Poverty, benefit policy, and child outcomes

Child poverty is never far from the top of the policy agenda, and the new government has established a taskforce to develop a strategy to reduce the child poverty rate, which stands at 30%. The issue receives so much attention in part because childhood circumstances are strongly associated with outcomes in adulthood. The benefit system is key to addressing this issue. As a source of income, benefits affect children’s opportunities, home environment, and nutrition - while income difficulties can cause stress, with implications for family dynamics. Moreover, changes to parental employment resulting from benefits policy affect the amount, or quality, of time with the children. These factors could have implications for children’s education, behaviour, and health, and hence have significant lifetime impacts, including on social mobility. But little is known about how benefits affect children, especially in the UK. Nor is there much evidence on how such benefits interact with services such as early years provision - and therefore how to design the right policy mix. UK researchers have been hampered by a lack of large-scale, high-quality data linking child outcomes to information about parental benefit eligibility. This project will fill that gap. We will use newly available anonymised administrative data linking almost all children’s school and hospital records. These data contain information enabling us to study some of the key tools policymakers have at their disposal: changing the generosity of regular, recurring cash payments - including the controversial ‘two-child limit’; providing one-off ‘baby bonuses’ at childbirth; requiring out-of-work benefit recipients to search for jobs to keep getting the payment. These could have quite different impacts: for example, recurring payments provide some income stability; baby bonuses direct resources to families at a particularly vulnerable point; and job-search requirements could increase income but reduce parents’ available time. All of these have been reformed in ways that enables robust comparisons between those affected with a very similar unaffected group. We will study how these reforms affect children’s test scores, school absences, exclusions, and healthcare utilisation - and how these factors interact. We will explore how effects vary by parental and child characteristics, including child age and local service provision. We will also use various datasets to examine how these reforms impacted parental employment, family material deprivation, parental mental health, parent-child relationships, and household spending - shedding light on the mechanisms at play. This project will make a substantial contribution to our relatively limited knowledge about the impact of benefit reforms on children. By studying a range of benefit policy tools and using high-quality data on a suite of important outcomes, this project will make a huge amount of progress on an existing evidence base which is almost entirely outside the UK and largely in the US. We expect at least four academic papers from this project. These findings will provide key evidence for policymakers making decisions on these kinds of contentious reforms, and for designing a combination of interventions - including in-kind services - to improve child outcomes. Our dissemination strategy will deliver maximum impact: senior civil servants and representatives from third-sector organisations have agreed to be on our advisory panel, and we will use non-technical reports, press releases, and policymaker and public seminars to reach as wide an audience as possible, drawing on the experienced IFS communications team.