We evaluate the unintended effects of Universal Credit (UC), a monumental welfare reform that has increased the stringency of the UK social security payment system. We exploit the rollout of UC across constituencies, targeting first-time claimants, predominantly young males. Using monthly data from 2010 to 2019 for England and Wales, we first document the negative economic impacts of UC, showing it has led to an increase of around 6000 repossession orders from the social housing sector. We then focus on UC’s criminogenic effects, finding the reform has caused around 35,000 burglaries and 25,000 vehicle crimes. Collectively, our findings highlight the danger of welfare policies affecting the economic incentives of individuals at the bottom of the income distribution. They also have timely policy relevance considering 6.5 million benefit recipients will soon transition onto UC. (JEL K14, K42).

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Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.