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Abstract for:

Expenditure Patterns Post-Welfare Reform in the UK: Are low-income families starting to catch up?

Paul Gregg,  Jane Waldfogel,  Elizabeth Washbrook,  May 2005
Paper No' CASE 099: Full paper (pdf)

Summary:
This paper finds post 1998 UK welfare reforms children in low-income families were catching up in terms of their families’ spending in the overall areas of housing and utilities, food, clothing, leisure goods and services, and motoring and travel. The evidence also suggests reduced spending on alcohol and tobacco.


Tags: tax, benefits and pensions; welfare benefits and policy; children, families and education; children and child poverty; poverty, exclusion and equalities; poverty and social exclusion; child poverty; family expenditures; welfare reform; difference-in-difference

Abstract:

In this paper we provide evidence on how the UK government’s welfare reforms since 1998 have affected the material well-being of children in low-income families. We examine changes in expenditure patterns and ownership of durable goods for low- and higher-income families between the pre-reform period (1995-1998) and the post-reform period (2000-2003), using data from the Family Expenditure Survey. The methodological approach is a difference-in-difference-in-difference analysis that exploits the fact that age variation in the reforms favoured low-income families over higher-income ones and families with children age under 11 over those with older children. We find that low-income families with children are catching up to more affluent families, in their expenditures and their possession of durable goods. Moreover, expenditures on child-related items are increasing faster than expenditures on other items.

This paper has been published as:
Family Expenditures Post-Welfare Reform in the UK: Are Low-Income Families with Children Starting to Catch Up?, Labour Economics, 13(6): 721-746, 2006