Majority of families still reliant on male-earner
A report by the Institute for Fiscal Studies (IFS) which looked at living standards and poverty rates of working families with children, found that 85% of one-earner couples with kids are reliant on male earnings.
However, median weekly earnings among men with dependent children have risen by only 0.3% per year since 1994, compared with 2.2% for working mothers.
In 2015–16, 86% of children lived with at least one working parent and almost 50% of children lived in a family in which two parents were working.
But the IFS claimed that the risk of poverty is similar for both children being raised in working and non-working families as relative poverty rates for children living in working families has risen over the last 20 years.
It suggested the reason behind this is that worklessness in families with children has fallen significantly over the past two decades.
It said that earnings are still “well below” their levels seen prior to the 2008 recession, increasing the risk that simply having one parent in work is not enough to take families out of poverty.
The report said: “The main reason why the earnings of one-earner couples with children have performed so badly is that these families are typically reliant on male earnings, and male earnings growth has been extremely weak over the last 20 years. A secondary factor is that working fathers in these families have seen even weaker earnings growth than other working fathers since the early 2000s, alongside a relative deterioration in their occupational class.
“Big increases in the proportion of working fathers in one-earner couples who were born abroad, who tend to earn less than similarly qualified workers born in the UK, have reinforced these patterns a little, but the basic stories apply even if looking purely at those born in the UK. Despite family earnings from employment being lower, average net incomes for one-earner couples with children are 24% higher than they were 20 years ago. The primary reason for this is large increases in the amounts of benefits and tax credits paid to low-income working families since the mid-1990s.”
The investigation also found the following:
- A third of children living in poverty in 2015 were the children of one-earner couples. 43% of children of one-earner couples lived in relative poverty in 2015. This compares with 24% among all children in working families, 33% for children of working lone parents and 11% for children of two-earner couples.
- Median family earnings (before tax) in one-earner couples with children are 11% lower in real terms than 20 years ago.It is only due to increases in benefits and tax credits that the incomes of these families are any higher than 20 years ago; and since 2002–03 their incomes have not grown at all.
- Raising living standards and reducing poverty rates among one-earner couples with children could prove challenging.The majority of working parents in these families already work full-time. Turning to non-working partners, only 12% are actively seeking work, and a third have been out of paid work for at least five years. The IFS said increasing the generosity of benefits targeted at one-earner couples would be likely to weaken the financial incentives for the second adult to find paid work.