Child well-being during a period with welfare reform – did children in poor families gain?

This paper examines whether low-income families in Denmark increased child expenditures in the late 1990s and early 2000s. This period was characterized by the implementation of a number of labour market and family policy reforms, that contributed to getting more people into work and thereby decreasing the number of people relying on public transfers. However, the question remains whether this also had an impact on child well-being by increasing parental expenditures on child and child related goods. To analyse this question we use information from Administrative registers and the Danish Household Expenditure Survey (DHES). The method is difference- in-difference comparing information from the late 1990s with information from the early 2000s with the period in between as the treatment period. The analyses show that low-income parents’ welfare did not improve within the reform period, nor did their consumption level change relative to that of high-income families with children. Results show that Danish low-income parents have experienced much of the same development in their consumption patterns as low-income parents in the US, while faring less well than their counterparts in the UK.