Effect of Universal Credit on young children's mental health: quasi-experimental evidence from Understanding Society.

Background: Child mental health has become an increasingly important issue in the UK, especially in the context of significant welfare reforms. Universal Credit (UC) has introduced substantial changes to the UK's social security system, significantly impacting low-income families. Our aim was to assess the effects of UC's introduction on children's mental health for families eligible for UC versus a comparable non-eligible sample.

Methods: Using Understanding Society data from 5806 observations of 4582 children (aged 5 or 8 years) in Great Britain between 2012 and 2018, we created two groups: children whose parents were eligible for UC (intervention group) and children whose parents were ineligible for UC (comparison group). Child mental health was assessed using a parent-reported Strengths and Difficulties Questionnaire. The OR and percentage point change in the prevalence of children experiencing mental health difficulties between the intervention group and the comparison group following the introduction of UC were analysed. We also investigated whether the utilisation of childcare services and changes in household income were mechanisms by which UC impacted children's mental health.

Results: Logistic regression results demonstrated that the prevalence of mental health problems among eligible children whose parents were unemployed increased by an OR of 2.18 (95% CI 1.14 to 4.18), equivalent to an 8-percentage point increase (95% CI 1 to 14 percentage points) following the introduction of UC, relative to the comparison group. Exploring potential mechanisms, we found neither reduced household income nor increased use of childcare services, which served as a proxy for reduced time spent with parents, significantly influenced children's mental health.

Conclusions: UC has led to an increase in mental health problems among recipient children, particularly for children in larger families and those aged 8. Policymakers should carefully evaluate the potential health consequences for specific demographics when introducing new welfare policies.