There is limited research on the effect of unpaid care on the public finances, and on the inequalities present when providing support to those with caring responsibilities. The aims of this research are to estimate the overall costs to the State of providing care, and to identify sub-groups of carers with relatively greater costs to the government who may need more support. We used waves eight to ten from the United Kingdom Household Longitudinal Survey and performed two-part Generalised Linear Models and Propensity Score Matching. We found that providing care is associated with excess and potentially avoidable costs to government in terms of forgone earnings-related tax revenue, welfare benefits, and health service use. Older carers have lower healthcare costs, indicating, perhaps, issues related to accessing to services due to their role (as they may neglect their own health, worry about safety and costs of public transport). Older carers were also found to have lower levels of welfare benefits, suggesting challenges associated with applying for support (such as navigating cumbersome application processes and stigma-related barriers).

Introduced in the United Kingdom in 2012, Universal Credit (UC) is a welfare benefit that replaces six working-age ‘legacy’ benefits for out-of-work and low-income people. Designed with the aim of simplifying benefits and incentivising paid work, UC represents a deepening of conditionality in the British welfare state. Considering these developments, this paper quantitatively investigates the effect of UC on recipients’ life satisfaction. Data from the United Kingdom Household Longitudinal Study is analysed, primarily using a fixed-effects regression approach. Results reveal a significantly negative effect of UC recipience on life satisfaction. Robustness checks and alternative model specifications, including difference-in-differences and inverse probability weighting, confirm this finding. Additionally, mediation models give credence to the idea that UC also negatively affects life satisfaction indirectly by increasing psychological distress. Heterogeneity tests indicate that UC has a less negative effect on single parents’ life satisfaction compared to non-parents. Meanwhile, UC has a significantly more negative effect on the life satisfaction of people not in paid work (for reasons other than unemployment) than those in paid work. Discussion focuses on the potential effect of welfare conditionality specifically, and implications for future research and policy are explored.