King's College London

The research, focusing on the UK’s Personal Independence Payment (PIP), challenges the assumption that such benefits inherently reduce employment.

PIP, introduced in the UK in 2013 to replace the Disability Living Allowance (DLA), provides financial support to people with long-term health conditions regardless of their employment status.

Unlike many disability programs, it does not reduce payments if recipients work, allowing researchers to isolate the ‘income effect’ of benefits.

Using data from the UK Household Longitudinal Study, the study authors – Bouke Klein Teeselink (King’s College London) and Georgios Melios (London School of Economics) – examined two natural experiments: regional variation in benefit assessment providers and differing eligibility changes across health conditions.

They found that while stricter benefit assessments led to a small increase in employment (2.9-3.3 percentage points), changes in benefit receipt due to health condition eligibility had almost no effect on employment.

The academics found that people with pre-existing mental health conditions, who saw a 5.9 percentage point increase in benefit receipt after the introduction of PIP, showed no reduction in levels of employment. Similarly, those with minor physical disabilities who often lost benefits after PIP was introduced did not increase work.

The researchers suggest these mixed results may be explained by claimant motivation. For those with pre-existing health conditions, the benefit payments may facilitate work by helping to cover health-related costs. Conversely, stricter assessments might filter out individuals with a greater capacity to work who were strategically seeking benefits, prompting their return to the labour market.

“By removing the artificial link between benefit receipt and work incapacity, programs like PIP can provide income security while preserving employment incentives and individual agency.

“As aging populations and rising disability caseloads strain social insurance systems worldwide, our findings suggest that reimagining disability support as a supplement for extra costs rather than a replacement for earnings offers a promising path forward.”