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Whither Poverty in Great Britain and the United States? The Determinants of Changing Poverty and Whether Work Will Work

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Author Info
Richard Dickens
David T. Ellwood

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Abstract

Scholars emphasize that poverty in Britain has risen sharply since the late 1970s. Meanwhile in the United States, both official figures and traditional poverty scholars report sharp declines in poverty. We seek to provide a comparison of poverty levels in Britain and the US based on a set of common definitions. We then proceed to ask what factors-demographic, economic, or policy-account for the observed changes in poverty in the two nations and what role could policy play in reducing poverty? We develop a procedure that allows one to trace out the relative impacts of altered demographics, rising wage inequality, work changes, and policy innovations in explaining changing poverty patterns. We find that the forces influencing poverty differ between nations and across absolute and relative poverty measures. Demographic and wage change is a dominant force in both nations. Britain has experienced a dramatic rise in workless households while the US has simultaneously had a sharp fall. These differences had a sizable impact on absolute poverty in both nations and a significant impact on relative poverty in Britain. Government benefits directly reduced relative and absolute poverty considerably in Britain over this period but had little impact in the US. However, changing patterns of benefits and work suggest that policy changes have significantly increased work in the US, particularly among single parents. In Britain, policy changes may have had the reverse effect, reducing work among many groups. The UK government has committed itself to reducing child poverty by half over the next 10 years and to its abolition within 20 years, largely through policy changes designed to make work pay. We conclude that any purely work-based strategy, which doesn't tackle demographics and wage dispersion, may not have a dramatic effect on relative poverty.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8253.

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Date of creation: Apr 2001
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Publication status: published as Dickens, Richard and David T. Ellwood. "Child Poverty In Britain And The United States," Economic Journal, 2003, v113(488,Jun), F219-239.
Handle: RePEc:nbr:nberwo:8253

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I3 - Health, Education, and Welfare - - Welfare and Poverty

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Booth, Alison L. & Ours, Jan C. van, 2006. "Hours of work and gender identity : does part-time work make the family happier?," Discussion Paper 2, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  2. repec:ese:iserwp: is not listed on IDEAS
  3. Danny Quah, 2002. "Spatial Agglomeration Dynamics," CEP Discussion Papers 0521, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  4. Arnstein Aassve & Simon Burgess & Matt Dickson & Carol Propper, 2005. "Modelling Poverty by not Modelling Poverty: An Application of a Simultaneous Hazards Approach to the UK," The Centre for Market and Public Organisation 05/134, Department of Economics, University of Bristol, UK. [Downloadable!]
    Other versions:
  5. Sue Fernie & Helen Gray, 2002. "Its a Family Affair: the Effect of Union Recognition and Human Resource Management on the Provision of Equal Opportunities in the UK," CEP Discussion Papers 0525, Centre for Economic Performance, LSE. [Downloadable!]
  6. Richard Dickens & Alan Manning, 2002. "Has The National Minimum Wage Reduced UK Wage Inequality?," CEP Discussion Papers 0533, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  7. Stephen Nickell, 2003. "Poverty and Worklessness in Britain," CEP Discussion Papers dp0579, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  8. Matthias Weiss, 2004. "Skill-Biased Technological Change: Is there Hope for the Unskilled?," MEA discussion paper series 04045, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
    Other versions:
  9. James J. Heckman & Dimitriy V. Masterov, 2005. "Allander Series: Skill Policies for Scotland," NBER Working Papers 11032, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Mike Brewer & Paul Gregg, 2001. "Eradicating child poverty in Britain: welfare reform and children since 1997," IFS Working Papers W01/08, Institute for Fiscal Studies. [Downloadable!]
    Other versions:
  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. [Downloadable!] (restricted)
  12. Ian Irvine & Kuan Xu, 2002. "Crime, Punishment and Poverty in the United States," Department of Economics at Dalhousie University working papers archive uspov, Dalhousie, Department of Economics. [Downloadable!]
  13. Heckman, James J. & Masterov, Dimitriy V., 2004. "Skill Policies for Scotland," IZA Discussion Papers 1444, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  14. Alan Manning, 2001. "Monopsony and the Efficiency of Labour Market Interventions," CEP Discussion Papers 0514, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
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