July 2020

IZA DP No. 13484: Universal Credit and Crime

Rocco d'Este, Alex Harvey

published online as 'The Unintended Consequences of Welfare Reforms: Universal Credit, Financial Insecurity, and Crime' in: Journal of Law, Economics and Organization, 09 July 2022

We evaluate the criminogenic effects of Universal Credit (UC), a monumental welfare reform designed to radically change the social security payment system in the United Kingdom. We exploit the UC rollout across constituencies using monthly data from 2010 to 2019 for England and Wales. We find UC has caused around 45,000 burglaries, with criminogenic effects lasting until the end of the sample period and expected to grow considerably by the time UC is fully rolled out when 6.5 million more individuals will use the system. The analysis suggests the worsening of benefit recipients' financial conditions as the key mechanism.