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Limit on child benefit 'may have increased incidence of poverty'

The two-child limit on benefits introduced in the UK has not led to a major reduction in fertility but may instead have increased incidence of child poverty, according to new research.

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Researchers found the fall in fertility had been lower than expected. Picture: STOCK IMAGE

Although the probability of having a third or subsequent child reduced by about five per cent after 2017 – when the limit was introduced – researchers said this represented a “much smaller effect” than would have been expected.

This, in turn, could mean that many larger families would suffer a financial hit of about £3,000 a year and could have development consequences for children who would be more at risk of poverty.

The research was co-authored by Professor Jonathan Portes (King’s College London), Dr Mary Reader (LSE), and Dr Ruth Patrick (University of York) and forms part of the wider Larger Families Project which examines the impact of benefit changes on families.

The researchers note: “Our research suggests that the two-child limit is not leading to major reductions in fertility.

“On one level, this is a good thing: there is a persuasive case to be made that it is unethical - if not unlawful - to interfere with reproductive decisions by punishing families for having more children.

“However, the limited fertility effects have concerning implications for child poverty. In the absence of a behavioural fertility response to the policy, the main function of the two-child limit is to deprive families living on a low-income of approximately £3,000 a year.”

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The study, Does cutting child benefits reduce fertility in larger families? Evidence from the UK's two-child limit, can be read in full here.

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Jonathan Portes

Jonathan Portes

Professor of Economics and Public Policy