The National Minimum Wage and In-work Poverty

The analysis presented in this paper considers the impact on poverty rates of the Labour government�s tax and benefit policy changes in combination with the introduction of the National Minimum Wage (NMW). It examines the contribution of the NMW to direct poverty reduction and to �making work pay�. It concludes that the main contribution made by the NMW to poverty reduction at the household level is probably through its role in underpinning the operation of in-work top-up benefits

Women, men and the redistribution of Income.

This paper explores the implications of examining the effect of policy changes on individual incomes rather than household incomes. Conceptual problems arise from the treatment of collective resources and responsibilities, particularly children. These are dealt with in a manner that is transparent with the aim of establishing a practical method of analysing policy at the individual (and gender-specific) level. Two policy-related issues are examined in this framework: the impact of a minimum wage and the effect of introducing a minimum pension guarantee. In each case, the implications of choosing the ndividual as the income unit are examined and an analysis of the issue by gender is presented.

How Effective is the British Governments Attempt to Reduce Child Poverty?

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.Child poverty, tax and benefit policy, welfare-to-work

Changing Poverty Post-1997

The paper analyses changes in poverty in Britain since 1997. A poverty level of 60 percent of median equivalised income is used. The first part examines the changes that occurred between 1996/7 and 2000/1 as shown by the Family Resources Survey, on which government estimates of Households Below Average Income are based. There was a small reduction in poverty overall and a larger proportionate fall in child poverty. This fall was attributable in part to increased employment and in part to changes in benefits and tax credits which increased for some, particularly for families on low earnings with children, but fell relative to median incomes for many of those without children and not in employment. The second part assesses policy changes implemented or announced for the period 2000/1 to 2003/4 by means of a micro-simulation model, POLIMOD, using a sample from the Family Resources Survey. The impact of policy changes is to reduce poverty compared to its prospects under previous policies. But, relative to a poverty level that rises in real terms in step with median incomes, future reductions in poverty are likely to be small. In order to keep on track towards the goal of halving child poverty by 2010, further policy measures will be required.poverty, welfare policy

Homelessness and Vulnerable Young People: A social audit of KeyChange Charitys supported accommodation

Homelessness is still an ever-present problem in many towns and cities in the UK today. This paper is part of a more in-depth study of homelessness and social exclusion. It presents the results of a small-scale study, which illustrates the range of problems experienced by homeless young women and those running hostels for them. The study was carried out for KeyChange at their two hostels in Reigate and Exeter. It evaluates the quality of their women's hostel provision, the types of women they help, and the ways in which these women are helped by their time with KeyChange. It identifies a number of factors contributing to the quality of KeyChange's provision and points to areas for consideration where improvements could be made.Homelessness, young women, social exclusion

Combining Household Income and Expenditure Data in Policy Simulations

Analysis of the distributional impact of fiscal policy proposals often requires information on household expenditures and incomes. It is unusual to have one data source with high quality information on both, and this problem is generally overcome with statistical matching of independent data sources. In this paper Grade Correspondence Analysis (GCA) is investigated as a tool to improve the matching process. An evaluation of alternative methods is conducted using datasets from the UK Family Expenditure Survey (FES), which is unusual in containing both income and expenditure at a detailed level of disaggregation. Imputed expenditures are compared with actual expenditures through the use of indirect tax simulations using the UK microsimulation model, POLIMOD. The most successful methods are then employed to enhance income data from the Family Resources Survey (FRS) and the synthetic dataset is used as a microsimulation model dataset

Alternative Tax-Benefit Strategies to Support Children in the European Union. Recent Reforms in Austria, Spain and the UK

We compare three EU countries that have recently experienced substantial but very different reforms of their family support systems: Austria, Spain and the UK. The structure of these systems is different: Austria emphases universal benefits, Spain tax concessions and the UK means-tested benefits. First the paper compares the distributional implications of these three approaches. The recent reforms have reinforced existing structures while increasing the amount of spending for children. The second step is to ask: What would have happened if these countries had transformed the architecture of their systems in either of the other two directions? We use EUROMOD, the European tax-benefit microsimulation model that is designed for making cross-country comparisons and answering “what if” questions such as these. We find that the three factors that can be distinguished – the level of spending, its structure, and the way it impacts in a national context – are all important to varying degrees.Children, European Union, Policy Reform, Microsimulation

GINI DP 2: Are European Social Safety Nets Tight Enough? Coverage and adequacy of minimum income schemes in 14 EU countries

This paper explores and compares the effectiveness of Minimum Income (MI) schemes in protecting persons of working age from poverty in the European Union. Using the European microsimulation model EUROMOD we estimate indicators of coverage and adequacy of MI schemes in 14 EU countries. In terms of coverage, we find that in several countries a significant number of individuals are ineligible for MI even when they fall below a poverty line set at 40 per cent of median income. With respect to adequacy, we show that in certain countries a large fraction of those entitled to MI remain at very low levels of income even when MI benefit is added. Overall, our findings suggest that the clustering of MI schemes in Europe may be more complex than previous literature has hitherto allowed for.

The Distributional Impact of In Kind Public Benefits in European Countries

International comparisons of inequality based on measures of disposable income may not be valid if the size and incidence of publicly-provided in kind benefits differ across the countries considered. The benefits that are financed by taxation in one country may need to be purchased out of disposable income in another. We estimate the size and incidence of in kind or "non cash" benefits from public housing subsidies, education and health care for five European countries using comparable methods and data. Inequality in the augmented income measure is dramatically lower than in disposable income, with the effects of the three components varying in importance across countries. Adapting equivalence scales to take proper account of differences in needs for health care and education across population members reduces the scale of the effect, but does not eliminate it.inequality, in kind transfers, cross-national comparisons