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Family expenditures post-welfare reform in the UK: Are low-income families starting to catch up?

Research output: Contribution to journalArticle

Original languageEnglish
Pages (from-to)721 - 746
Number of pages26
JournalLabour Economics
Volume13 (6)
DOIs
DatePublished - Dec 2006

Abstract

In this paper, we provide evidence on the question of 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.

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Publisher: Elsevier

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