Mike Brewer

Mike Brewer
University of Essex · Institute for Social and Economic Research

MSc Economics and Econometrics

About

118
Publications
15,093
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1,886
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Introduction
I am Professor of Economics at ISER at the University of Essex. My work flits between applied labour and applied public economics. My overall research interest is in how welfare benefits, labour market programmes, childcare provision and the tax system affects decisions made by households. I am also interested in poverty and inequality, and ways of measuring living standards.
Additional affiliations
April 2000 - present
The Institute for Fiscal Studies
Position
  • Research Associate

Publications

Publications (118)
Article
Many governments are considering expanding childcare subsidies to increase the labour force participation of parents (especially mothers) with young children. In this paper, we study the potential impact of such a policy by comparing the effects of offering free part-time childcare and of expanding this offer to the whole school day in the context...
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This paper provides new evidence on the incidence of rent subsidies. We use administrative panel data on subsidy recipients in the UK and exploit a natural experiment in which entitlements were cut for about a million households. In the short-run, about 90% of the incidence of the cuts is found to be on tenants. We also uncover an important dimensi...
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Increasing the labour market participation of single parents, whether to boost incomes or reduce welfare spending, is a major policy objective in a number of countries. This paper presents causal evidence on the impact of work search requirements on single parents’ transitions into work and onto other benefits. We use rich administrative data on al...
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Personal taxes and benefits affect the incentive to work over the lifecycle by altering income-age profiles, insuring against adverse shocks, and changing the returns to human capital. In this paper, show how a lifecycle perspective alters our impression of how the UK tax and benefit system affects women's work incentives. Given that actual longitu...
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A growing literature on inference in difference-in-differences (DiD) designs has been pessimistic about obtaining hypothesis tests of the correct size, particularly with few groups. We provide Monte Carlo evidence for four points: (i) it is possible to obtain tests of the correct size even with few groups, and in many settings very straightforward...
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We analyse income inequality in the UK from 1978 to 2009 in order to understand why income inequality rose very rapidly from 1978 to 1991 but then remained broadly unchanged. We find that inequality in earnings among employees has risen fairly steadily since 1978, but other factors that caused income inequality to rise before 1991 have since gone i...
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We estimate the impact of free, universal preschool education for three year olds on maternal labour supply in England, exploiting both discontinuities arising from date of birth eligibility cutoffs and geographical variation in the speed at which free places were available to all children. The impacts using geographical variation in the roll-out o...
Technical Report
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Living standards for Britain’s low and middle income households will be lower in 2020 than they were a decade earlier even if growth returns. Households in this group are set for income falls of between 3 and 15 percent from 2008 to 2020. Who Gains from Growth? examines the changing structure of the UK jobs market in tandem with the effects of the...
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We study the short- and medium-term impacts of the recent recession on the distribution of net household income in the UK. We document trends in the distribution of income during and immediately after the economy's 6.3 per cent contraction between 2008Q1 and 2009Q2. We then use a tax and benefit microsimulation model combined with macroeconomic and...
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Alongside a series of cuts that will reduce welfare spending by £18 billion per year by 2014–15, the UK government announced in November 2010 plans to integrate and simplify means‐tested welfare benefits and in‐work tax credits for working‐age adults into a single programme, to be known as Universal Credit and to be phased in from October 2013. The...
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Conventional in-work benefits (IWB) are means-tested, open to all workers with sufficiently low income, and usually paid without a time-limit. This paper evaluates an IWB with an alternative design that was aimed at lone parents in the UK and piloted in one third of the country, and that featured a time-limit, and was paid conditional on previous r...
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This paper provides evidence on the effect of welfare reform on fertility, focusing on UK reforms in 1999 that increased per-child spending by 50% in real terms. We use a difference-in-differences approach, exploiting the fact that the reforms were targeted at low-income households. The reforms were likely to differentially affect the fertility of...
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A difference-in-differences methodology cannot identify the labour market impact of WFTC alone because other taxes and benefits changed at the same time as its introduction. However, a comparison of the change in employment rates for parents against adults without children should underestimate any positive labour supply impact of WFTC for lone pare...
Technical Report
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Average real UK household income has almost doubled over the past forty years. With four decades of micro-data on household incomes, and relatively simple decomposition methods, we document the contribution to this growth in the mean net household income of working-age households from different income sources, and break down further changes in empl...
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Mike Brewer is Director of the Direct Tax and Welfare Research Programme at the IFS and a Research Affiliate of the National Poverty Center at the University of Michigan. His main research interests are in the impact of welfare reform and the personal tax and benefit system on families with children. He has evaluated the labour market impact of the...
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As a result of the Child Poverty Act (2010), current and future governments are committed to reducing the rate of relative income child poverty in the UK to 10% by 2020-21. This paper looks in detail at the progress made towards this goal under the previous Labour administrations. Direct tax and benefit reforms are very important in explaining at l...
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This paper proposes an overview of the lessons that have been learned over the last 30 years in the economics literature for the optimal design of household tax and transfer programs and oers an application to the case of the United Kingdom. We review the tax and transfer system in the United Kindgom as well as its eects on labor supply. In particu...
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Please note: This paper was updated on 26 October 2010. Childcare costs are often viewed as one of the biggest barriers to work, particularly among lone parents on low incomes. Children in England are eligible to attend free part-time nursery classes (equivalent to pre-kindergarten) from the academic term after they turn 3, and are typically eligib...
Article
Optimal tax rules are used to evaluate the optimality of taxation for lone mothers in Germany and Britain. The theoretical model is combined with elasticities derived from the structural estimation of lone mothers' labour supply. For both countries we do not find that in-work credits with marginal tax rates are optimal. However we show that when th...
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The Government has high-profile child poverty targets which are assessed using a measure of income, as recorded in the Household Below Average Income series (HBAI). However, income is an imperfect measure of living standards. Previous analysis suggests that some children in households with low income do not have commensurately low living standards....
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This Briefing Note discusses how much scope there is to raise revenue from the very rich by increasing income tax rates and assesses in detail the amount of revenue that is likely to be raised by the government's proposed reforms. It extends analysis presented in the 2009 IFS Green Budget and updates some calculations in a submission to the Mirrlee...
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The 2008 Pre-Budget Report (PBR) said that 'the Government will take stock of progress towards its 2010 and 2020 child poverty target in the [2009] Budget'. As background to that exercise, this paper updates our previous analysis of the prospects for child poverty in the UK in 2010-11 and 2020-21.
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There is a vast empirical literature on the allocation of corporate PAC contributions in Congressional elections and the influence that these contributions have on the policy-making process. The attention given to PAC contributions is far in excess of their actual importance. Corporate PAC contributions account for about 10% of Congressional campai...
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The aim of this paper is to analyse the role of unobserved heterogeneity in structural discrete choice models of labour supply for the evaluation of tax-reforms. Within this framework, unobserved heterogeneity has been estimated either parametrically or nonparametrically through random co- efficient models. Nevertheless, the estimation of such mode...
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This paper presents a tour of welfare reforms in the UK since the last change of government, summarising the most important changes in active labour market policies (ALMPS), and in measures intended to strengthen financial incentives to work. It argues that developments in the UK’s active labour market policies occurred in two broad phases: first,...
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Full-text available
This paper proposes an overview of the lessons that have been learned over the last 30 years in the economics literature for the optimal design of household tax and transfer programs, and offers an application to the United Kingdom. We review the tax and transfer system in the United Kingdom and its effects on labour supply. In particular, we inves...
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Full-text available
We use British panel data to investigate single women's labor supply changes in response to three reforms that affected individuals' work incentives. We use these reforms to identify changes in labor supply. There is evidence of small hours of work effects for two of such reforms. A third reform in 1999 instead led to a significant increase in sing...
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In Budget 2007, the Government announced the abolition of the 10% starting rate of income tax alongside a wider set of reforms to personal taxes and tax credits to take effect during the period April 2008 to April 2010. Further changes to tax credits and state benefits were announced in PBR 2007 and Budget 2008, some to take effect in 2008-09, some...
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The Pre-Budget Report given by the Chancellor on 24th November 2008 contained a number of changes to the tax and benefit system to come into effect at various points over the next three years. This briefing note expands on the information provided at a briefing given by IFS researchers on the day after the Pre-Budget Report1. It gives details of th...
Article
This Briefing Note examines what proportion of families have pre-tax private incomes exceeding net support from the state (see the Annex below for precise definitions of all these terms). The analysis was undertaken using the IFS tax and benefit microsimulation model, TAXBEN, and data from the Family Resources Survey and the Family Expenditure Surv...
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This paper uses British panel data to investigate single women’s labour supply changes in response to three tax and benefit policy reforms that occurred in the 1990s. These reforms changed individuals’ work incentives and we use them to identify changes in labour supply. We find evidence of small hours of work effects for two of such reforms. A thi...
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This Commentary presents a detailed analysis of the latest figures and recent trends. It assesses: what has been happening to the gap between rich and poor in Britain; what impact Labour's policies have had on inequality since 1997; how labour's record stacks up to that of previous governments; how close the government is to meeting its child pover...
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Recent falls in poverty amongst those aged 65 and over are unlikely to continue after 2007-08, even after the implementation of the proposals outlined in the Government's Pensions White Paper. This report looks at the prospects for pensioner poverty in England over the next decade. The authors find that that the proportion of those aged 65 and over...
Article
This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...
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We estimate the causal effect of mandatory participation in the military service on the involvement in criminal activities. We exploit the random assignment of young men to military service in Argentina through a draft lottery to identify this causal effect. Using a unique set of administrative data that includes draft eligibility, participation in...
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The international financial crisis manifests itself in Ireland not only as a crisis of the banking system, but also as a major fiscal crisis, aggravated by years of soft revenue policy and a housing bubble that has burst spectacularly. The severe drop in economic output results in a crisis of employment and a definitive end to the ‘Celtic Tiger’ er...
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This paper reviews various techniques for quantifying financial incentives to work, shows how financial work incentives have changed across the population since 1979, and estimates how much of these changes are due to changes in the tax and benefit system.
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This report presents the findings of research into how and when differences in work behaviour between men and women develop, focusing on the evolution of the gender gaps immediately after childbirth and during the initial years of family development. The analysis presented focuses on two crucial periods in family development: when a new baby arrive...
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This paper shows prospects for child poverty in Great Britain, as defined by the current British government, in 2010/11 and 2020/21 under various demographic, economic and policy scenarios. It uses a static micro-simulation model, with projections of some key economic and demographic characteristics. It shows prospects for child poverty in Great Br...
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When data on child poverty in 2003/04 were released, the fall in child poverty since 2002/03 was smaller than had been expected. Brewer et al. (2005) identified several reasons that might explain this, one of which was that the Family Resources Survey (FRS) - the data-set from which the Households Below Average Income (HBAI) income series is curren...
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This Briefing Note compares five recent studies that have examined the labour market impact of the Working Families' Tax Credit and related reforms between 1999 and 2002.
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Can we reconcile the conflict between policies to help people on low incomes by providing direct financial support and those which encourage them to earn more? Two of the strategies used by governments to help people on low incomes – providing direct financial support and encouraging them to earn more – generally conflict. Drawing on large-scale su...
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Much of the recent policy debate surrounding poverty in Britain focuses on income as a measure of living standards. In this report we consider one alternative to income for measuring poverty that has been largely overlooked in the mainstream poverty debate in the UK: namely household expenditure. Economic theory suggests that household expenditure...
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This study uses the first twelve waves of the British Household Panel Survey covering the period 1991-2002 to investigate the extent of constraints on desired hours of work within jobs and the degree of flexibility of the labour market for a sample of women. Our main findings are as follows. First, the largest movements in hours worked are observed...
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With micro-data from before and after a major reform in 1999 to the structure and form of in-work transfers in the UK, this paper uses a structural model of labour supply and programme participation to evaluate the labour market impact of Working Families' Tax Credit (WFTC). Estimates suggest that by 2002, WFTC had increased labour supply of lone m...
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The current government has substantially increased the use of means-tested tax and benefit programmes to try to help people on low incomes. An important early example of this was the replacement in October 1999 of Family Credit (FC), a benefit providing support for low-income working parents, by Working Families' Tax Credit (WFTC). WFTC was deliver...
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This Election Briefing Note shows how the tax and benefit reforms proposed by the three main UK parties would affect government revenues and the incomes of different groups in the population. It also shows how the changes to taxes and benefits already announced by the government and due to come into effect between May 2005 and April 2009 will affec...
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Since Labour came to power in May 1997, there have been substantial increases in spending aimed at helping families with formal childcare, early education and the work-life balance. We look at the effects of these reforms and at the proposals of the parties in this area.
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Full-text available
There is a vast empirical literature on the allocation of corporate PAC contributions in Congressional elections and the influence that these contributions have on the policy-making process. The attention given to PAC contributions is far in excess of their actual importance. Corporate PAC contributions account for about 10% of Congressional campai...