Families, Welfare and Children

Stream Director: Paul Gregg


Current Research

  1. Child Development and Intergenerational Mobility

  2. Child Poverty and Material Deprivation

  3. Parental Employment and Home Production


Family/Children

Child Development and Intergenerational Mobility


Aspirations and attitudes to education - On-going

Funder:Joseph Rowntree Foundations
Staff: Paul Gregg, Liz Washbrook and Lindsey Macmillan

This project involves a collaboration with the IFS and looks at how childs attitudes to school and aspirations influence their attainment and explores how these attitudes are formed with a specific emphasis on parants attitudes and expectations and peer influences. The CMPO element will use the ALSPAC database whilst the IFS will be exploring other databases.


Understanding Socio-ecomimic gradients in child development- On-going

Funder:ESRC
Staff: Simon Burgess, Carol Propper, Frank Windmeijer, Paul Gregg, Liz Washbrook and Lindsey Macmillan

This project involves collaboration across a number on departments in Bristol to explore the evolution of social gradients in child outcomes. The project consists of a number of strands focus on behaviour, education, health, neighbourhoods and friendships and methodology advances, especially the development of estimating causal relationships in this area.


Intergenerational income mobility - On-going

Part Funded by: Sutton Trust, Department for Education and Skills (via CEE)
Staff: Jo Blanden, Alissa Goodman, Paul Gregg, Stephen Machin, Lindsey Macmillan and Jane Waldfogel

This research builds on previous research last year (2003/4) which compared estimates of the extent of intergenerational income mobility over time in Britain. Estimates based on two British birth cohorts show that mobility appears to have fallen in a cross-cohort comparison of people who grew up in the 1960s and 1970s (the 1958 birth cohort) as compared with a cohort who grew up in the 1970s and 1980s (the 1970 birth cohort). The sensitivity of labour market earnings to parental income rises, thereby showing less intergenerational mobility for the more recent cohort. The new research has investigated the key role of education in this process. It shows how access to higher education has become increasingly related to family income across three cohorts entering HE in the late 1970s, late 1980s and mid-late 1990s. The decision to stay on in school at age 16 became more strongly related to family income between the first two cohorts and then fell back in the third. This research suggests that access to HE has become a key driver in the lack of social mobility in the UK.


Intergenerational transmission of poor health - Complete

Funder: CASE
Staff: Simon Burgess, Carol Propper, John Rigg

We are undertaking research into the intergenerational tranmission of poor health, using the ALSPAC cohort. Research includes examination of the impact of family income on child health and an examination of the quality of GP care that children have access to.


Religion and Childhood Death in India

Funder: ESRC

Staff: Sonia Bhalotra and Christine Valente

Muslim children in India face lower mortality risks than Hindu children. This is surprising because Muslims have, on average, lower socio-economic status, higher fertility, shorter birth-spacing, lower autonomy amongst women, and are a minority group in India that, in principle, might live in areas that have poorer public provision. This project is motivated by this puzzle.

Its aims are as follows. First, it will establish the stylised facts relating to the size and persistence of the religion-differential, and its variation with age, gender, caste and birth-order. Second, it will estimate a structural model of the relationships between reproductive behaviour and child mortality by religion that isolates causal effects from unobserved heterogeneity. The observed mortality differential will be decomposed into a part that can be explained by differences in characteristics, and a residual that may be described as a "pure religion effect". Third, it will investigate whether there is evidence of social networks organised at the religion level, which may constrain the sharing of beliefs or information within groups. Fourth, it will analyse the allocation of public goods across religious groups, seeking to identify the effects of social cohesion and political representation in this process.

See ESRC website


Child outcomes in India - On-going

Staff: Sonia Bhalotra

Sonia Bhalotra has undertaken three related pieces of work looking at child outcomes in India. The first investigated the impact of economic growth on childhood mortality in India, exploiting variation across states and over time, using a panel data model. It finds that, overall, economic growth does significantly reduce mortality incidence, but the size of this effect is remarkably different across the Indian states. Sonia also considered whether India can achieve the Millenium Development Goal (MDG) of reducing its under-5 mortality rate by two-thirds relative to its level in 1990. It concludes that the rate of growth would have to be of the order of 14% p.a. if it were to reduce mortality to the target level with no other specific interventions at play. Recent growth in India has been only about 5% p.a. In a third piece of work, Sonia, with Bernarda Zamora (Castellon, Spain), is using two large repeated cross-sections of data, one for the early 1990s, and one for the late 1990s, to analyse the question of whether India will be able to achieve the Millenium Development Goal of realising universal primary education by the year 2015.

In joint work with Wiji Arulampalam (Warwick), Sonia has a series of papers on family-level persistence in childhood mortality. Their idea is to investigate whether there are causal state-dependence type effects such that the death of a child results in higher mortality risk for the next sibling in the same family. They find that there are large state-dependence effects, even after controlling for all inter-family differences. They estimate their model on data for 15 Indian states and find large effects in 13, the two regions with the weak effects being the richest and the socially most advanced respectively.

Sonia, again with Arthur van Soest, estimated a dynamic panel data model of neonatal mortality and birth spacing using microdata on 29000 children and 6700 mothers in India, with a view to accounting for causal effects of birth spacing on subsequent mortality and of mortality on the length of the next birth interval, while controlling for unobserved heterogeneity in mortality (frailty) and birth spacing (fecundity). Information on sterilization is used to identify an equation for completion of family formation that is needed to account for right-censoring in the data. They find clear evidence of frailty, fecundity, and causal effects of birth spacing on mortality and vice versa, but find that birth interval effects can explain only a limited share of the correlation between neonatal mortality of successive children in a family.


The effect of public policy on fertility - On-going

Funder: ESRC
Staff: Mike Brewer (IFS), Anita Ratcliffe and Sarah Smith

In the light of falling birth rates, this project asks whether government policy can have an influence on fertility decisions. It will do so by looking at the effect of recent government reforms (the introduction of working families tax credit and the child tax credit) that increased financial support for children. While the stated objective of these reforms was to reduce child poverty, they also changed financial incentives to have children - and did so differentially across different households. To set recent changes in context, the project will first use a time-series of cross-section data from the Family Expenditure Survey (1968-2002) to document key trends in fertility over time. In particular, it will look at cohort patterns in fertility by mother's education. Secondly, the research will use data from the Labour Force Survey and the British Household Panel Survey to examine the effect of recent reforms, comparing changes in fertility before and after the reforms across the differentially-affected groups in the population.


Child Poverty and Material Deprivation


Material well-being of children - On-going

Funder: CASE
Staff: Paul Gregg, Elizabeth Washbrook

Paul Gregg and Elizabeth Washbrook have undertaken research to see whether 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. The results suggest 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.


Lone parent employment - Complete

Staff: Susan Harkness, Paul Gregg and Sarah Smith

Lone parents are one of the key groups of workless, and often poor households, in many countries. 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 research evaluates how this package of policy reform impacted on lone parents employment.

Susan Harkness has examined the employment dynamics of lone parents using panel datasets from the Longitudinal Household Labour Force Survey (HLFS) and the Family and Children Survey (FACS). Since New Labour came to government in 1997 a stream of policy initiatives have been targeted at getting lone parents into work. This work suggests that these policies have been relatively effective and that that lone parents are now as successful at finding jobs as single women with otherwise similar characteristics. However the rate at which lone parents exit work remains substantially higher than for non-lone parents. The exit rate is particularly large for new job entrants, with around one quarter of lone parents who find a job in any given year being out of work one year later.


Poverty dynamics in Britain - Complete

Funder: ESRC
Staff: Simon Burgess, Matt Dickson, Karen Gardiner, Stephen P Jenkins, Carol Propper, Hedley Rees and Arran Shearer

This project aims to establish a structural model of poverty and household income dynamics. The project will address the underlying reasons for the rise in poverty in recent years. Movements in and out of poverty over time as a result of the changes in individual's labour market status and earnings, and their household composition will be modelled. This model will be estimated using recent econometric techniques which allow for the fact that different individuals have different chances of these events happening using data from the British Household Panel Survey. Once the model is estimated, it will be used to examine the dynamics of poverty (the probability of being poor, the length of time until individuals escape, the probability of returning). The impact of characteristics of individuals, such as education, and changes in circumstances, such as becoming unemployed will be examined. All the analyses will be done at individual level so the results can be aggregated to examine the effect on particular groups, such as women of child-rearing age, or young men, or those who are poor at a specific date. The model will be used to examine the short and long term impact of policies, and the dramatic changes in poverty in Britain over the last twenty years.


Parental Employment and Home Production


Patterns of paid and unpaid work - Complete

Staff: Susan Harkness and Liz Washbrook

This research area looks at how family patterns of paid and unpaid work have changed. This work showed that in spite of the dramatic rise in employment for women, with three quarters of couple households now having dual incomes, women still take responsibility for most of the housework. As improved wage opportunities for women have emerged in recent decades, more and more married women have taken up paid employment. In 2002, 70% of working age women who were in employment, a rise of 10% since 1979 and, over the same period, employment rates for mothers with pre-school children almost doubled. Working mothers with children put twice as many hours into housework as their partners. Housework is more evenly split in dual income households, especially when women earn as much or more than their partners and have no children.


Female earning and employment - Complete

Staff: Susan Harkness

Other work by Susan has focused on female earnings and employment, highlighting how the pay gap varies both across the wage distribution and across different groups of workers. Findings suggest that in the early-1990s the pay gap was smallest for better educated workers, the young, those without children and those who worked full-time. Since the early-1990s the largest gains in relative earnings have however been seen among low-paid and less-well-educated, women in their 30s and early 40s, and mothers who work full-time. Those who have seen the smallest gains are those working part-time, older women, women at the top of the pay distribution who have hit the "glass ceiling", and mothers who have more than one child.


Lone parent employment - Complete

Funder: Part DWP
Staff: Susan Harkness, Paul Gregg and Sarah Smith

Lone parents are one of the key groups of workless, and often poor households, in many countries. 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 research evaluates how this package of policy reform impacted on lone parents employment.

Susan Harkness has examined the employment dynamics of lone parents using panel datasets from the Longitudinal Household Labour Force Survey (HLFS) and the Family and Children Survey (FACS). Since New Labour came to government in 1997 a stream of policy initiatives have been targeted at getting lone parents into work. This work suggests that these policies have been relatively effective and that that lone parents are now as successful at finding jobs as single women with otherwise similar characteristics. However the rate at which lone parents exit work remains substantially higher than for non-lone parents. The exit rate is particularly large for new job entrants, with around one quarter of lone parents who find a job in any given year being out of work one year later.


Maternal employment and childcare - Complete

Funder: Part funded by DfES
Staff: Simon Burgess, Paul Gregg, Carol Propper and Elizabeth Washbrook

This project is utilising the ALSPAC database to inform policy development and implementation around key issues of how maternal employment and family income influence child development. This work mirrors an integral part of the Government's plans to tackle child poverty, and we hope will provide information about readiness to learn on entry to school. The ALSPAC data offers a unique opportunity to understand these issues.


Employment/Unemployment


The dynamics of unemployment - Complete

Funder: EU
Staff: Simon Burgess and Helene Turon

This project aims to improve our understanding of unemployment and policies that would act to reduce it. We will study the main factors influencing unemployment at both an aggregate level and at an individual level. We will produce answers to a variety of key research questions surrounding the issue of unemployment in Europe, including the nature of aggregate unemployment dynamics and individual unemployment transitions, the role of labour market institutions, and the lessons from international comparisons. We will focus on the roles of 'flexible' employment forms, labour market frictions, labour market regulation, welfare provision, taxation, active labour market policies, macroeconomic policy, and innovation and the role of new technologies. A Dynamic Approach to Europe's Unemployment Problem (DAEUP) has been funded by the European Union. The project involves a collaboration across the EU working with partners in the Tinbergen Institute, CEPR, Humboldt University, Fondazione Rodolfo Debenedetti, GRESCTA (Groupe de Rechercheen Economie et Statistique) - CNRS, Universidad Carlos III de Madrid, IDEI (Université des Sciences Sociales, Toulouse).


Unemployment scarring - Complete

Researchers: Paul Gregg and Emma Tominey

The best predictor of whether a person will be unemployed today is whether they were unemployed yesterday. Even over long periods of time the same people tend to be unemployed, such that bulk of days spent in unemployment are experienced by a relatively small number of individuals with others never being unemployed. Such concentration of unemployment may be due to unemployment damaging peoples chances of finding work (often called scarring) or because they have characteristics, such as low educational attainment, that make them vulnerable to unemployment.


Inactivity and workless households - Complete

Funder: Jobless Households in Australia has been funded by the Australian Family and Community Services Department (FACS).
Staff: Paul Gregg and Susan Harkness

Worklessness is a key reason for welfare dependence and is often associated with poverty. In this section we explore the changing relationship between individual and household measures of worklessness. The rise of the workless household for given levels of employment in the economy is one of the main reasons for increasing welfare dependence over the last twenty years or so. This research addresses the issue of generating measures that allow the changing relationship between individual and household measures of worklessness to be decomposed to facilitate understanding of the forces at work. Then international comparisons are explored to understand why what explains the wide variation in countries performance The rise of the workless household for given levels of employment in many economies is one of the main reasons for increasing welfare dependence over the last twenty years or so. This research is being undertaken in conjunction with the Centre for Economic Performance at the LSE and with the Melbourne Institute of Applied Economic and Social Research. A draft paper is available.

Lone parents are one of the key groups of workless, and often poor households, in many countries. 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 research evaluates how this package of policy reform impacted on lone parents employment.

Susan Harkness has examined the employment dynamics of lone parents using panel datasets from the Longitudinal Household Labour Force Survey (HLFS) and the Family and Children Survey (FACS). Since New Labour came to government in 1997 a stream of policy initiatives have been targeted at getting lone parents into work. This work suggests that these policies have been relatively effective and that that lone parents are now as successful at finding jobs as single women with otherwise similar characteristics. However the rate at which lone parents exit work remains substantially higher than for non-lone parents. The exit rate is particularly large for new job entrants, with around one quarter of lone parents who find a job in any given year being out of work one year later.


Pensions and Retirement


Individual pension provision

Individual contributions to personal pensions - Complete

Staff: Sarah Smith

The shift from employer-provided DB pensions to individual DC pensions, combined with the decline in the value of the state pension relative to private pensions, means that retirement income security increasingly depends on individuals' willingness and ability to save. Previous studies have looked at take-up of, and contributions to, individual DC pensions. This research looks at evidence on the persistency of contributions to individual personal pensions over time, including an analysis of micro-data from the British Household Panel Survey. There is significant variation in persistency rates by gender, earnings and household income. Changes in income and consumption needs (for example, becoming unemployed or the arrival of a new baby) increase the probability of lapse, but household income also matters, suggesting that pensions may be less affordable for those on low incomes, even in the absence of shocks. The introduction in 2001 of stakeholder pensions, with a charge cap of 1% of fund value, transfers the financial penalty associated with lapsing from consumers to providers. Arguably this will make it less likely that pensions are sold to those for whom they are less suitable. The only risk is if providers walk away from low income groups altogether.


What do defined contributions pensions mean for retirement? - On-going

Staff: Sarah Smith, Gemma Tetlow (IFS)

Description: In the UK, as in the US, individual defined contribution pension accounts are playing an increasing role in financing retirement, particularly for workers in the private sector. Given the importance of pension incentives for retirement, this shift is likely to affect when people retire. The first stage of this research examines what the effects on retirement are likely to be by simulating representative individuals in typical DB and DC schemes and predicting retirement probabilities at different ages. The analysis shows that DC pensions imply a smoother profile of retirement ages, but do not necessarily mean that people will retire later, on average. Shifting to safer assets nearing retirement and compulsory annuitization both reduce the incentive to delay retirement. The second stage of the research will use data from the English Longitudinal Survey of Ageing (ELSA) to carry out an empirical analysis of the effect of (correctly modelled) pension incentives on retirement between the two waves. It will focus on any differences between workers with defined benefit and defined contribution pension schemes and the effect of pension incentives in the two types of scheme.


Older workers and retirement

Retirement in the UK - Complete

Staff: James Banks (UCL, IFS) and Sarah Smith

Like other OECD countries, the UK experienced more than two decades of declining labour market activity among older men in the 1970s, 1980s and early 1990s. A number of measures to reverse this trend that are currently under discussion, or have already been introduced, include, an increase in the state pension age, abolition of mandatory early retirement ages, tighter eligibility for disability benefits, and in-work benefits and training incentives for those aged 50+. This research considers the nature and timing of retirement in the UK today and makes an assessment of the likely effect of these measures and likely future trends in retirement. The analysis shows that there are two distinct groups with very different retirement experiences. At the top of the wealth distribution individuals retire early, typically drawing an income from an occupational pension before age 65; at the bottom of the wealth distribution individuals are even more likely to be not working in their 50s, yet typically do not define themselves as retired and are supported by income support, or more usually, disability benefits. Policy-makers keen to raise effective retirement ages will need to keep in mind the very different circumstances and needs of these groups.


What happens to the wages of older workers - and why? - On-going

Staff: Richard Blundell (UCL, IFS) and Sarah Smith

With an ageing population - and ageing workforce - it is increasingly important to understand what happens to productivity/ wages as individuals get older. Most studies that estimate wage profiles by age conclude that wages fall with age. One possibility is that this decline is real and indicates a genuine decline in productivity. But, there are a number of other possible explanations - that it is a spurious result arising from the common practice of estimating wages as a quadratic function of age; that it reflects partial retirement among older workers or that it reflects a changing pattern of selection of workers into retirement at older workers caused by early retirement among those with occupational pensions. This research will investigate each of these hypotheses using panel data from the British Household Panel Survey. Estimating fixed effects models controls for selection on fixed unobservable characteristics. We will also control for selection on random unobservables by identifying factors that are related to early retirement, but not the individual's own wage (including changes in the benefit system, spouses' health).


Involuntary retirement and the retirement-consumption puzzle - Complete

Staff: Sarah Smith

This research uses data from the British Household Panel Survey (BHPS) to shed further light on the fall in consumption at retirement (the "retirement-consumption puzzle"). It defines a group of men who retire involuntarily early - through ill health or redundancy - and a group for whom retirement is voluntary. Comparing food spending for these two groups, it finds a significant fall in spending only for those who retire involuntarily. This is consistent with the observed fall in spending being linked to a