Understanding the Determinants and Dynamics of Disability Benefit Receipt in the UK
This research aims to analyse how likely people are to move onto and off disability benefits (particularly Incapacity Benefit and/or Employment and Support Allowance) and how long individuals receive these benefits; how these vary with personal characteristics and by region; how the situation has changed over time, particularly with the reform of disability benefits and the move from Incapacity Benefit (IB) to Employment and Support Allowance (ESA). As such, it will contribute to the policy debate about the impact of changes to disability benefits over the last decade. It also aims to compare people who apply successfully for disability benefits with those whose applications are unsuccessful to understand the extent to which these benefits are a disincentive to work.
The research aims to improve our understanding of how disability benefits affect labour supply, and in doing so, help to design effective welfare policy. Such evidence is timely given the government’s current aim to reduce the ‘disability employment gap’.
Department of Work and Pensions (DWP)
More about the research
The research project has two aims. The first is to provide a descriptive analysis of transitions into and out from disability benefits (particularly Incapacity Benefit and/or Employment and Support Allowance) and the associated duration of disability benefit receipt. It will explore how these vary with personal and health related characteristics and by region. It will also consider how the situation has changed over time, particularly with the reform of disability benefits and the move from Incapacity Benefit (IB) to Employment and Support Allowance (ESA). It will add to and update the largely historical UK academic evidence on the determinants of disability benefit receipt and labour market outcomes post benefit receipt, and will contribute to the policy debate about the impact of changes to disability benefits over the last decade. It will complement existing UK evidence based on survey data and the more developed international literature which uses administrative data.
The second aim is subject to data being available on (unsuccessful) applications for disability benefit and will explore the labour market disincentives associated with benefit receipt by making a
comparison between those accepted (treatment) and rejected (control) from the scheme. This is an established approach in the US literature (see Von Wachter, Song and Manchester, 2011) and forms an important strand in the international evidence on the labour supply incentives of disability benefits where administrative data is more routinely available.
In summary, the project will use administrative data extracted from routinely collected information on welfare benefits to identify who is most likely to start and end claims of outofwork disability benefits. It will similarly examine the labour market experience before and after claiming disability benefits. Further, it will explore how these have changed over a period of welfare reform, particularly the movement from Incapacity Benefit to Employment and Support Allowance. It will also look to use unsuccessful applicants to identify the labour market outcomes that may be expected of those in receipt of disability benefits should they not have been awarded these benefits to assess the extent to which disability benefits form a disincentive to work in the UK.
Research team/lead researcher
Melanie Jones, Cardiff University
Duncan McVicar, Queens University Belfast