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The Birthweight Effects of Universal Child Benefits in Pregnancy: Quasi- Experimental Evidence from England and Wales

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The Birthweight Effects of Universal Child Benefits in Pregnancy: Quasi- Experimental Evidence from England and Wales The birthweight effects of universal child benefits in pregnancy: quasi- experimental evidence from England and Wales Mary Reader CASE/222 Centre for Analysis of Social Exclusion February 2021 London School of Economics Houghton Street London WC2A 2AE CASE enquiries – tel: 020 7955 6679 Contents 1. Introduction ...................................................................................................... 1 2. Background ....................................................................................................... 4 2.1 Policy specifics ................................................................................................... 4 2.2 Causal mechanisms .......................................................................................... 6 2.3 Regression discontinuity (RD) design ..................................................... 9 3. Methodology ................................................................................................... 10 3.1 Analytical framework .................................................................................... 10 3.2 Data and descriptive statistics .................................................................. 12 3.3 Regression discontinuity (RD) design ................................................... 14 5. Results ............................................................................................................... 16 5.1 Impact on birthweight and low birthweight status (<2500g) .... 16 5.2 Heterogenous effects by birthweight, maternal age and income deprivation ...................................................................................................................... 19 5.3 Testing the validity of the RD methodology ........................................ 22 6. Discussion ........................................................................................................ 27 7. Conclusion and policy implications ....................................................... 30 References ............................................................................................................... 34 Appendix ................................................................................................................... 43 ii Centre for Analysis of Social Exclusion The Centre for Analysis of Social Exclusion (CASE) is a multi-disciplinary research centre based at the London School of Economics and Political Science (LSE), within the Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD). Our focus is on exploration of different dimensions of social disadvantage, particularly from longitudinal and neighbourhood perspectives, and examination of the impact of public policy. In addition to our discussion paper series (CASEpapers), we produce occasional summaries of our research in CASEbriefs, and reports from various conferences and activities in CASEreports. All these publications are available to download free from our website. For further information on the work of the Centre, please contact the Centre Manager, Annie-Rose Nicholas, on: Telephone: UK+20 7955 6679 Email: [email protected] Web site: http://sticerd.lse.ac.uk/case © Mary Reader All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. This work contains statistical data from ONS which is Crown Copyright. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. This work uses research datasets which may not exactly reproduce National Statistics aggregates. iii Editorial note Mary Reader is a Research Officer at CASE. The author would like to thank Dr Kitty Stewart for her invaluable support in the development of this research, as well as Dr Berkay Özcan, Dr Tania Burchardt, Dr Eleni Karagiannaki and Dr Giulia Giupponi for comments on earlier drafts, and Professor Daniel Sturm and Dr Janne Tukiainen for methodological advice. Thanks also to the Members of Parliament who were interviewed about the political context of the Health in Pregnancy Grant for this paper – Rt Hon Harriet Harman QC MP, Kate Green MP, Dr Dan Poulter MP and Rt Hon Ben Bradshaw MP. Abstract Over a decade ago, in April 2009, the UK Labour government introduced the Health in Pregnancy Grant (HPG), a cash transfer of the equivalent of child benefit over the third trimester (£190) as a lump sum to all pregnant women in the United Kingdom. As a labelled, universal and unconditional cash transfer with near-universal take-up, the HPG remains the only international example of paying the equivalent of child benefit during pregnancy to improve health outcomes at birth. The grant was designed to improve birthweight by helping mothers afford high-quality nutrition and reducing stress in the prenatal phase. In January 2011, the HPG was abolished by the Conservative-Liberal Democrat Coalition on grounds, in part, that it was a “gimmick” with little evidence of impact on birthweight. This CASEpaper quantitatively evaluates the impact of the HPG on birthweight in England and Wales. Using administrative birth registrations data, I implement a quasi-experimental regression discontinuity (RD) design based on an arbitrary eligibility rule for the HPG. I find that the HPG was responsible for an increase of 11g in birthweight on average and that effects were concentrated on the smallest babies. Increases in birthweight were largest for younger mothers aged 25 and under (29g average increase) and mothers living in areas with high levels of deprivation (20g average increase). While younger mothers experienced a reduction in the probability of low birthweight by 0.9 percentage points (12 percent in relative terms), low birthweight did not fall for the population as a whole. My findings suggest that paying the equivalent of universal child benefits in pregnancy as a labelled lump sum can disproportionately benefit disadvantaged groups such as younger mothers and lead to effect sizes that are larger than would be expected of more general windfall increases in income. Key words: birthweight, cash transfers, child benefit, infant health JEL number: I14, I38 Corresponding author: [email protected] iv 1. Introduction The principle that the state should contribute towards the needs and costs of all children is well established internationally. In 2020, UNICEF found that 60 percent of countries with available information had some form of child benefit enshrined in legislation (UNICEF, 2020). Universal or quasi- universal child benefits – cash payments to all children on a regular basis without conditions attached – are an important plank of the social security system in many high-income countries, particularly in Europe. Prior to 2013, the UK was among the list of European countries (including Austria, Estonia, Finland, Germany) who paid fully universal child benefits, with many others paying variants on this (UNICEF, 2020). Typically, however, this kind of support has only applied to children at or after birth. Meanwhile, cash transfers during pregnancy have also emerged as a popular mechanism for boosting health outcomes and human capital in many low- and middle-income countries (De Brauw and Peterman, 2020). However, they tend to be either means-tested (e.g., Mozambique, Nigeria, Indonesia, Jamaica) or conditional (e.g., Mexico, Brazil, Turkey, Peru, India) (Chersich et al, 2016). Over a decade ago, the UK Labour government introduced a Health in Pregnancy Grant (HPG) – a single, tax-free, non-means-tested lump sum of £190 to all pregnant mothers from the twenty-fifth week of pregnancy (Roll, 2007). In doing so, it bucked the international trend by bringing together two disparate aspects of international social security policy design: universal child benefits to provide income support on one hand, and pregnancy cash transfers to improve health outcomes on the other. Other European countries had experimented with universal maternity grants but differed in important respects. France and Belgium have one-off ‘birth payments’, but their role is to provide income support around the birth of a child rather than to improve birth outcomes by boosting nutrition and reducing stress during pregnancy: they are either paid at birth (France) or at 28-32 weeks of pregnancy at the earliest (Belgium). The country that has come closest to the HPG is Finland, which has had a universal maternity package since 1949 that includes a choice between a ‘baby box’ of clothes and toys and a one-off €170 cash transfer from the twenty-second week of pregnancy. However, since the box is worth more than the transfer, 95 percent of first-time mothers choose the baby box instead of the cash grant (Koivu et al, 2021). As such, the Finnish maternity grant’s take-up levels are significantly lower than the estimated take-up rates of the HPG (see Section 2.1). The philosophy underpinning the HPG was that many health inequalities were established during pregnancy, and that birth was an arbitrary occasion to start contributing towards the costs of having a child. Paying the equivalent of child benefit in an easily accessible lump sum during the third 1 trimester of pregnancy would help extend support for struggling families and narrow birth inequalities in birthweight and prematurity, the government argued. A government minister stated in committee that “In a way, we could call the measure
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