Mike Brewer () (Institute for Fiscal Studies) Anita Ratcliffe (Institute for Fiscal Studies and CMPO, University of Bristol) Sarah Smith () (Institute for Fiscal Studies and Centre for Market and Public Organisation)
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In 1999 the UK government made major reforms to the system of child-contingent benefits, including the introduction of Working Families' Tax Credit and an increase in means-tested Income Support for families with children. Between 1999-2003 government spending per-child on these benefits rose by 50 per cent in real terms, a change that was unprecedented over a thirty year period. This paper examines whether there was a response in childbearing. To identify the effect of the reforms, we exploit the fact that the spending increases were targeted at low-income households and we use the (exogenously determined) education of the woman and her partner to define treatment and control groups. We argue that the reforms are most likely to have a positive fertility effect for women in couples and show that this is the case. We find that there was an increase in births (by around 15 per cent) among the group affected by the reforms.
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Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number
W08/09.
Length: 43 pp. Date of creation: Nov 2008 Date of revision: Handle: RePEc:ifs:ifsewp:08/09
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Find related papers by JEL classification: J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
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