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

In: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000

  • Dickens
  • David T. Ellwood

We provide a comparison of poverty levels in Britain and the US based on a set of common definitions. We then ask what factors û demographic, economic, or policy û account for the observed changes in poverty in the two nations and what role could policy play in reducing poverty? 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. Government benefits reduced relative and absolute poverty considerably in Britain over this period but had little impact in the US. However, policy changes may have significantly increased work in the US, particularly among single parents, whereas in Britain they may have had the reverse effect. The UK government has committed itself to reducing child poverty by half over the next 10 years and to its abolition within 20 years. 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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This chapter was published in:
  • David Card & Richard Blundell & Richard B. Freeman, 2004. "Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000," NBER Books, National Bureau of Economic Research, Inc, number card04-1, September.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 6751.
    Handle: RePEc:nbr:nberch:6751
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