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Expenditure patterns post-welfare reform in the UK: are low-income families starting to catch up?

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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.

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en

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application/pdf

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http://eprints.lse.ac.uk/6259/1/Expenditure_Patterns_Post-Welfare_Reform_in_the_UK__Are_low-income_families_starting_to_catch_up.pdf

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