Paying for children: the state's changing role and income adequacy

In a number of countries, the state has become more closely involved in helping lowincome families with children to make ends meet – including those with low earnings as well as out-of-work families. The adequacy of such support can be assessed against benchmarks measuring the additional cost of a child in households that maintain spending at a level sufficient to participate adequately in society. A socially-defined minimum income standard provides an empirically-based benchmark, which allows more meaningful measurement of adequacy than measures based on relative income or actual spending patterns. Using evidence from the Minimum Income Standard for the United Kingdom, this paper considers the extent to which the UK state covers the additional cost of having children, for non-working and low-earning families respectively. It finds that the present system has come close to covering this cost for some low-income families, but has started to withdraw from this position. The paper concludes by considering advantages and pitfalls for countries of adopting targeted forms of support for children focused on income adequacy. Such support can help working as well as non-working families escape poverty, but also makes them heavily dependent on state transfers to make ends meet.