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

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  • Richard Dickens
  • David Ellwood

Abstract

We provide a comparison of poverty levels in Britain and the US based on a set of common definitions. We then ask what factors û demographic, economic, or policy û account for the observed changes in poverty in the two nations and what role could policy play in reducing poverty? 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. Government benefits reduced relative and absolute poverty considerably in Britain over this period but had little impact in the US. However, policy changes may have significantly increased work in the US, particularly among single parents, whereas in Britain they may have had the reverse effect. The UK government has committed itself to reducing child poverty by half over the next 10 years and to its abolition within 20 years. 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.

Suggested Citation

  • Richard Dickens & David Ellwood, 2001. "Whither Poverty in Great Britain and the United States? The Determinants of Changing Poverty and Whether Work Will Work," CEP Discussion Papers dp0506, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp0506
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    Cited by:

    1. Nolen, Patrick, 2013. "Unemployment and household values: Distribution sensitive measures of unemployment," Labour Economics, Elsevier, vol. 24(C), pages 354-362.
    2. Arnstein Aassve & Simon Burgess & Matt Dickson & Carol Propper, 2005. "Modelling Poverty by not Modelling Poverty: An Application of a Simultaneous Hazards Approach to the UK," The Centre for Market and Public Organisation 05/134, The Centre for Market and Public Organisation, University of Bristol, UK.
    3. Alison L. Booth & Jan C. Van Ours, 2009. "Hours of Work and Gender Identity: Does Part‐time Work Make the Family Happier?," Economica, London School of Economics and Political Science, vol. 76(301), pages 176-196, February.
    4. Gregg, Paul & Wadsworth, Jonathan, 2004. "Two sides to every story: measuring the polarisation of work," LSE Research Online Documents on Economics 19959, London School of Economics and Political Science, LSE Library.
    5. Kuan Xu & Ian Irvine, 2002. "Crime, Punishment and the Measurement of Poverty in the United States, 1979-1997," LIS Working papers 333, LIS Cross-National Data Center in Luxembourg.
    6. Richard Blundell & Andrew Shephard, 2012. "Employment, Hours of Work and the Optimal Taxation of Low-Income Families," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 481-510.
    7. Osberg, Lars, 2002. "Trends in poverty: the UK in international perspective: how rates mislead and intensity matters," ISER Working Paper Series 2002-10, Institute for Social and Economic Research.
    8. Mike Brewer & Paul Gregg, 2001. "Eradicating child poverty in Britain: welfare reform and children since 1997," IFS Working Papers W01/08, Institute for Fiscal Studies.
    9. Elena Giarda & Gloria Moroni, 2018. "The Degree of Poverty Persistence and the Role of Regional Disparities in Italy in Comparison with France, Spain and the UK," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 136(1), pages 163-202, February.
    10. Nicolas Hérault & Guyonne Kalb & Rezida Zakirova, 2011. "Dynamics of Household Joblessness: Evidence from Australian Micro-Data 2001–2007," Melbourne Institute Working Paper Series wp2011n10, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    11. Ramón Spaaij & Jonathan Magee & Ruth Jeanes, 2013. "Urban Youth, Worklessness and Sport: A Comparison of Sports-based Employability Programmes in Rotterdam and Stoke-on-Trent," Urban Studies, Urban Studies Journal Limited, vol. 50(8), pages 1608-1624, June.
    12. Paul Gregg & Susan Harkness & Sarah Smith, 2009. "Welfare Reform and Lone Parents in the UK," Economic Journal, Royal Economic Society, vol. 119(535), pages 38-65, February.
    13. Weiss, Matthias, 2008. "Skill-biased technological change: Is there hope for the unskilled?," Economics Letters, Elsevier, vol. 100(3), pages 439-441, September.
    14. Mary C. Daly & Robert G. Valletta, 2000. "Inequality and poverty in the United States: the effects of changing family behavior and rising wage dispersion," Working Paper Series 2000-06, Federal Reserve Bank of San Francisco.
    15. Stephen Nickell, 2004. "Poverty And Worklessness In Britain," Economic Journal, Royal Economic Society, vol. 114(494), pages 1-25, March.
    16. Richard Blundell & Hilary W. Hoynes, 2004. "Has 'In-Work' Benefit Reform Helped the Labor Market?," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980–2000, pages 411-460, National Bureau of Economic Research, Inc.
    17. Heckman, James J. & Masterov, Dimitriy V., 2004. "Skill Policies for Scotland," IZA Discussion Papers 1444, Institute of Labor Economics (IZA).
    18. Miguel Sanchez-Martinez & Philip Davis, 2014. "A review of the economic theories of poverty," National Institute of Economic and Social Research (NIESR) Discussion Papers 435, National Institute of Economic and Social Research.
    19. James J. Heckman & Dimitriy V. Masterov, 2005. "Allander Series: Skill Policies for Scotland," NBER Working Papers 11032, National Bureau of Economic Research, Inc.
    20. Nolen, Patrick, 2006. "Unemployment and Family-Values: A Household Distribution Sensitive Measure of Unemployment and Some Applications," Working Papers 05-03rr, Cornell University, Center for Analytic Economics.

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    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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