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Eradicating Child Poverty in Britain: Welfare Reform and Children Since 1997

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  • Mike Brewer
  • Paul Gregg

    ()

Abstract

In 1997 the new Labour government in the UK inherited a situation where nearly one in 5 children lived in a household where no adult worked and around one in 3 lived in relative poverty. Children had replaced pensioners as the poorest group in society. The incoming government set about an ambitious set of reforms designed to reduce poverty and worklessness amongst families with children. This policy reform agenda contained some features akin to the welfare reform process being undertaken in the US since 1996. But with one fundamental difference, that welfare payments to jobless families rose rapidly and there is no time restriction in access to these payments. This paper describes the key features of the welfare reform process and documents the reforms to welfare payments and in particular contrasts them with the US system. The results show that the reformed UK welfare support system, taxes and benefits, for children is more generous to low-income families with children but less for better off families. So the UK system is more progressive among families with children. The paper goes on to look at the emerging evidence of the impact of the UK policy reform process on poverty and welfare dependence.

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Bibliographic Info

Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 02/052.

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Length: 41 pages
Date of creation: Oct 2002
Date of revision:
Handle: RePEc:bri:cmpowp:02/052

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Keywords: welfare reform; poverty; children;

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References

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  1. Stephen Nickell & Patricia Jones & Glenda Quintini, 2002. "A Picture of Job Insecurity Facing British Men," Economic Journal, Royal Economic Society, vol. 112(476), pages 1-27, January.
  2. Nada Eissa & Hilary Williamson Hoynes, 2000. "The Earned Income Tax Credit and the Labor Supply of Married Couples," Public Economics 9912001, EconWPA.
  3. Bruce Bradbury & Markus Jantti, 1999. "Child Poverty across Industrialized Nations," Innocenti Occasional Papers, Economic Policy Series iopeps99/70, UNICEF Innocenti Research Centre.
  4. Currie, Janet & Thomas, Duncan, 1995. "Does Head Start Make a Difference?," American Economic Review, American Economic Association, vol. 85(3), pages 341-64, June.
  5. Gosling, Amanda & Machin, Stephen & Meghir, Costas, 2000. "The Changing Distribution of Male Wages in the U.K," Review of Economic Studies, Wiley Blackwell, vol. 67(4), pages 635-66, October.
  6. David T. Ellwood & Jeffrey B. Liebman, 2000. "The Middle Class Parent Penalty: Child Benefits in the U.S. Tax Code," NBER Working Papers 8031, National Bureau of Economic Research, Inc.
  7. Richard Dickens & David Ellwood, 2001. "Whither Poverty in Great Britain and the United States? The Determinants of Changing Poverty and Whether Work Will Work," CEP Discussion Papers dp0506, Centre for Economic Performance, LSE.
  8. William Gale, 1997. "What can America learn from the British tax system?," Fiscal Studies, Institute for Fiscal Studies, vol. 18(4), pages 341-369, November.
  9. Nolan, Brian & Whelan, Christopher T., 1996. "Resources, Deprivation, and Poverty," OUP Catalogue, Oxford University Press, number 9780198287858.
  10. Stephen P. Jenkins & Christian Schluter & Gert G. Wagner, 2001. "The Dynamics of Child Poverty: Britain and Germany Compared," Discussion Papers of DIW Berlin 233, DIW Berlin, German Institute for Economic Research.
  11. Hilary Hoynes & Richard Blundell, 2001. "Has "In-Work" Benefit Reform Helped the Labour Market?," NBER Working Papers 8546, National Bureau of Economic Research, Inc.
  12. Proceedings from a workshop organised by HM Treasury and CASE, 1999. "Persistent Poverty and Lifetime Inequality: The evidence," CASE Reports casereport05, Centre for Analysis of Social Exclusion, LSE.
  13. David Piachaud & Holly Sutherland, 2000. "How Effective is the British Governments Attempt to Reduce Child Poverty?," CASE Papers case38, Centre for Analysis of Social Exclusion, LSE.
  14. Richard Blundell & Alan Duncan & Julian McCrae & Costas Meghir, 2000. "The labour market impact of the working families’ tax credit," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 75-103, March.
  15. Blundell, Richard, 2000. "Work Incentives and 'In-Work' Benefit Reforms: A Review," Oxford Review of Economic Policy, Oxford University Press, vol. 16(1), pages 27-44, Spring.
  16. David G. Blanchflower & Richard B. Freeman, 2000. "Youth Employment and Joblessness in Advanced Countries," NBER Books, National Bureau of Economic Research, Inc, number blan00-1.
  17. Mike Brewer, 2000. "Comparing in-work benefits and financial work incentives for low-income families in the US and the UK," IFS Working Papers W00/16, Institute for Fiscal Studies.
  18. Nada Eissa & Jeffrey B. Liebman, 1995. "Labor Supply Response to the Earned Income Tax Credit," NBER Working Papers 5158, National Bureau of Economic Research, Inc.
  19. Paul Gregg & Jonathan Wadsworth, . "More work in fewer households?," NIESR Discussion Papers 72, National Institute of Economic and Social Research.
  20. Gregg, Paul & Wadsworth, Jonathan, 2000. "Mind the Gap, Please: The Changing Nature of Entry Jobs in Britain," Economica, London School of Economics and Political Science, vol. 67(268), pages 499-524, November.
  21. Gregg, Paul, 2001. "The Impact of Youth Unemployment on Adult Unemployment in the NCDS," Economic Journal, Royal Economic Society, vol. 111(475), pages F626-53, November.
  22. Mike Brewer, 2001. "Comparing in-work benefits and the reward to work for families with children in the US and the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 22(1), pages 41-77, January.
  23. Richard Layard & Steven McIntosh & Anna Vignoles, 2002. "Britains Record on Skills," CEE Discussion Papers 0023, Centre for the Economics of Education, LSE.
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Citations

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Cited by:
  1. Wolfgang Ochel, 2001. "Financial Incentives to Work - Conceptions and Results in Great Britain, Ireland and Canada," CESifo Working Paper Series 627, CESifo Group Munich.
  2. Gregg, Paul & Waldfogel, Jane & Washbrook, Elizabeth, 2006. "Family expenditures post-welfare reform in the UK: Are low-income families starting to catch up?," Labour Economics, Elsevier, vol. 13(6), pages 721-746, December.
  3. Bennett, Roger, 2007. "Advertising message strategies for encouraging young White working class males to consider entering British universities," Journal of Business Research, Elsevier, vol. 60(9), pages 932-941, September.
  4. Wolfgang Ochel, 2003. "Welfare to Work in the United Kingdom," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 1(2), pages 56-62, 02.

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