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Does Welfare Reform Affect Fertility? Evidence from the UK

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  • Mike Brewer
  • Anita Ratcliffe
  • Sarah Smith

Abstract

This paper presents evidence on the fertility effect of welfare from a set of reforms that took place in the UK in 1999 and that substantially increased support for poorer families with children. The reforms, including the introduction of the Working Families Tax Credit and an increase in means-tested income support, raised benefits by up to 10 per cent of household income. We exploit the fact that the reforms were targeted on low-income households and use a differences-in-differences approach to evaluate their impact on fertility. A priori, the fertility effect of the reforms is ambiguous because WFTC has pro-employment effects. In practice, these are more important for lone mothers and we therefore focus on women in couples where we expect the reforms to have a positive effect on births. We find that the reforms raised the probability of birth among women in couples by around 10 per cent (implying an elasticity of 0.22). In line with previous work, the effect is greatest for first births.

Suggested Citation

  • Mike Brewer & Anita Ratcliffe & Sarah Smith, 2007. "Does Welfare Reform Affect Fertility? Evidence from the UK," The Centre for Market and Public Organisation 07/177, The Centre for Market and Public Organisation, University of Bristol, UK.
  • Handle: RePEc:bri:cmpowp:07/177
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    More about this item

    Keywords

    Welfare reform; Fertility; Working Families Tax Credit;
    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

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