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British tax credit simplification, the intra-household distribution of income and family consumption

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  • Paul Fisher

Abstract

This paper asks whether targeting welfare benefits to women can be effective at changing household spending. We provide empirical evidence on this question by using a reform to the UK tax-credit system in 2003 as a quasi-experiment. We find that the reform caused low-income households to reallocate spending towards children’s goods. The results further demonstrate that the effects of directing welfare benefits to women can extend beyond child expenditures to goods that are collectively consumed by all household members. Our findings are in contrast to those from earlier studies that took place in the economic setting of 1970s UK.

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  • Paul Fisher, 2016. "British tax credit simplification, the intra-household distribution of income and family consumption," Oxford Economic Papers, Oxford University Press, vol. 68(2), pages 444-464.
    • Handle: RePEc:oup:oxecpp:v:68:y:2016:i:2:p:444-464.
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    3. J. M. C. Santos Silva & Silvana Tenreyro, 2022. "The Log of Gravity at 15," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 21(3), pages 423-437, September.
    4. Karen Mumford & Antonia Parera‐Nicolau & Yolanda Pena‐Boquete, 2020. "Labour Supply and Childcare: Allowing Both Parents to Choose," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(3), pages 577-602, June.
    5. Luis Ayala & Milagros Paniagua, 2019. "The impact of tax benefits on female labor supply and income distribution in Spain," Review of Economics of the Household, Springer, vol. 17(3), pages 1025-1048, September.
    6. Panayiota Lyssiotou, 2018. "Gender bias in the spending of child benefits: evidence from a natural policy reform," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(4), pages 1029-1070, August.
    7. Beznoska, Martin, 2019. "Do couples pool their income? Evidence from demand system estimation for Germany," Discussion Papers 2019/3, Free University Berlin, School of Business & Economics.
    8. Miriam Beblo & Denis Beninger, 2017. "Do husbands and wives pool their incomes? A couple experiment," Review of Economics of the Household, Springer, vol. 15(3), pages 779-805, September.
    9. Beznoska, Martin, 2019. "Do Couples Pool Their Income?," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203490, Verein für Socialpolitik / German Economic Association.

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