Why we won’t turn the tide on child poverty with employment alone

Child poverty in the UK is high and rising, at huge cost both to individual lives and to society. Without action, the number of children living in poverty could rise from 4.5 to 4.7 million by the end of this parliament. Against this context, the UK Government have promised to be ‘laser focused’ on the issue, and are developing a Child Poverty Strategy, due to be published towards the end of this year. Nearly all would agree that we need policy action to drive child poverty rates down, but there are some erroneous assumptions about the steps necessary to get us there. These assumptions could get in the way of delivering a successful child poverty strategy. Specifically, there is a widely-held view that increasing parental employment is the best (perhaps even the only) way to deliver reductions in child poverty. The mantra that ‘work is the best route out of poverty’ resonates with many people, both because it appeals to commonsense ideas, and because it chimes with wider normative viewpoints around individual responsibility, hard work, and individualistic drivers of poverty. But it is a misleading claim, and not only because of the prevalence of in-work poverty. In this briefing, we share new analysis of past policy successes in reducing child poverty, alongside modelling of the future impact of any employment changes on poverty rates. These tell the same consistent story: changes in parental employment, whilst important, will never deliver change to child poverty rates on the scale we need to see. We can only get significant and lasting reductions in child poverty by investing in our social security system. There really is no other way. Why is this the case? First, wages do not adjust for household size. Many working parents will need some financial support to help with extra costs while there are dependent children at home. Social security is an effective mechanism for responding to these increased needs. Cuts to social security support for children over the last decade have contributed to rises in in-work poverty - making it harder for families to escape poverty through work. Second, parental employment has already increased substantially over the last two decades, and this means that room for further growth is quite small. The vast majority of parents who are not working, or who work a small number of hours, face real and substantial employment barriers, including very young or disabled children, health difficulties, distance from job opportunities and the interaction between these factors. While effective tailored employment support can help some parents overcome these barriers, it often comes at high per-person cost, and at best will still only reach a minority. There will always be many parents for whom paid work, or increasing hours, is not a realistic option, at least not right now. The financial situation of those families is a core determinant of the overall child poverty rate. To be clear, there are many excellent reasons government should help parents to balance paid work and care responsibilities. Well-designed support in this area could foster greater gender equality, increase productivity, generate higher tax revenues, and lower social security spending. But this on its own would not amount to an effective child poverty strategy. The centrepiece of an effective child poverty strategy must be adequate investment in financial support for families with children through the social security system.