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The labour supply effect of Education Maintenance Allowance and its implications for parental altruism

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  • Holford, Angus

Abstract

Education Maintenance Allowance (EMA) was a UK government cash transfer paid directly to children aged 16-18 in post-compulsory full-time education. Using data from the Longitudinal Study of Young People in England, we find an EMA payment of £30 per week reduces teenagers’ labour supply by 3 hours per week. We show this is consistent with parents withdrawing cash and in-kind transfers from their child to a value between £7.80 and £20.10 per week. We therefore argue that making this cash transfer directly to the child produces higher child welfare than if the equivalent transfer were made to parents.

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  • Holford, Angus, 2014. "The labour supply effect of Education Maintenance Allowance and its implications for parental altruism," ISER Working Paper Series 2014-37, Institute for Social and Economic Research.
    • Handle: RePEc:ese:iserwp:2014-37
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    2. Grogan, Louise, 2018. "The Labeling Effect of a Child Benefits System: Evidence from Russia 1994-2015," IZA Discussion Papers 11962, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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