Starting School and Leaving Welfare: The Impact of Public Education on Lone Parents' Welfare Receipt. CEE DP 121
Author: Brewer, Mike
Date: 2010-10-00
Type: Numerical/Quantitative Data
Subjects: Public Education,Eligibility,Young Children,Welfare Services,One Parent Family,Employment,Employed Parents,Mothers,Preschool Education,Elementary Education,Child Care,Regression (Statistics),Foreign Countries

The report makes use of rich administrative data (the Work and Pensions Longitudinal Study) which records children's exact date of birth and home postcode (used to identify the admissions policy in each lone parent's local authority). It improves on previous studies by estimating the precise timing (relative to the date on which part-time nursery or full-time primary education begins) of any impact on labour supply, allowing an assessment of whether there are anticipation or experience effects. Moreover, it focuses on a group which previous studies have suggested are particularly responsive to this type of incentive. Findings reveal that having a youngest child who is entitled to full-time primary education (rather than part-time nursery education) increases the proportion of lone parents on Income Support who leave welfare by a small, but significant, margin of around 2 percentage points, or 10 per cent. The impact on those who move into work is very similar. These effects do not start to emerge until some four to six months after entitlement to school begins, which suggests that lone parents may not start looking for work until this point. The impact peaks around eight to nine months after the child becomes eligible for school. There is weaker evidence of an even smaller effect of eligibility for part-time nursery education on lone parents' labour supply. These effects are small in comparison to the proportion of lone parents with children around school-entry age who are leaving welfare and entering employment over time anyway, a finding which is pertinent to the new government's plan to remove entitlement to Income Support for lone parents whose youngest child is aged five or over. The results suggest that eligibility for full-time primary education (corresponding to a relatively large childcare subsidy) does not precipitate a large increase in labour market activity around age five. Moreover, they suggest that the expansion of public education programmes to younger disadvantaged children--such as the recently announced policy of extending free nursery education to disadvantaged two year olds--may not by itself encourage many low income lone parents into work (although, of course, this is not its primary aim). It is interesting to compare the findings of this report to those of other programmes affecting lone parents, such as In Work Credit, New Deal for Lone Parents and Work Focused Interviews. Brewer et al (2009) report that, after 12 months of being potentially eligible for In Work Credit, an extra 1.6 percentage points of potentially eligible lone parents had left benefit. Cebulla et al (2008) calculated the impact of the New Deal for Lone Parents on all lone parents on benefit to be 1.7 percentage points after nine months. They also reported that, after 12 months, the impact of Work Focused Interviews (WFIs) was 2.0 per cent for lone parents with youngest children aged 9-12. Eligibility for full-time primary education seems, therefore, to have an impact &quot;on lone parents' labour supply&quot; broadly comparable to these three welfare-to-work programmes, but at vastly greater cost. Appended are: (1) Relationship Between Youngest Child's Date Of Birth And Other Characteristics Amongst Main Sample Of Lone Parents; (2) Effect Of Eligibility For Part-Time Nursery Education; (3) Subgroup Analysis; (4) Specification Tests; and (5) Placebo Tests. (Contains 17 figures, 24 tables and 50 footnotes.)