IDEAS home Printed from https://ideas.repec.org/a/spr/jopoec/v25y2012i1p245-266.html
   My bibliography  Save this article

Does welfare reform affect fertility? Evidence from the UK

Author

Listed:
  • Mike Brewer
  • Anita Ratcliffe
  • Sarah dSmith

Abstract

This paper provides evidence on the effect of welfare reform on fertility, focusing on UK reforms in 1999 that increased per-child spending by 50% in real terms. We use a difference-in-differences approach, exploiting the fact that the reforms were targeted at low-income households. The reforms were likely to differentially affect the fertility of women in couples and single women because of the opportunity cost effects of the welfare-to-work element. We find no increase in births among single women, but evidence to support an increase in births (by around 15%) among coupled women. Copyright Springer-Verlag 2012

Suggested Citation

  • Mike Brewer & Anita Ratcliffe & Sarah dSmith, 2012. "Does welfare reform affect fertility? Evidence from the UK," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(1), pages 245-266, January.
    • Handle: RePEc:spr:jopoec:v:25:y:2012:i:1:p:245-266
    DOI: 10.1007/s00148-010-0332-x
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s00148-010-0332-x
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s00148-010-0332-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Richard Blundell & Alan Duncan & Julian McCrae & Costas Meghir, 2000. "The labour market impact of the working families’ tax credit," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 75-103, March.
    2. Richard Blundell & Monica Costa Dias, 2009. "Alternative Approaches to Evaluation in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    3. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
    4. Nada Eissa & Jeffrey B. Liebman, 1996. "Labor Supply Response to the Earned Income Tax Credit," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 605-637.
    5. Marco Francesconi & Wilbert van der Klaauw, 2007. "The Socioeconomic Consequences of "In-Work" Benefit Reform for British Lone Mothers," Journal of Human Resources, University of Wisconsin Press, vol. 42(1).
    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. Stacy Dickert-Conlin & Amitabh Chandra, 1999. "Taxes and the Timing of Birth," Journal of Political Economy, University of Chicago Press, vol. 107(1), pages 161-177, February.
    8. Mike Brewer, 2001. "Comparing in-work benefits and the reward to work for families with children in the US and the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 22(1), pages 41-77, January.
    9. Laroque, Guy & Salanié, Bernard, 2005. "Does Fertility Respond to Financial Incentives?," CEPR Discussion Papers 5007, C.E.P.R. Discussion Papers.
    10. Whittington, Leslie A & Alm, James & Peters, H Elizabeth, 1990. "Fertility and the Personal Exemption: Implicit Pronatalist Policy in the United States," American Economic Review, American Economic Association, vol. 80(3), pages 545-556, June.
    11. Paul Gregg & Susan Harkness & Sarah Smith, 2009. "Welfare Reform and Lone Parents in the UK," Economic Journal, Royal Economic Society, vol. 119(535), pages 38-65, February.
    12. Guy Laroque & Bernard Salanié, 2004. "Fertility and Financial Incentives in France," CESifo Economic Studies, CESifo Group, vol. 50(3), pages 423-450.
    13. Paul Gregg & Susan Harkness, 2003. "Welfare Reform and Lone Parents Employment in the UK," The Centre for Market and Public Organisation 03/072, The Centre for Market and Public Organisation, University of Bristol, UK.
    14. Kevin Milligan, 2005. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 539-555, August.
    15. Leigh, Andrew, 2007. "Earned Income Tax Credits and Labor Supply: New Evidence From a British Natural Experiment," National Tax Journal, National Tax Association;National Tax Journal, vol. 60(2), pages 205-224, June.
    16. Phillip B. Levine, 2002. "The Impact of Social Policy and Economic Activity Throughout the Fertility Decision Tree," NBER Working Papers 9021, National Bureau of Economic Research, Inc.
    17. Angrist, Joshua D. & Krueger, Alan B., 1999. "Empirical strategies in labor economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 23, pages 1277-1366, Elsevier.
    18. Paul Gregg & Susan Harkness, 2003. "Welfare Reform and the Employment of Lone Parents," Palgrave Macmillan Books, in: Richard Dickens & Paul Gregg & Jonathan Wadsworth (ed.), The Labour Market Under New Labour, chapter 7, pages 98-115, Palgrave Macmillan.
    19. Dan Anderberg, 2008. "Tax credits, income support, and partnership decisions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(4), pages 499-526, August.
    20. Leslie Whittington, 1992. "Taxes and the Family: The impact of the tax exemption for dependents on marital fertility," Demography, Springer;Population Association of America (PAA), vol. 29(2), pages 215-226, May.
    21. Williamson Hoyne, Hilary, 1997. "Does welfare play any role in female headship decisions?," Journal of Public Economics, Elsevier, vol. 65(2), pages 89-117, August.
    22. Ellwood, David T., 2000. "The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements," National Tax Journal, National Tax Association, vol. 53(n. 4), pages 1063-1106, December.
    23. Besley, Timothy & Case, Anne, 2000. "Unnatural Experiments? Estimating the Incidence of Endogenous Policies," Economic Journal, Royal Economic Society, vol. 110(467), pages 672-694, November.
    24. repec:bla:econom:v:68:y:2001:i:269:p:105-25 is not listed on IDEAS
    25. Reagan Baughman & Stacy Dickert-Conlin, 2003. "Did Expanding the EITC Promote Motherhood?," American Economic Review, American Economic Association, vol. 93(2), pages 247-251, May.
    26. John Ermisch, 1988. "Econometric Analysis of Birth Rate Dynamics in Britain," Journal of Human Resources, University of Wisconsin Press, vol. 23(4), pages 563-576.
    27. Eissa, Nada & Hoynes, Hilary Williamson, 2004. "Taxes and the labor market participation of married couples: the earned income tax credit," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1931-1958, August.
    28. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-338, May.
    29. Ellwood, David T., 2000. "The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(4), pages 1063-1106, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richard Blundell & Mike Brewer & Marco Francesconi, 2008. "Job Changes and Hours Changes: Understanding the Path of Labor Supply Adjustment," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 421-453, July.
    2. Azmat, Ghazala & González, Libertad, 2010. "Targeting fertility and female participation through the income tax," Labour Economics, Elsevier, vol. 17(3), pages 487-502, June.
    3. Dan Anderberg, 2008. "Tax credits, income support, and partnership decisions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(4), pages 499-526, August.
    4. Richard Blundell & Mike Brewer & Marco Francesconi, 2005. "Job changes, hours changes and the path of labour supply adjustment," IFS Working Papers W05/21, Institute for Fiscal Studies.
    5. Helmut Rainer & Stefan Bauernschuster & Natalia Danzer & Timo Hener & Christian Holzner & Janina Reinkowski, 2013. "Kindergeld," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 60.
    6. Ghazala Azmat, 2019. "Incidence, salience, and spillovers: The direct and indirect effects of tax credits on wages," Quantitative Economics, Econometric Society, vol. 10(1), pages 239-273, January.
    7. Jacob Nielsen Arendt & Christophe Kolodziejczyk, 2019. "The Effects of an Employment Bonus for Long-Term Social Assistance Recipients," Journal of Labor Research, Springer, vol. 40(4), pages 412-427, December.
    8. Xiaodong Gong & Robert Breunig, 2014. "Channels of labour supply responses of lone parents to changed work incentives," Oxford Economic Papers, Oxford University Press, vol. 66(4), pages 916-939.
    9. Lundberg, Jacob & Norell, John, 2018. "Taxes, benefits and labour force participation: A survey of the quasi-experimental literature," Ratio Working Papers 313, The Ratio Institute.
    10. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    11. Andrew Leigh & Roger Wilkins, 2009. "Working Credits: A Low-Cost Alternative to Earned Income Tax Credits?," Melbourne Institute Working Paper Series wp2009n07, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    12. V. Joseph Hotz, 2003. "The Earned Income Tax Credit," NBER Chapters, in: Means-Tested Transfer Programs in the United States, pages 141-198, National Bureau of Economic Research, Inc.
    13. Giuseppe De Luca & Claudio Rossetti & Daniela Vuri, 2012. "In-Work Benefits for Married Couples: An Ex-Ante Evaluation of EITC and WTC Policies in Italy," CEIS Research Paper 244, Tor Vergata University, CEIS, revised 23 Jul 2012.
    14. Bettendorf, Leon J.H. & Folmer, Kees & Jongen, Egbert L.W., 2014. "The dog that did not bark: The EITC for single mothers in the Netherlands," Journal of Public Economics, Elsevier, vol. 119(C), pages 49-60.
    15. Marco Francesconi & Helmut Rainer & Wilbert vanderKlaauw, 2009. "The Effects of In-Work Benefit Reform in Britain on Couples: Theory and Evidence," Economic Journal, Royal Economic Society, vol. 119(535), pages 66-100, February.
    16. Volker Meier, 2005. "The impact of family policies on fertility: An international comparison Study commissioned by the Robert Bosch Foundation," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 26.
    17. Ohinata, Asako, 2008. "Fertility Response to Financial Incentives-Evidence from the Working Families Tax Credit in the UK," The Warwick Economics Research Paper Series (TWERPS) 851, University of Warwick, Department of Economics.
    18. Chris Herbst, 2011. "The Impact of the Earned Income Tax Credit on Marriage and Divorce: Evidence from Flow Data," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 30(1), pages 101-128, February.
    19. Paul Gregg & Susan Harkness & Sarah Smith, 2009. "Welfare Reform and Lone Parents in the UK," Economic Journal, Royal Economic Society, vol. 119(535), pages 38-65, February.
    20. Ghazala Azmat, 2018. "Incidence, Salience and Spillovers: The Direct and Indirect Effects of Tax Credits on Wages," SciencePo Working papers hal-03567413, HAL.

    More about this item

    Keywords

    Welfare reform; Fertility; J13; J18; H53;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jopoec:v:25:y:2012:i:1:p:245-266. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.