How Effective is the British Government’s Attempt toReduce Child Poverty?

The new Labour Government in Britain has made the reduction of childpoverty one of its central objectives. This paper describes the specificinitiatives involved in Labour’s approach and weighs them up in termsof their potential impact. After setting out the extent of the problem ofchild poverty, the causes are discussed and Britain's problem is set ininternational perspective. The impact on child poverty of policiesdesigned to raise incomes directly is analysed using micro-simulationmodelling. A major emphasis of current policy is on the promotion ofpaid work, and we explore the potential for poverty reduction ofincreasing the employment of parents. We find that at its maximum,increasing paid work could roughly double the reduction in childpoverty achieved by tax and benefit policies alone - a combined decreaseof 1.85 million children in poverty. However, a more realistic forecast ofincreases in parental employment suggests that the number of childrenin poverty may be reduced by 1 million by 2002. The policies thataddress long-term disadvantage are also discussed and finally the wholeprogramme is assessed and future strategy is considered.[...]