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Abstract:

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CASE Paper
How Effective is the British Government's Attempt to Reduce Child Poverty?
David Piachaud and Holly Sutherland
March 2000
Paper No' CASE 038:
Full Paper (pdf)

Tags: child poverty; tax and benefit policy; welfare-to-work

The new Labour Government in Britain has made the reduction of child poverty one of its central objectives. This paper describes the specific initiatives involved in Labour's approach and weighs them up in terms of their potential impact. After setting out the extent of the problem of child poverty, the causes are discussed and Britain's problem is set in international perspective. The impact on child poverty of policies designed to raise incomes directly is analysed using micro-simulation modelling. A major emphasis of current policy is on the promotion of paid work, and we explore the potential for poverty reduction of increasing the employment of parents. We find that at its maximum, increasing paid work could roughly double the reduction in child poverty achieved by tax and benefit policies alone - a combined decrease of 1.85 million children in poverty. However, a more realistic forecast of increases in parental employment suggests that the number of children in poverty may be reduced by 1 million by 2002. The policies that address long-term disadvantage are also discussed and finally the whole programme is assessed and future strategy is considered.

This paper has been published as Innocenti Working Paper No.77
This paper has been published as:
Reducing child poverty in Britain: An assessment of government policy 1997-2001’, Economic Journal, 111(469), 2001
This paper has been published as:
‘Child poverty in Britain and the New Labour Government’, Journal of Social Policy, 30(1), 2001