Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/95667
Authors: 
Fisher, Paul
Year of Publication: 
2014
Series/Report no.: 
ISER Working Paper Series 2014-13
Abstract: 
The UK Government enacted simplification of its tax credit system in 2003. An inter- esting consequence of the reform is that tax credit payments were split between partners in couples, causing a rare wallet to purse transfer. This paper presents evidence on the effects of the reform on family spending, using quasi-likelihood techniques, for a sample of low income couples with children. In areas of child goods, evidence of important spending increases are found, whereas spending decreases are observed amongst goods that disproportionately ben- efit parents. A further key finding is an apparent trade-off between spending on public goods that are not exclusively consumed by children, but may nonetheless have a child development dimension. Results are contrasted to earlier findings from UK 1970s child benefit reforms. The effects are consistent with a non-cooperative bargaining framework, in which partners differ in their relative preference for different household public goods.
Subjects: 
family expenditure
child well-being
welfare reform
JEL: 
C21
D12
H31
I38
J08
J16
Document Type: 
Working Paper

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