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Does welfare reform affect fertility? Evidence from the UK

Author

Listed:
  • Mike Brewer

    () (Institute for Fiscal Studies and University of Essex)

  • Anita Ratcliffe

    (Institute for Fiscal Studies and CMPO, University of Bristol)

  • Sarah Smith

    () (Institute for Fiscal Studies and University of Bristol)

Abstract

In 1999 the UK government made major reforms to the system of child-contingent benefits, including the introduction of Working Families' Tax Credit and an increase in means-tested Income Support for families with children. Between 1999-2003 government spending per-child on these benefits rose by 50 per cent in real terms, a change that was unprecedented over a thirty year period. This paper examines whether there was a response in childbearing. To identify the effect of the reforms, we exploit the fact that the spending increases were targeted at low-income households and we use the (exogenously determined) education of the woman and her partner to define treatment and control groups. We argue that the reforms are most likely to have a positive fertility effect for women in couples and show that this is the case. We find that there was an increase in births (by around 15 per cent) among the group affected by the reforms.

Suggested Citation

  • Mike Brewer & Anita Ratcliffe & Sarah Smith, 2008. "Does welfare reform affect fertility? Evidence from the UK," IFS Working Papers W08/09, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:08/09
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    References listed on IDEAS

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    More about this item

    Keywords

    Welfare reform; fertility; Working Families Tax Credit;

    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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