Families of Austerity: Welfare Cuts and Family Stress in Britain

Studies have widely documented how families fare when receiving income boosts. Relatively little is known about the intergenerational effects of income losses, especially those resulting from austerity measures pursued after the Great Recession. Income loss can trigger family stress, whereby financial hardship hastens psychological distress and disrupts parenting and parent-child relationships. Such family stress can hinder socio-emotional development in children, a key factor shaping their future life chances. We assess if and how austerity measures can aggravate family stress and its consequences, tackling the case of Britain in the period 2009-2018. Extensive tax-benefit reform is exploited for identification. Based on a large longitudinal sample of parents and their adolescent children (UK Household Longitudinal Study), we show that austerity-induced benefit income loss may impinge on household finances, as signalled by housing arrears, and lead to worsening maternal mental health, strained parent-child relationships and less effective parenting, as well as increased problem behaviour among boys. Although benefit income loss also pushes parents into employment, neither the economic losses nor the stress stemming from welfare cutbacks are found to be offset by labour earnings in low-income households, where parents and children bear the brunt of austerity.