Two-child limit to benefits is only serving to increase poverty further, new report finds

The report, by academics at the University of York, London School of Economics and King’s College London, has found that the main result of the two-child limit is to deprive families living on a low-income of approximately £3000 a year per child affected, inevitably driving increases in child poverty among larger families. 

When former chancellor George Osborne introduced the policy, he said the aim was to ensure that families receiving benefits faced the same financial choices about having children as those supporting themselves solely in work.

Five years on from the introduction of the limit, the Nuffield Foundation-funded research reveals that the fertility rate for third and subsequent children born to poorer families has fallen by just under 1%, or approximately 5,600 births a year. 

Poverty

Dr Ruth Patrick from the School for Business and Society at the University of York, said: "The two-child limit is five years old today. That is five years with a policy that punishes children, and pushes affected families deeper into poverty and hardship. This research shows that the two-child limit is a poverty-producing policy and one which should be removed."

The study examined fertility trends among adult women of childbearing age, both those affected by the policy and those who were not, allowing for differential fertility trends between low-income women and others, and between those who already had two or more children and those who did not. 

The researchers found that the two-child limit reduced the probability of having a third or subsequent child declined by 0.36 percentage points (or 5 percent) after it was introduced.

Lead author of the research, Mary Reader, from the London School of Economics added: "This research shows that the ostensible rationale behind the two-child limit is fundamentally flawed. The policy assumed that cutting child-related benefits for low-income families would disincentivise families from having more than two children. But our research shows that fertility has declined only slightly." 

Further information

The study 'Does cutting child benefits reduce fertility in larger families? Evidence from the UK’s two-child limit' is available here.