income Support (IS), based on the age of their youngest child, solely on the grounds of being a lone parent. In May 2012, the age of the youngest child was reduced to five and over.
The impact assessment is part of a comprehensive evaluation of LPO that has explored whether and how lone parent employment interventions provide an effective incentive to look for paid employment, alongside an effective package of support for workless lone parents to enable them to find, enter and sustain paid employment. The impact assessment quantifies the impact of LPO by providing estimates of how many lone parents were moved off out of-work benefits and into work as a result of LPO. It examines the impact of LPO on lone parents in the earlier phases of LPO, who lost entitlement to IS between November 2008 and the end of June 2011, at a time when their youngest child was at least seven-years-old.
The impact assessment found that LPO has had a much greater impact on moving lone parents into work than other previous Departmental employment programmes and initiatives aimed at lone parents. Three months after the loss of IS entitlement, LPO is estimated to have reduced the share of lone parents receiving any out-of-work benefit by between 11 and 13 percentage points, and to have increased the share in work by around 7 percentage points. Nine months after, the share receiving any out-of-work benefit had fallen further, to between a 13 and 16 percentage point reduction, and the share in work had increased to between eight and ten percentage points.
The focus of the impact assessment is on movement off benefit and into work, among those claiming IS. It does not account for the impact on new or repeat lone parent claimants, which was beyond the scope of this analysis.
Full text (PDF 101pp)
Monday, 5 August 2013
Universal Credit local support services framework
Framework setting out help for claimants who may require extra support to access Universal Credit
That really is all I need to say except to tell you that it’s a 28-page PDF document which you can access here.
Hazel’s comment: Try to hold on to your temper when reading this. Most low-income families do not manage on a monthly income nor do they do their banking online. I am reasonably well educated and use the internet easily. I still find that managing a low income is tough – and with ever-rising prices for staple foodstuffs it is becoming increasingly difficult to budget effectively.
That really is all I need to say except to tell you that it’s a 28-page PDF document which you can access here.
Hazel’s comment: Try to hold on to your temper when reading this. Most low-income families do not manage on a monthly income nor do they do their banking online. I am reasonably well educated and use the internet easily. I still find that managing a low income is tough – and with ever-rising prices for staple foodstuffs it is becoming increasingly difficult to budget effectively.
Thursday, 18 July 2013
Pathways back to work for problem alcohol users
Linda Bauld and Jennifer McKell (University of Stirling, Scotland, UK), Lorna Templeton (Independent Research Consultant, Bristol, UK), Karin Silver (University of Bath, UK), Claire Novak (University of Bristol, UK) and Gordon Hay (University of Glasgow, Scotland, UK) published in Policy Studies Volume 34 Issue 3 (May 2013)
Abstract
The relationship between alcohol misuse, employment and unemployment is complex.
Alcohol misuse is correlated with a range of other problems, including, for example, drug misuse, mental health problems and social deprivation. Together these can be a barrier to accessing and sustaining employment.
The aim of this study was to explore these issues with a sample of adults in the UK who were currently accessing treatment for an alcohol problem. The study involved a systematic literature review followed by qualitative research with 53 treatment service clients and 12 professionals across 5 research sites in England, Scotland and Wales. The findings focus on the main facilitators and barriers, both individual and organisational, for returning to work identified by interviewees. Some of the facilitators and barriers identified were similar to those described in the literature for other groups of unemployed adults.
Others were more specific to alcohol misusers; for example, the stigma experienced by interviewees as a result of the views of others regarding substance misuse, the nature of recovery from addiction and the challenges posed by the prevalence of coexisting mental and physical health problems. Despite the problems faced by many of the study participants, however, the majority were eager to return to work, and this desire to gain employment is discussed in the context of ongoing welfare reform in the UK.
Abstract
The relationship between alcohol misuse, employment and unemployment is complex.
Alcohol misuse is correlated with a range of other problems, including, for example, drug misuse, mental health problems and social deprivation. Together these can be a barrier to accessing and sustaining employment.
The aim of this study was to explore these issues with a sample of adults in the UK who were currently accessing treatment for an alcohol problem. The study involved a systematic literature review followed by qualitative research with 53 treatment service clients and 12 professionals across 5 research sites in England, Scotland and Wales. The findings focus on the main facilitators and barriers, both individual and organisational, for returning to work identified by interviewees. Some of the facilitators and barriers identified were similar to those described in the literature for other groups of unemployed adults.
Others were more specific to alcohol misusers; for example, the stigma experienced by interviewees as a result of the views of others regarding substance misuse, the nature of recovery from addiction and the challenges posed by the prevalence of coexisting mental and physical health problems. Despite the problems faced by many of the study participants, however, the majority were eager to return to work, and this desire to gain employment is discussed in the context of ongoing welfare reform in the UK.
Friday, 5 July 2013
The worst five years for struggling families
a blog post by Donald Hirsch, Director of the Centre for Research in Social Policy at Loughborough University, for the Joseph Rowntree Foundation
In 2008, with our Minimum Income Standards research, the news for low-income families was grim, but not hopeless. We found that 'safety-net' benefits did not provide a basic living standard for parents who had lost their jobs, but required their families to live at a third below what the public thought you need for an acceptable life. But this was better than for those without children, who got less than half.
And while a minimum wage was also insufficient to bring families above this level, it was not too far below – about £1 extra an hour was needed. Since this was still a time when family benefits, in and out of work, were becoming generous, many low-income families were within touching distance of being able to make ends meet: to provide their children with the necessities of life without going into disastrous debt.
Almost everything that has happened since then has pushed such families in the opposite direction.
Continue reading
In 2008, with our Minimum Income Standards research, the news for low-income families was grim, but not hopeless. We found that 'safety-net' benefits did not provide a basic living standard for parents who had lost their jobs, but required their families to live at a third below what the public thought you need for an acceptable life. But this was better than for those without children, who got less than half.
And while a minimum wage was also insufficient to bring families above this level, it was not too far below – about £1 extra an hour was needed. Since this was still a time when family benefits, in and out of work, were becoming generous, many low-income families were within touching distance of being able to make ends meet: to provide their children with the necessities of life without going into disastrous debt.
Almost everything that has happened since then has pushed such families in the opposite direction.
Continue reading
Thursday, 4 July 2013
Poverty, social security and stigma
a feature article by Kate Bell in Poverty Issue 144(Spring 2013)
‘Proud to be poor’ is not a banner under which many want to march.
Writing recently about the lack of respect accorded to those living on a low income, Ruth Lister identified the strong and historic link between poverty and stigma. Social security can be seen as a way of helping to reduce the stigma of poverty, providing enough for people to participate in society, without being reduced to charity. But in recent years, there has been a perception of an increasing sense of stigma attached simply to the receipt of benefits. Kate Bell asks whether social security itself has become a source of shame.
Full text (PDF 4pp)
‘Proud to be poor’ is not a banner under which many want to march.
Writing recently about the lack of respect accorded to those living on a low income, Ruth Lister identified the strong and historic link between poverty and stigma. Social security can be seen as a way of helping to reduce the stigma of poverty, providing enough for people to participate in society, without being reduced to charity. But in recent years, there has been a perception of an increasing sense of stigma attached simply to the receipt of benefits. Kate Bell asks whether social security itself has become a source of shame.
Full text (PDF 4pp)
Wednesday, 12 June 2013
Female Labour Supply, Human Capital and Welfare Reform
COWLES FOUNDATION DISCUSSION PAPER NO. 1892 by Richard Blundell (University College London and Institute for Fiscal Studies), Monica Costa Dias (Institute for Fiscal Studies and CEF-UP at the University of Porto), Costas Meghir (Yale University, Institute for Fiscal Studies and NBER) and Jonathan Shaw (Institute for Fiscal Studies and University College London)
Abstract
We consider the impact of Tax Credits and income support programmes on female education choice, employment, hours and human capital accumulation over the life-cycle. We thus analyse both the short run incentive e ffects and the longer run implications of such programmes.
By allowing for risk aversion and savings we are also able to quantify the insurance value of alternative programmes. We find important incentive e ffects on education choice, and labor supply, with single mothers having the most elastic labour supply. Returns to labour market experience are found to be substantial but only for full-time employment, and especially for women with more than basic formal education.
For those with lower education the welfare programmes are shown to have substantial insurance value. Based on the model marginal increases to tax credits are preferred to equally costly increases in income support and to tax cuts, except by those in the highest education group.
Full text (PDF 54pp)
Abstract
We consider the impact of Tax Credits and income support programmes on female education choice, employment, hours and human capital accumulation over the life-cycle. We thus analyse both the short run incentive e ffects and the longer run implications of such programmes.
By allowing for risk aversion and savings we are also able to quantify the insurance value of alternative programmes. We find important incentive e ffects on education choice, and labor supply, with single mothers having the most elastic labour supply. Returns to labour market experience are found to be substantial but only for full-time employment, and especially for women with more than basic formal education.
For those with lower education the welfare programmes are shown to have substantial insurance value. Based on the model marginal increases to tax credits are preferred to equally costly increases in income support and to tax cuts, except by those in the highest education group.
Full text (PDF 54pp)
Thursday, 9 May 2013
Slow progress: improving progression in the UK labour market
a research paper by Paul Garaud and Matthew Oakley (Policy Exchange) published by Policy Exchange
Executive summary
The challenge of progression
Since coming to power, the Coalition government has embarked on a radical programme of welfare reform. Its flagship Work Programme scheme is now in place and providing support to the long-term unemployed and disadvantaged to help them to enter and stay in work. In a few weeks, Universal Credit, the benefit that will replace a series of income-replacement benefits and tax credits, will begin its staged roll out. These are positive steps and the extent to which they represent a step change in our approach to welfare policy should not be underestimated.
In particular, helping claimants of in-work benefits to sustain their jobs for longer and increase their earnings (to “progress”) are now key goals of government welfare policy. This approach will significantly increase the number of people able to take on support and also subject to more intensive conditions in return for benefit. In particular, once rolled out, current claimants of tax credits who are working relatively few hours are likely to be subject to increased requirements. If successful in increasing earnings, this approach would increase living standards of families and reduce the benefit bill. However, there are significant challenges to achieving this goal.
Existing evidence tells us that staying in work and increasing earnings can be extremely difficult for individuals with relatively low levels of qualifications and for employees in low-income jobs. At the most basic level, the median length of continuous employment for those employed in the bottom decile of the earnings distribution is just over two years. For those in the top decile the equivalent figure is around eight years. Some 14% of employees in the bottom decile of the earnings distribution are in temporary employment. Only 2% of those in the top decile of the earnings distribution are in this position.
The recession clearly has an impact on the ability of some employees to increase their earnings. One respondent to our call for evidence summarised:
“How can you just ‘magic up’ extra hours if you only work part-time? Most companies can’t just give you more hours.”
However, a lack of progression is not just a result of the recession. Even during past periods of relatively strong growth we could see that the labour market in the UK was changing: jobs have become more flexible and potentially more insecure; the “job for life” is no-longer a standard form of employment; and due to technological changes, many of the jobs which were relied upon for employees to progress over their working lives no longer exist. Reports over the last decade have continually highlighted that a low-pay, no-pay cycle exists in the UK and that policy interventions are not helping to tackle it.
In particular, while around 70% of JSA claimants move off benefit within six months of initiating a JSA claim, success in terms of finding claimants sustainable work is far less convincing. As documented in our earlier report, Welfare 2.0:
Combined with a lack of evidence around policy interventions that are effective in helping people to increase their earnings, these challenges mean that the government is faced with a difficult task in designing an effective and efficient system of support and requirements. This lack of evidence makes it essential that the government is fully committed to piloting and fully evaluating potential policy interventions to help people to increase their earnings. For this reason it is encouraging that the government has issued a call for ideas in this area and looks set to implement a number of pilots.
A breakdown of in-work claimants
This commitment to piloting is even more important because our analysis suggests that a large variety of individuals and families may come under a new programme of support and requirements for in-work benefits claimants.
Overall, analysis in this report suggests that around 1.3 million people will be subject to some form of in-work requirements and support. Of these, Chapter 1 demonstrates that:
Evidence on the diversity of this group also echoes the concerns of a number of respondents to our call for evidence. In particular, because of caring responsibilities, ill health or a disability some families and individuals might have limited scope for increasing their earnings. As we outlined in Personalised Welfare, it is essential to approach these issues in a way that does not simply consider benefit type and length of claim, but instead to effectively target personalised support.
Combined with existing evidence of the chances of progression and the impact of policy, this leaves the government facing significant challenges:
Making progress
Based on the limited existing evidence and our own analysis, this report outlines areas where we believe that the government should focus its pilots. However, we are also clear that these pilots alone will not be enough. It is essential that freedom is given to Jobcentres and power devolved through the City Deals process in order to leverage a far greater range of piloting and policy innovation. By doing so, we will begin to get a better picture of policy interventions that are effective in supporting and encouraging in-work claimants to increase their earnings.
We also outline reforms that are essential to roll out now, before piloting begins. These include fundamental changes in the way in which Jobcentre performance is measured and in how Work Programme providers are rewarded for helping the claimants placed with them. Alongside these measures it will also be essential to put in place a baseline conditionality regime right from day one of Universal Credit being rolled out. Without this, the moment of change will be missed and an important opportunity to influence the attitudes and behaviour of benefit claimants lost.
Together our proposals outline the basis for a strong system of support and conditionality for in-work claimants. Once pilots have been evaluated and lessons learned, this system can be built up in order to put in place a comprehensive programme of personalised and targeted support and requirements for claimants in order to improve earnings, boost living standards and help more families move towards independence.
Executive summary
The challenge of progression
Since coming to power, the Coalition government has embarked on a radical programme of welfare reform. Its flagship Work Programme scheme is now in place and providing support to the long-term unemployed and disadvantaged to help them to enter and stay in work. In a few weeks, Universal Credit, the benefit that will replace a series of income-replacement benefits and tax credits, will begin its staged roll out. These are positive steps and the extent to which they represent a step change in our approach to welfare policy should not be underestimated.
In particular, helping claimants of in-work benefits to sustain their jobs for longer and increase their earnings (to “progress”) are now key goals of government welfare policy. This approach will significantly increase the number of people able to take on support and also subject to more intensive conditions in return for benefit. In particular, once rolled out, current claimants of tax credits who are working relatively few hours are likely to be subject to increased requirements. If successful in increasing earnings, this approach would increase living standards of families and reduce the benefit bill. However, there are significant challenges to achieving this goal.
Existing evidence tells us that staying in work and increasing earnings can be extremely difficult for individuals with relatively low levels of qualifications and for employees in low-income jobs. At the most basic level, the median length of continuous employment for those employed in the bottom decile of the earnings distribution is just over two years. For those in the top decile the equivalent figure is around eight years. Some 14% of employees in the bottom decile of the earnings distribution are in temporary employment. Only 2% of those in the top decile of the earnings distribution are in this position.
The recession clearly has an impact on the ability of some employees to increase their earnings. One respondent to our call for evidence summarised:
However, a lack of progression is not just a result of the recession. Even during past periods of relatively strong growth we could see that the labour market in the UK was changing: jobs have become more flexible and potentially more insecure; the “job for life” is no-longer a standard form of employment; and due to technological changes, many of the jobs which were relied upon for employees to progress over their working lives no longer exist. Reports over the last decade have continually highlighted that a low-pay, no-pay cycle exists in the UK and that policy interventions are not helping to tackle it.
In particular, while around 70% of JSA claimants move off benefit within six months of initiating a JSA claim, success in terms of finding claimants sustainable work is far less convincing. As documented in our earlier report, Welfare 2.0:
- Only 68% of those leaving JSA actually enter employment;
- Around a third (30%) of those leaving JSA are claiming benefits again within eight months; and
- Of those who started work nearly one in ten (8%) were employed for fewer than 16 hours a week.
Combined with a lack of evidence around policy interventions that are effective in helping people to increase their earnings, these challenges mean that the government is faced with a difficult task in designing an effective and efficient system of support and requirements. This lack of evidence makes it essential that the government is fully committed to piloting and fully evaluating potential policy interventions to help people to increase their earnings. For this reason it is encouraging that the government has issued a call for ideas in this area and looks set to implement a number of pilots.
A breakdown of in-work claimants
This commitment to piloting is even more important because our analysis suggests that a large variety of individuals and families may come under a new programme of support and requirements for in-work benefits claimants.
Overall, analysis in this report suggests that around 1.3 million people will be subject to some form of in-work requirements and support. Of these, Chapter 1 demonstrates that:
- Around two thirds of the group do not have dependent children. However, alongside these families without dependent children, there are also a significant minority of the group who are lone-parents with dependent children aged between 5 and 17;
- Almost two thirds of the group are female;
- The group has a broad mixture of individuals of different ages. However, just over half are over 45 years old;
- Nearly 45% of the group has relatively low qualifications or no formal qualifications at all;
- Many of the group are currently in stable employment, with over half having been with their current employer for over two years. However, working hours are relatively low for the majority of the group (typically between 15 and 24 hours a week); and
- A large majority of the group are not currently looking for additional employment.
Evidence on the diversity of this group also echoes the concerns of a number of respondents to our call for evidence. In particular, because of caring responsibilities, ill health or a disability some families and individuals might have limited scope for increasing their earnings. As we outlined in Personalised Welfare, it is essential to approach these issues in a way that does not simply consider benefit type and length of claim, but instead to effectively target personalised support.
Combined with existing evidence of the chances of progression and the impact of policy, this leaves the government facing significant challenges:
- A large proportion of individuals in low-paid or low-hours work do not regard progression as a priority.
- Current policy interventions (e.g. JCP) can be counter-productive to the goal of progression.
- Temporary jobs, part-time work, and mini-jobs do not, on average, appear to help individuals progress.
- Training does not, on average, appear to lead to progression, though implementation and differential impact across groups may cloud results.
- Financial incentives for employment retention may work for some groups.
- Employment retention appears to be encouraged by job-seeking while in work.
Making progress
Based on the limited existing evidence and our own analysis, this report outlines areas where we believe that the government should focus its pilots. However, we are also clear that these pilots alone will not be enough. It is essential that freedom is given to Jobcentres and power devolved through the City Deals process in order to leverage a far greater range of piloting and policy innovation. By doing so, we will begin to get a better picture of policy interventions that are effective in supporting and encouraging in-work claimants to increase their earnings.
We also outline reforms that are essential to roll out now, before piloting begins. These include fundamental changes in the way in which Jobcentre performance is measured and in how Work Programme providers are rewarded for helping the claimants placed with them. Alongside these measures it will also be essential to put in place a baseline conditionality regime right from day one of Universal Credit being rolled out. Without this, the moment of change will be missed and an important opportunity to influence the attitudes and behaviour of benefit claimants lost.
Together our proposals outline the basis for a strong system of support and conditionality for in-work claimants. Once pilots have been evaluated and lessons learned, this system can be built up in order to put in place a comprehensive programme of personalised and targeted support and requirements for claimants in order to improve earnings, boost living standards and help more families move towards independence.
Wednesday, 24 April 2013
Benefits Cap: a lack of jobs undermines the benefits of welfare reform
via JRF – Combined Feed by Helen Barnard
The benefits cap means some people may be motivated to find work – but finding a job in the first place is the problem, says Helen Barnard.
The benefits cap comes into force today [15 April]. It is a media-friendly, simple-sounding policy, which translates into a rather complicated set of rules and exemptions. The essence, explained in the House of Commons note on the cap, is that most working-age people will have the amount they can claim in benefits limited to £500 per week for couples or lone parents (regardless of the number of children) and £350 for single people; average earnings after tax and National Insurance.
Continue reading
The benefits cap means some people may be motivated to find work – but finding a job in the first place is the problem, says Helen Barnard.
The benefits cap comes into force today [15 April]. It is a media-friendly, simple-sounding policy, which translates into a rather complicated set of rules and exemptions. The essence, explained in the House of Commons note on the cap, is that most working-age people will have the amount they can claim in benefits limited to £500 per week for couples or lone parents (regardless of the number of children) and £350 for single people; average earnings after tax and National Insurance.
Continue reading
Monday, 22 April 2013
Unemployment benefits and immigration: evidence from the EU
an article by Corrado Giulietti, Martin Guzi and Klaus F. Zimmermann (IZA – Institute for the Study of Labor, Bonn, Germany) and Martin Kahanec (Central European University, Budapest, Hungary, IZA – Institute for the Study of Labor, Bonn, Germany and CELSI – Central European Labour Studies Institute, Bratislava, Slovakia) published in International Journal of Manpower Volume 34 Issue 1 (2013)
Abstract
Purpose
Economic theory predicts that unemployment benefits may increase expected income and reduce its volatility, thereby attracting immigrants to countries which implement such programs. This article aims to explore whether and how changes in countries’ unemployment benefit spending (UBS) affect immigration.
Design/methodology/approach
Data are collected for 19 European countries over the period 1993-2008. The relationship between immigration flows and UBS is first tested using the OLS technique. Instrumental variable (IV) and generalised method of moments (GMM) are then used to address reverse causality.
Findings
While the OLS estimates suggest the existence of a moderate within-country welfare magnet effect for the inflows of non-EU immigrants, the IV approach reveals that the impact is substantially smaller and statistically insignificant when GMM techniques are implemented.
Research limitations/implications
Since information on the immigrants’ country of origin is not available, it is not possible to exclude that for immigrants coming from certain areas, unemployment benefits constitute a strong incentive to immigrate. This hypothesis awaits further research, once detailed data is available.
Originality/value
This paper complements previous literature on immigration and welfare by exploring the endogenous nature of welfare spending. The empirical results provide insights into the interaction between immigration and welfare policies.
Abstract
Purpose
Economic theory predicts that unemployment benefits may increase expected income and reduce its volatility, thereby attracting immigrants to countries which implement such programs. This article aims to explore whether and how changes in countries’ unemployment benefit spending (UBS) affect immigration.
Design/methodology/approach
Data are collected for 19 European countries over the period 1993-2008. The relationship between immigration flows and UBS is first tested using the OLS technique. Instrumental variable (IV) and generalised method of moments (GMM) are then used to address reverse causality.
Findings
While the OLS estimates suggest the existence of a moderate within-country welfare magnet effect for the inflows of non-EU immigrants, the IV approach reveals that the impact is substantially smaller and statistically insignificant when GMM techniques are implemented.
Research limitations/implications
Since information on the immigrants’ country of origin is not available, it is not possible to exclude that for immigrants coming from certain areas, unemployment benefits constitute a strong incentive to immigrate. This hypothesis awaits further research, once detailed data is available.
Originality/value
This paper complements previous literature on immigration and welfare by exploring the endogenous nature of welfare spending. The empirical results provide insights into the interaction between immigration and welfare policies.
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