Government's welfare reforms mean overall work incentives modestly strengthened despite wage falls

New IFS research, launched at a conference in London today, shows that the coalition government's tax and benefit reforms will strengthen peoples' incentives to work on average. This strengthening more than offsets the weakening in work incentives that would have occurred in the absence of policy change as a result of falling real earnings.

The report considers reforms that have been implemented, or are due to be implemented, from when the coalition government took office in May 2010 until the scheduled end of its term of office in May 2015. The reforms examined involve significant changes to existing personal taxes (raising £11 billion a year) and benefits (saving £22 billion a year) and the integration of six existing benefits into universal credit (broadly revenue-neutral).