Estimating population mental health effects of the rollout of Universal Credit in the UK using standard and novel Difference-in-Differences analysis, 2009-2019

Abstract

Objectives: Universal Credit (UC) was introduced in the UK in April 2013 in selected areas, marking the beginning of its phased rollout. Previous research identifies acute health harms among unemployed people, but the policy's impacts longer-term and on broader claimant groups remain unknown. This study explored UC effects on population mental health for up to four years post-introduction on a larger cohort of claimants, including employed people.

Study design: Longitudinal study.

Methods: We used data from the UK Household Longitudinal Study between 2009 and 2019 linking 108,247 observations (29,528 working age participants) to administrative UC Local Authority district data. We compared a UC-eligible population - reporting receipt of either UC or any of six legacy benefits (treatment group) - to individuals receiving alternative benefits (comparison group). We used standard and novel difference-in-differences approaches, exploiting geographical variation of UC rollout, and accounting for heterogeneity in treatment timing, to estimate mental health impacts (SF-12 Mental Component Summary) on average and at different time points post-introduction.

Results: UC was associated with mental health declining by 0·70 units (95 % CI -1·24 to -0·15), a 1·5 % relative reduction. Effects were larger during the first year of exposure (-1·01, 95 % CI -1·93 to -0·10) without returning to baseline levels. Between 2013 and 2019, an estimated 111,954 (95 % CI 35,497 to 182,948) additional people experienced depression and/or anxiety after UC's introduction, 27,115 of whom may have reached diagnostic threshold for common mental disorders.

Conclusions: UC led to a sustained deterioration in population mental health, particularly marked in the first year of implementation. Reforms to UC are warranted to mitigate adverse mental health impacts.

Keywords: Difference-in-Differences; Health inequalities; Population mental health; Social welfare reform; Universal Credit.