02 April 2009 – Publication of DWP research report 569: the impact of financial incentives in welfare systems on family structure

New research published today by the DWP presents the findings of a literature review which explored the impact of financial incentives in welfare systems on family structure. The aim of the review was to examine both national and international evidence on the influence of financial incentives in the welfare system on union formation, union dissolution and childbearing. The review was designed to inform policy makers about the international evidence and follows reports in the UK media about the possible adverse consequences of the tax and benefit system for family life.

Main Findings

• The reviewed literature shows that at an overarching level there is no consistent and robust evidence to support claims that changes in welfare systems have had a significant impact upon family structure
• Whilst there are some studies showing a welfare effect of reforms on marriage/cohabitation typically for sub-groups, there is, overall, no consistent evidence for a large and significant impact on union formation
• The review identified only a small number of studies on union dissolution, and found no overwhelming evidence that welfare system reforms have had a major impact on union dissolution
• The evidence indicates that, overall, there is no consistent and robust evidence that changing financial incentives have affected childbearing and lone parenthood decisions.

Methodology

The review was desk based and involved synthesising evidence from a wide range of published sources. The search focused on studies published since 1997 in English-speaking countries.

The review looked at the effect of past reforms to the welfare system, but did not consider at what levels incentives would begin to have an effect on family structure, nor the cost effectiveness of any such measures.

Notes to Editors

• The DWP Research Report ‘ The impact of financial incentives in welfare systems on family structure’ is published in April 2009.
• The University of Nottingham was commissioned by DWP to undertake this literature review. The research was undertaken by Professor Bruce Stafford and Dr Simon Roberts.

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Website: http://research.dwp.gov.uk/asd/asd5/rports2009-2010/rrep569.pdf