Expenditure Patterns Post-Welfare Reform in the UK:Are low-income families starting to catch up?

In this paper we provide evidence on how the UK government’s welfarereforms since 1998 have affected the material well-being of children in lowincomefamilies. We examine changes in expenditure patterns and ownership ofdurable goods for low- and higher-income families between the pre-reformperiod (1995-1998) and the post-reform period (2000-2003), using data fromthe Family Expenditure Survey. The methodological approach is a differencein-difference-in-difference analysis that exploits the fact that age variation in thereforms favoured low-income families over higher-income ones and familieswith children age under 11 over those with older children. We find that lowincomefamilies with children are catching up to more affluent families, in theirexpenditures and their possession of durable goods. Moreover, expenditures onchild-related items are increasing faster than expenditures on other items.[...]