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Eradicating Child Poverty in Britain: Welfare Reform and Children Since 1997

  • Mike Brewer
  • Paul Gregg


In 1997 the new Labour government in the UK inherited a situation where nearly one in 5 children lived in a household where no adult worked and around one in 3 lived in relative poverty. Children had replaced pensioners as the poorest group in society. The incoming government set about an ambitious set of reforms designed to reduce poverty and worklessness amongst families with children. This policy reform agenda contained some features akin to the welfare reform process being undertaken in the US since 1996. But with one fundamental difference, that welfare payments to jobless families rose rapidly and there is no time restriction in access to these payments. This paper describes the key features of the welfare reform process and documents the reforms to welfare payments and in particular contrasts them with the US system. The results show that the reformed UK welfare support system, taxes and benefits, for children is more generous to low-income families with children but less for better off families. So the UK system is more progressive among families with children. The paper goes on to look at the emerging evidence of the impact of the UK policy reform process on poverty and welfare dependence.

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Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 02/052.

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Length: 41 pages
Date of creation: Oct 2002
Date of revision:
Handle: RePEc:bri:cmpowp:02/052
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  1. Mike Brewer, 2000. "Comparing in-work benefits and financial work incentives for low-income families in the US and the UK," IFS Working Papers W00/16, Institute for Fiscal Studies.
  2. 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.
  3. Stephen Nickell & Tracy Jones & Glenda Quintini, 2000. "A picture of job insecurity facing British men," LSE Research Online Documents on Economics 20141, London School of Economics and Political Science, LSE Library.
  4. A Gosling & Stephen Machin, 1995. "The Changing Distribution of Male Wages in the UK," CEP Discussion Papers dp0271, Centre for Economic Performance, LSE.
  5. N. Eissa & H. W. Hoynes, . "The Earned Income Tax Credit and the Labor Supply of Married Couples," Institute for Research on Poverty Discussion Papers 1194-99, University of Wisconsin Institute for Research on Poverty.
  6. David G. Blanchflower & Richard B. Freeman, 2000. "Youth Employment and Joblessness in Advanced Countries," NBER Books, National Bureau of Economic Research, Inc, number blan00-1, December.
  7. David Piachaud & Holly Sutherland, 2000. "How Effective is the British Governments Attempt to Reduce Child Poverty?," CASE Papers case38, Centre for Analysis of Social Exclusion, LSE.
  8. Markus Jantti & Bruce Bradbury, 1999. "Child Poverty across Industrialized Nations," Papers iopeps99/70, Innocenti Occasional Papers, Economic Policy Series.
  9. Hilary Hoynes & Richard Blundell, 2001. "Has "In-Work" Benefit Reform Helped the Labour Market?," NBER Working Papers 8546, National Bureau of Economic Research, Inc.
  10. William Gale, 1997. "What can America learn from the British tax system?," Fiscal Studies, Institute for Fiscal Studies, vol. 18(4), pages 341-369, November.
  11. Currie, Janet & Thomas, Duncan, 1995. "Does Head Start Make a Difference?," American Economic Review, American Economic Association, vol. 85(3), pages 341-64, June.
  12. 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.
  13. Richard Layard & Steven McIntosh & Anna Vignoles, 2002. "Britains Record on Skills," CEE Discussion Papers 0023, Centre for the Economics of Education, LSE.
  14. Stephen P. Jenkins & Christian Schluter & Gert G. Wagner, 2001. "The Dynamics of Child Poverty: Britain and Germany Compared," Discussion Papers of DIW Berlin 233, DIW Berlin, German Institute for Economic Research.
  15. Dickens & David T. Ellwood, 2004. "Whither Poverty in Great Britain and the United States? The Determinants of Changing Poverty and Whether Work Will Work," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 313-370 National Bureau of Economic Research, Inc.
  16. David T. Ellwood & Jeffrey B. Liebman, 2001. "The Middle-Class Parent Penalty: Child Benefits in the U.S. Tax Code," NBER Chapters, in: Tax Policy and the Economy, Volume 15, pages 1-40 National Bureau of Economic Research, Inc.
  17. Gregg, Paul & Wadsworth, Jonathan, 2000. "Mind the Gap, Please: The Changing Nature of Entry Jobs in Britain," Economica, London School of Economics and Political Science, vol. 67(268), pages 499-524, November.
  18. Nolan, Brian & Whelan, Christopher T., 1996. "Resources, Deprivation, and Poverty," OUP Catalogue, Oxford University Press, number 9780198287858, July.
  19. Johnson, Paul & Webb, Steven, 1993. "Explaining the Growth in UK Income Inequality: 1979-1988," Economic Journal, Royal Economic Society, vol. 103(417), pages 429-35, March.
  20. Gregg, Paul, 2001. "The Impact of Youth Unemployment on Adult Unemployment in the NCDS," Economic Journal, Royal Economic Society, vol. 111(475), pages F626-53, November.
  21. Proceedings from a workshop organised by HM Treasury and CASE, 1999. "Persistent Poverty and Lifetime Inequality: The evidence," CASE Reports casereport05, Centre for Analysis of Social Exclusion, LSE.
  22. Blundell, Richard, 2000. "Work Incentives and 'In-Work' Benefit Reforms: A Review," Oxford Review of Economic Policy, Oxford University Press, vol. 16(1), pages 27-44, Spring.
  23. repec:nsr:niesrd:72 is not listed on IDEAS
  24. Nada Eissa & Jeffrey B. Liebman, 1995. "Labor Supply Response to the Earned Income Tax Credit," NBER Working Papers 5158, National Bureau of Economic Research, Inc.
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