Recent Changes in the Distribution of the Social Wage

This paper examines the distribution of the “social wage” benefits inkind from welfare services, including the National Health Service, stateeducation, social housing, and personal social services. The currentGovernment has put a strong emphasis on improving public servicesand has begun to translate this into higher spending. Although mostmeasures of poverty ignore the social wage, its inclusion is potentiallyvery significant in monitoring the impact of government policies on thepoorest households. The paper produces estimates of the value of thesocial wage for 1996/7 and 2000/01, using data from several large-scalehousehold surveys, and makes comparisons with estimates fromprevious work going back to 1979. The results show that people inpoorer households receive a greater share of benefits in kind fromwelfare services than those in richer households and that this ‘pro-poor’bias has been rising gradually over the long-term. Since 1996/7,spending on welfare services has grown faster than in the past and therehas been a further incremental shift in favour of lower income groupsacross all the major services. These changes have reinforced the redistributionaleffects of tax and benefit policies over the same period,though they have not prevented inequality from rising.[...]