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Investing in Our Children: The U.S. Can Learn From the U.K.

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The former and newly installed British prime ministers, Tony Blair and Gordon Brown, are longstanding Labour Party rivals, yet they were able to unite in what history may one day view as their most important domestic achievement—a commitment to end child poverty in the United Kingdom.

Two years into his first term, in March 1999, Blair stunned observers by committing his government to an initiative to end child poverty in the next generation, which Brown—then the Chancellor of the Exchequer—eagerly carried forward. Together, the two leaders dramatically increased investments in children and families.

By 2004, they had boosted the share of the United Kingdom’s gross domestic product being spent on public support for children by close to one percentage point, the equivalent of over $20 billion per year extra today. If Washington budgeted an additional 1 percent of our GDP to eliminate child poverty, we would have about $130 billion to work with.

Blair and Brown used these resources strategically, making a host of investments designed to improve educational, social, and economic outcomes for all children and to narrow the gaps between rich and poor children. Seen from an American vantage point, the scope and depth of the investments are truly staggering

In drawing up its program of investments in children, however, the United Kingdom often drew on U.S. research and borrowed several elements from U.S. programs. As in the United States, programs to encourage parents to work were emphasized, but unlike in the U.S. such programs were offered to single mothers on a voluntary basis. Also as in the United States, measures to make work pay have been implemented—in particular, a Working Families Tax Credit, which closely resembles our Earned Income Tax Credit, as well as a national minimum wage.

But the United Kingdom went well beyond the U.S. welfare reforms by making a series of investments in children, from birth onwards. The rationale for doing so is compelling. For families with infants, acting on solid evidence about the health and developmental benefits of parental leave, the British government extended paid maternity leave to nine months with a commitment to extend it to 12 months before the next election. Paid paternity leave is to be extended too.

Although it is too soon to know the long-term effects of these changes, prior research documents that when mothers have longer periods of paid leave, infant mortality rates are lower. Research also shows that children benefit when mothers are home longer on leave. The children are more likely to be breast-fed, taken to the doctor, and immunized. Research also shows that fathers who are home longer on leave are more involved with their children afterward.

For parents of older preschoolers, the United Kingdom has rolled out free and universal part-time nursery school places for three- and four-year-olds. As a result, in just a few years, the United Kingdom has moved from having one of the lowest preschool enrollment rates among industrialized countries to now being part of the club of nations that offers free, publicly-funded preschool to all children in the year or two prior to school entry. This helps to ensure that children start school on a more even footing and more ready to learn.

Subsidies for other forms of child care have also been greatly expanded, providing more support for low-income families who need more hours of care if parents are to work. And the United Kingdom has made a commitment to make all schools extended schools so that all children have a safe and productive place to go before and after school as well as during school holidays. Again, the children benefit from having safe, productive supervision when parents just can’t be at home.

In addition, working parents with a child under the age of six benefit from a law enacted in 2003 that gives them the right to request part-time or flexible hours. Parents cite increased control over work hours as one of their highest priorities, and indeed in the first year of the policy one million parents made such requests—the vast majority of which employers granted with little or no disruption in operations at their workplaces. Although it is too soon to tell what the benefits have been for the kids, prior research suggests the benefits for the employees and their families are likely to be manifold.

The United Kingdom has also taken a hard look at its system of financial assistance for families with children. One finding was that its universal child benefit program did not provide enough financial support for families with young children. Accordingly, benefit rates were raised quite substantially for families with a child under the age of six. A similar problem existed in the means-tested welfare system. There, too, benefits were raised the most for families with the youngest children, with particularly large increases for families with infants.

As a result of the increased incentives to work alongside the tax and benefit changes, the lowest-income families—in particular those with young children—have seen the largest percentage increases in income. How are they using the money? Research shows that low-income families are spending the additional money on items for their children such as shoes, clothing, books, and toys, as well as on purchasing cars and telephones. At the same time, they are spending less money on alcohol and tobacco.

Is the U.K. program complete? Hardly. Its 10-year Child Care Strategy places the burden on each local community to provide adequate support to children in order to help all children achieve their potential and help close gaps between disadvantaged children and their more advantaged peers. This is an ambitious agenda and much work remains to be done, particularly with regard to raising program quality both in preschool care and after-school care.

Meeting the ambitious poverty reduction targets is also proving challenging. In 1999, the government pledged to reduce child poverty by 50 percent by 2010 and to eliminate child poverty altogether by 2020. In determining whether these goals are met, most attention is focused on the reduction of relative poverty—the share of children with family incomes less than 60 percent of median income. Using this relative measure makes accomplishing these goals even more difficult, since it means that just increasing income among the poor is not enough as the incomes of low-income families must grow relative to the median.

In 1999, 3.4 million children were in poverty in Britain. By 2006, seven years into the anti-poverty initiative, the government had managed to reduce poverty substantially—moving some 600,000 children out of poverty defined in relative terms before housing costs. But the United Kingdom will probably still fall short of its 10-year target of moving 1.7 million children out of poverty.

Although most of the focus in the United Kingdom is on relative poverty, the government also tracks its progress using an absolute poverty line, similar to the one the United States uses. On this measure, the United Kingdom has reduced poverty by a stunning 50 percent since the start of its anti-poverty campaign—reducing the numbers of children in absolute poverty before housing costs from 3.4 million in 1999 to 1.6 million in 2006. From a U.S. vantage point, this is a remarkable achievement.

But Britain’s anti-poverty campaign is not just about reducing poverty for this generation. It is also about improving the life chances of the next generation. And this requires not just reducing poverty today, but also making investments in children that will lessen the likelihood that they and their children will be poor in the future. That’s the rationale for the U.K. strategy of investments in children, and it’s one the United States would be wise to emulate.

Jane Waldfogel is Professor of Social Work and Public Affairs at Columbia University and Research Associate at the Centre for Analysis of Social Exclusion at the London School of Economics. She is the author of What Children Need (Harvard University Press, 2006).

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