Whither Poverty in Great Britain and the United States? The Determinants of Changing Poverty and Whether Work Will Work

Richard Dickens () and David T. Ellwood

No 8253, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Scholars emphasize that poverty in Britain has risen sharply since the late 1970s. Meanwhile in the United States, both official figures and traditional poverty scholars report sharp declines in poverty. We seek to provide a comparison of poverty levels in Britain and the US based on a set of common definitions. We then proceed to ask what factors-demographic, economic, or policy-account for the observed changes in poverty in the two nations and what role could policy play in reducing poverty? We develop a procedure that allows one to trace out the relative impacts of altered demographics, rising wage inequality, work changes, and policy innovations in explaining changing poverty patterns. We find that the forces influencing poverty differ between nations and across absolute and relative poverty measures. Demographic and wage change is a dominant force in both nations. Britain has experienced a dramatic rise in workless households while the US has simultaneously had a sharp fall. These differences had a sizable impact on absolute poverty in both nations and a significant impact on relative poverty in Britain. Government benefits directly reduced relative and absolute poverty considerably in Britain over this period but had little impact in the US. However, changing patterns of benefits and work suggest that policy changes have significantly increased work in the US, particularly among single parents. In Britain, policy changes may have had the reverse effect, reducing work among many groups. The UK government has committed itself to reducing child poverty by half over the next 10 years and to its abolition within 20 years, largely through policy changes designed to make work pay. We conclude that any purely work-based strategy, which doesn't tackle demographics and wage dispersion, may not have a dramatic effect on relative poverty.

JEL-codes: I3 (search for similar items in EconPapers)
Date: 2001-04
Note: LS PE
View list of references View citations in EconPapers

Downloads: (external link)
http://www.nber.org/papers/w8253.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:nbr:nberwo:8253

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w8253
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc
Address: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Contact information at EDIRC.
Series data maintained by ().