Welfare Reform and Lone Parents in the UK

The last thirty years saw dramatic increases in the proportion of children living in lone parent households. In 1997 the incoming Labour government initiated a series of policy reforms aimed at reducing this high level of child poverty. A key element of their strategy was a move towards increasing employment rates among families with children by a combination of increased in-work support through the Working Families Tax Credit and active case management of the population on welfare through the New Deal for Lone Parents. The assessment of this policy reform agenda has focused to date mainly on lone mothers’ employment and poverty. In this paper we extend this to include at the impact on the numbers of lone parent families and a range of outcomes for mothers and children. We cover mothers’ mental well-being and health, child outcomes and relationship patterns. As well as representing the basic facts about employment incomes and hours of work. Our results show there was no significant impact of these policy reforms on family structure. Mothers malaise scores are, unsurprisingly, very high on family break up but they tend to recover after around 2 years. WFTC is found to reduce the spike of high malaise co-incident with the transition into lone parenthood but to have no longer term effects. This decline in malaise is strongly associated with improved financial indicators. Adolescent children in lone parents families report lower self-esteem, more unhappiness, lower quality relationships with the mother and a number of worse or risky behaviours. Difference-in-difference techniques suggest a marked narrowing if these gaps since WFTC. The magnitude of these changes are quite large, half of the gap in self-esteem and unhappiness scores and in truanting, smoking and planning to leave school at age 16 are eliminated after the policy reforms. This strongly suggests that the increases in incomes and employment associated with the reforms have profoundly changed the quality of life children in lone parent families.