View from City Road: Efficiency in a fairer income deal for women

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Financially speaking, men are still a lot more equal than women. While the numbers of each sex employed are now nearly the same, many working women remain dependent on men, relying on handouts from partners to make up their share of household income.

Female part-time employment is rising and male full-time employment falling. But women are still three times as likely as men to be in the bottom tenth of the population as measured by independent income. A study by the Institute for Fiscal Studies for the Equal Opportunities Commission suggests a variety of ways to start putting this right through the social security system, so that women receive more income directly.

Paying extra child benefit to families with children under five, or ceasing fully to offset maintenance payments with cuts in income support, would both increase social security benefits paid directly to women. Raising the amount people can earn before income support or family credit payments are cut would also make it more worthwhile for women to take paid work.

The problem is cost and the fact that women might be deterred from taking part-time work. Instead, why not split equally a household's entitlement to income support between the two partners? That would cost little, even if a small number of working women with unemployed partners cut their hours of work in response.

Better still, the Chancellor could ensure that part-time workers on income support are no longer penalised pound-for-pound for working harder.

This is a better solution than moving the trap of punitive marginal rates a little higher up the earnings scale (as the report suggests). The Chancellor would have to dig deeper into our pockets, of course. The justification is that as well as helping both women and men he would be improving the efficiency of the labour market.

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