A “third way” in welfare reform? Evidence from the United Kingdom

U.S. welfare reforms, whether promoting work first or human capital development, have had in common an emphasis on employment as the key to improving the life chances of children living in single-mother families. We describe in this article a different type of reform-a “third way” in welfare reform. The welfare reforms carried out in the United Kingdom since the “New Labour” government of Tony Blair was elected in 1997 have included promotion of paid work, but alongside two other components-an explicit commitment to reduce and eventually eliminate child poverty, and a campaign against long-term disadvantage under the label of tackling “social exclusion.” Welfare-to-work reforms promoting employment for single mothers have been active but not as punitive as in the United States. At the same time, the tax credit and cash benefit system has been radically overhauled, benefiting low-income families with children, whether or not parents are working. Early indications suggest a more rapid fall in child poverty in the United Kingdom since its reforms began than in the United States since its reforms, and a faster rise in single-mother employment. © 2004 by the Association for Public Policy Analysis and Management.