Fewer Adults Receiving Social Security Benefits in U.K., But Some Remain on Benefits For Long Time

Researchers at the Institute for Social and Economic Research (ISER) at the University of Essex used data from the British Household Panel Survey, which has interviewed the same people annually since 1991, to look at histories of receipt of benefits such as Income Support and Job Seekers Allowance. The team found that, among those who were receiving safety net benefits, the fraction with health problems increased from around 53% in the early 1990s to 76% in 2005. Another stark change was the decline in the percentage of beneficiaries who own their own home, which approximately halved over the same period – from 41% to 23%.

In a detailed examination of the trends, Professor Stephen Jenkins and Dr Lorenzo Cappellari found that the fall in the percentage of working age adults receiving safety net benefits was due mainly to a decline in the rate of entry into benefit receipt between one year and the next. This offset the effect of a fall in the rate at which people left the benefit system between one year and the next – which would otherwise tend to increase the number of benefit recipients.

Commenting on the research, commissioned by the Organisation for Economic Co-operation and Development, Professor Jenkins said: “Our findings show that, although safety net social security benefits are received by fewer people than before, those who do end up receiving them are increasingly those who are more likely to be stuck on benefits for a long time.”

Professor Jenkins believes that a significant part of the fall in the proportion of working age adults receiving safety net social security benefits can be explained by a downward trend in the number of people without educational qualifications, and improvements in the state of the economy since the early 1990s.

The Labour government’s “welfare to work” policies aimed at increasing employment rates and making work pay are also likely to have played some role in explaining these trends. But ISER’s detailed analysis of the trends shows that these policy changes are only part of the story. “The timing of changes in rates of movement onto and off benefit do not match up with the dates of introduction of policies such as tax credits. More research on specific policies and groups at risk is needed here,” Professor Jenkins said.