Tax Credits, Income Support and Partnership Decisions
42 Pages Posted: 3 Dec 2007
Date Written: November 2007
Abstract
This paper considers the potential impact of welfare benefits on the partnership status of women in the UK. Using recent policy reforms to identify the response rate I find that a GBP100/week welfare benefit "partnership penalty" reduces the probability of a woman having a partner by seven percentage points. I also use the model to explore the potential effects of the recent Tax Credit reforms on partnership rates; I find that while the 1999 WFTC reform improved partnership incentives this effect was effectively undone by the 2003 WTC/CTC reform.
Keywords: welfare benefits, tax credits, family structure
JEL Classification: H31, I38, J12
Suggested Citation: Suggested Citation
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