Journal Article

British tax credit simplification, the intra-household distribution of income and family consumption

Paul Fisher

in Oxford Economic Papers

Volume 68, issue 2, pages 444-464
Published in print April 2016 | ISSN: 0030-7653
Published online December 2015 | e-ISSN: 1464-3812 | DOI: https://dx.doi.org/10.1093/oep/gpv068

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  • Fiscal Policies and Behaviour of Economic Agents
  • Welfare and Poverty
  • Demographic Economics

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This paper asks whether targeting welfare benefits to women can be effective at changing household spending. We provide empirical evidence on this question by using a reform to the UK tax-credit system in 2003 as a quasi-experiment. We find that the reform caused low-income households to reallocate spending towards children’s goods. The results further demonstrate that the effects of directing welfare benefits to women can extend beyond child expenditures to goods that are collectively consumed by all household members. Our findings are in contrast to those from earlier studies that took place in the economic setting of 1970s UK.

Keywords: H31; I38; J16

Journal Article.  9394 words.  Illustrated.

Subjects: Fiscal Policies and Behaviour of Economic Agents ; Welfare and Poverty ; Demographic Economics

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