UK Welfare Reform 1996 to 2008 and beyond: A personalised and responsive welfare system?

The UK welfare system has undergone three very profound periods of reform of the post-war model laid down by Beveridge. The first was a move in the direction of (but never fully converged with) the Bismarkian model of a contributory social insurance model with time limited earnings related benefits with a low value means tested social assistance safety net. This occurred slowly through the 1960s and up to the mid-1970s. The second phase started in 1979 and involved a dramatic move to curtail the social insurance entitlements and end all earnings related benefits. The result was a residualist low value means tested social assistance model, which ended both the Beveridge model and completely reversed the drift toward a European Bismarkian approach. Finally from 1996 a new model has emerged based on an activational welfare model with greater emphasis on incentives, support services and conditionality. As a direction of travel from the previous regime(s) this represents an increase in the engagement and support functions, increases in the (disciplinary) required activity functions combined with increased financial support for children and pensioners and personalised support services. The emerging model is far from completion and the final make up of the system remains uncertain. However, it bears strong similarities with developments in New Zealand and to a degree Australia and Canada. Within Europe the model most closely resembles a less generous version of the welfare systems in Denmark or Holland, which are sometimes referred to as embodying Flex-security. This evolutionary process of reform had some antecedents prior to 1996 but has really come to the fore since that date. This paper discusses reform in depth from 1996 and looks at its current direction of evolutionary change.welfare reform, tax credits, lone parents, disabled adults

Family income and Education in the Next Generation: Exploring income gradients in education for current cohorts of youth

The relationship between the incomes of the family a child is growing up in and the education level the child obtains, has been of great interest to researchers for a number of reasons. Firstly, this gives us a measure of educational inequality in its own right, and secondly, because the relationship between family income and education is also one of the key drivers of intergenerational income mobility across time in the UK, and gradients in life chances across a range of other domains. This paper explores the evolution of the relationship between family income and education, for a group of cohorts from those born in 1958 to those born in 1991/92. The range of educational relationships we can measure depends on the age of the child. For older cohorts, whom we assume have completed their education, we can measure the full range of educational outcomes up to degree level, and their relationship with family income. For younger cohorts who are in earlier stages of education, we can measure test scores and GCSE results but not later educational outcomes

Why we should (also) Measure Worklessness at the Household Level. Theory and Evidence from Britain, Spain, Germany and the United States.

Individual and household based aggregate measures of joblessness can, and do, offer conflicting signals about labour market performance. This paper uses a simple set of indices to measure joblessness at the household level in 4 OECD countries with very different labour markets and welfare systems and tries to identify the likely source of any disparity in the signals stemming from individual and household-based measures of worklessness. We focus on one measure of the polarisation of work across households which is built around a comparison of the actual household jobless rate with that which would occur if work were randomly distributed over the working age household members. We show that in all the countries we examine, there has been a growing disparity between the individual and household based jobless measures. Though the incidence and magnitude of these changes varies widely, the majority of the change is from increases in this polarisation measure rather than from changing household composition or employment levels and in all the countries we study can be explained by within rather than between household group factors. This suggests, to us, that inter-relationships between each country's labour market performance and their welfare systems underlie these developmentsworkless households, distribution of work, polarisation, joblessness

Eradicating child poverty in Britain: welfare reform and children since 1997

Over the past 20 years the incidence of relative poverty among Britain's children has tripled. These changes are related to increased earnings inequality, growth in the number of single (lone) parent households, and an increased share of households with children with no working adult. The Labour Government has responded by adopting as a policy objective ending child poverty by 2020. Initial steps toward this end include increasing direct financial support to families with children, creating financial incentives for work for parents, adopting more intensive case management for the welfare caseload, and ameliorating the long-term consequences of the deprivation poverty brings. The Working Families' Tax Credit (WFTC) is the centerpiece of the financial support innovations but there is a broader swathe of welfare reforms which has received less attention. Overall, the U.K. system provides more generous support to the lowest-income families than is available in the U.S., and recent reforms have directly reduced child poverty. For most households, the reforms have reduced marginal benefit deduction rates and increased incentives to work. Preliminary evidence suggests the changes have had greatest effect on single parents. Continued progress requires the adoption of a more specific procedure for defining and measuring child poverty.Welfare, inequality, in-work benefits, child poverty

Welfare Reform and Lone Parents Employment in the UK

The last thirty years saw dramatic increases in the employment rates of married/co-habiting mothers in the UK. Yet the employment rates of lone mothers were lower in the early 1990s than in the late 1970s, at just under 40 percent; and 25 percentage points lower than those of married mothers. In 1997 the incoming Labour government initiated a series of policy reforms aimed at reducing child poverty. A key element of their strategy was a move towards increasing employment rates among families with children. This paper evaluates how this package of policy reform impacted on lone parents employment. We use propensity score matching to construct a benchmark sample and then apply difference-in-difference estimation techniques to assess what would have happened to lone parents employment in the absence of policy reform. Our results show that, of the 11-percentage point rise in the rate of employment of lone parents between 1992 and 2002, 5-percentage points can be attribute to policy reform. This increase in employment occurred in-spite of significant rises in the level of support for non-working lone parents claiming Income Support. This is in sharp contrast to the experience of the USA, where welfare generosity did not increase and time limits and mandatory job search were employed alongside tax credits to get lone parents back to work. In the UK, further substantive policy changes are currently being phased in and so it is probable that there will be further employment gains for lone parents over the next few years. Even so, the pace of response to these reforms does not yet look sufficient to meet the Government's target of getting 70 percent of lone parents into work by 2010.welfare reform, lone parents, employment

Two Sides to Every Story: Measuring the Polarisation of Work

Individual and household based aggregate measures of joblessness can, and do, offer conflicting signals about labour market performance if work is unequally distributed. Thispaper introduces a simple set of indices that can be used to measure the extent of divergencebetween individual and household-based jobless measures. The indices, built around acomparison of the actual household jobless rate with that which would occur if work wererandomly distributed over the working age population, conform to basic consistency axiomsand can be decomposed to try to identify the likely source of any disparity betweennonemployment rates calculated at the 2 levels of aggregation. Applying these measures todata for Britain, we show that there has been a growing disparity ¿ polarisation - between theindividual and household based jobless measures that are largely unrelated to changes inhousehold structure or the principal characteristics associated with individual joblessness.Workless households, Distribution of work, Polarisation, Joblessness

The Effects of Early Maternal Employment on Child Development in the UK

This paper uses data from the ALSPAC cohort of 12000 births to explore the effects of early maternal employment on child cognitive and behavioural outcomes. The results indicate that full time maternal employment begun in the 18 months after childbirth has small negative effects on later child outcomes. Part-time work and work begun later than 18 months, however, do not seem to have any adverse consequences. We explore the issue of whether our results are biased by unobserved heterogeneity but find no evidence that our results are sensitive to the inclusion of controls for a wide range of background factors. We conduct sub-group analyses to investigate whether certain groups may be more vulnerable to the effects of early full time maternal employment than others. This paper also explores the mechanisms linking maternal employment to children's development. The mechanisms examined relate to the parenting behaviours of the mother and father, breastfeeding behaviour, maternal tiredness and stress, household income and the use of non-maternal childcare. We find that a number of factors work to minimise the effect of mothers' labour market participation on their children. Fathers are significantly more involved in child rearing in households where mothers return to work early and this more equal division of parenting has strongly beneficial effects on later child outcomes. Negative employment effects are concentrated in those families where mothers work full time and also rely on unpaid care by a friend or relative. The use of paid childcare protects children from these negative effects and attendance at a centre-based provider may actually lead to better cognitive outcomes than if the child were at home with a non-working mother.maternal employment, child development

Family Income and Educational Attainment: A Review of Approaches and Evidence for Britain

It is widely recognised that, on average, children from poorer backgrounds have worse educational outcomes than their better off peers. There is less evidence on how this relationship has changed over time and, indeed, what exactly leads to these inequalities. In this paper we demonstrate that the correlation between family background (as measured by family income) and educational attainment has been rising between children born in the late 1950s and those born two decades later. The remainder of the paper is spent considering the extent to which these associations are due to the causal effects of income rather than the result of other dimensions of family background. We review the approaches taken to answering this question, drawing mainly in the US literature, and then present our own evidence from the UK, discussing the plausible range for the true impact of income on education. Our results indicate that income has a causal relationship with educational attainment.Education, Inequality

Jobs in the recession

The recession of 2008-09 inflicted a larger cumulative loss of UK output than any of the previous post-war recessions, yet there has been a relatively low loss of employment, at least so far. Paul Gregg and Jonathan Wadsworth look for an explanation.labour market, recession, unemployment, wages