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Eradicating child poverty in Britain: welfare reform and children since 1997

  • Mike Brewer

    ()

    (Institute for Fiscal Studies and ISER, Essex University)

  • Paul Gregg

Over the past 20 years the incidence of relative poverty among Britain's children has tripled. These changes are related to increased earnings inequality, growth in the number of single (lone) parent households, and an increased share of households with children with no working adult. The Labour Government has responded by adopting as a policy objective ending child poverty by 2020. Initial steps toward this end include increasing direct financial support to families with children, creating financial incentives for work for parents, adopting more intensive case management for the welfare caseload, and ameliorating the long-term consequences of the deprivation poverty brings. The Working Families' Tax Credit (WFTC) is the centerpiece of the financial support innovations but there is a broader swathe of welfare reforms which has received less attention. Overall, the U.K. system provides more generous support to the lowest-income families than is available in the U.S., and recent reforms have directly reduced child poverty. For most households, the reforms have reduced marginal benefit deduction rates and increased incentives to work. Preliminary evidence suggests the changes have had greatest effect on single parents. Continued progress requires the adoption of a more specific procedure for defining and measuring child poverty.

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Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W01/08.

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Length: 48 pp
Date of creation: Apr 2001
Date of revision:
Handle: RePEc:ifs:ifsewp:01/08
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  1. Nolan, Brian & Whelan, Christopher T., 1996. "Resources, Deprivation, and Poverty," OUP Catalogue, Oxford University Press, number 9780198287858.
  2. Janet Currie & Duncan Thomas, 1993. "Does Head Start Make a Difference?," NBER Working Papers 4406, National Bureau of Economic Research, Inc.
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  4. 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.
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  6. 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.
  7. 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.
  8. 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.
  9. Richard Blundell & Hilary W. Hoynes, 2004. "Has 'In-Work' Benefit Reform Helped the Labor Market?," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 411-460 National Bureau of Economic Research, Inc.
  10. 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.
  11. 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.
  12. 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.
  13. 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.
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  16. Nada Eissa & Hilary Williamson Hoynes, 1998. "The Earned Income Tax Credit and the Labor Supply of Married Couples," NBER Working Papers 6856, National Bureau of Economic Research, Inc.
  17. Bruce Bradbury & Markus Jantti, 1999. "Child Poverty across Industrialized Nations," Innocenti Occasional Papers, Economic Policy Series iopeps99/70, UNICEF Innocenti Research Centre.
  18. 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.
  19. Dickens, Richard & Ellwood, David T., 2001. "Whither Poverty in Great Britain and the United States? The Determinants of Changing Poverty and Whether Work Will Work," Working Paper Series rwp01-010, Harvard University, John F. Kennedy School of Government.
  20. 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.
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  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. 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.
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