Which works: cash or conditionality?

I went to a lunchtime talk earlier this week given by Lawrence Mead at Civitas. Mead is a distinguished academic and author of Government Matters, a valuable book about welfare reform in the USA – in Wisconsin in particular.
He has strong views about what really makes a difference – what really brings the numbers dependent on benefit down. What is more, he says he has a great deal of data to support his view, including experimental data (which is generally harder to come by in social sciences). So which policy works? Is the key thing always to make it clearly financially worthwhile to work? Or is it to have strict conditions and encouragement for claimants to get work?
He says it is very definitely the latter. He says that even if claimants talk about money, what shapes their behaviour is the conditionality and encouragement.
Being one of the many who has thought that the financial side was surely important, too, I suggested that perhaps Britain was different in that possibly our benefits were higher in relation to low pay, so that the discouragement to work was stronger. Perhaps at this level, the low paid and those on benefits were very conscious of the financial disincentive and more responsive to it.
He firmly resisted this idea although he seemed to agree that the benefit levels in the USA were lower than those in the UK.
Other people in the audience contributed some evidence that people in the UK were being influenced by the financial disincentives. Mead was far too good an academic to imply, even, that he did not care about the evidence here but he was firm in demanding that the evidence be really good. Meanwhile he had plenty of evidence the other way. I guess this is a debate in the US in which he has been accustomed to fighting his corner.
I hope to have more on this issue in the future.
ps An adviser to Ian Duncan Smith, the Secretary of State for Work and Pensions, was in the audience. Ian Duncan Smith’s view, of course, has been that the financial disincentives to work matter a great deal. The new reform he plans are centred on this idea though they also involve much more conditionality and encouragement, too.

  1. That old chestnut that the Tories shunted people onto Invalidity Benefit in the 1980s in order to keep down the unemployment figures
  2. Parents live apart ‘to cash in on benefits system’
  3. Welfare reform reduced poverty in America. When will the Tories endorse it?
  4. An estimate that 1.8m of the ‘sick’ could do some work
  5. Welfare reform Green Paper comes out today
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One Response to Which works: cash or conditionality?

  1. rie says:

    I ask you this: what happens to those people who are simply unable to work? (Due to severe physical/mental illness*)
    (*Although the latter, I would argue, would benefit psychologically from some part time work.)

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