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Expenditure Patterns Post-Welfare Reform in the UK: Are low-income families starting to catch up?

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  • Paul Gregg
  • Jane Waldfogel
  • Elizabeth Washbrook

Abstract

In this paper we provide evidence on how the UK government's welfare reforms since 1998 have affected the material well-being of children in low-income families. We examine changes in expenditure patterns and ownership of durable goods for low- and higher-income families between the pre-reform period (1995-1998) and the post-reform period (2000-2003), using data from the Family Expenditure Survey. The methodological approach is a difference-in-difference-in-difference analysis that exploits the fact that age variation in the reforms favoured low-income families over higher-income ones and families with children age under 11 over those with older children. We find that low-income families with children are catching up to more affluent families, in their expenditures and their possession of durable goods. Moreover, expenditures on child-related items are increasing faster than expenditures on other items.

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File URL: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper99.pdf
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Bibliographic Info

Paper provided by Centre for Analysis of Social Exclusion, LSE in its series CASE Papers with number 099.

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Date of creation: May 2005
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Handle: RePEc:cep:sticas:099

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Web page: http://sticerd.lse.ac.uk/case/_new/publications/default.asp

Related research

Keywords: child poverty; family expenditures; welfare reform; difference-in-difference;

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  1. Case, Anne & Deaton, Angus, 1998. "Large Cash Transfers to the Elderly in South Africa," Economic Journal, Royal Economic Society, vol. 108(450), pages 1330-61, September.
  2. Hills, John, 2004. "Inequality and the State," OUP Catalogue, Oxford University Press, number 9780199276646.
  3. Blow, Laura & Walker, Ian & Zhu, Yu, 2006. "Who benefits from Child Benefit?," The Warwick Economics Research Paper Series (TWERPS) 749, University of Warwick, Department of Economics.
  4. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," NBER Working Papers 8983, National Bureau of Economic Research, Inc.
  5. Paul Gregg & Susan Harkness, 2003. "Welfare Reform and Lone Parents Employment in the UK," The Centre for Market and Public Organisation 03/072, Department of Economics, University of Bristol, UK.
  6. Brewer, Mike & Duncan, Alan & Shephard, Andrew & Suarez, Maria Jose, 2006. "Did working families' tax credit work? The impact of in-work support on labour supply in Great Britain," Labour Economics, Elsevier, vol. 13(6), pages 699-720, December.
  7. Richard Dickens & David T Ellwood, 2003. "Child Poverty in Britain and the United States," Economic Journal, Royal Economic Society, vol. 113(488), pages F219-F239, 06.
  8. Mike Brewer & Tom Clark & Matthew Wakefield, 2002. "Social security in the UK under New Labour: what did the Third Way mean for welfare reform?," Fiscal Studies, Institute for Fiscal Studies, vol. 23(4), pages 505-537, December.
  9. Shelly J. Lundberg & Robert A. Pollak & Terence J. Wales, 1997. "Do Husbands and Wives Pool Their Resources? Evidence from the United Kingdom Child Benefit," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 463-480.
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