Moral Hazard & Fairness - Housing

Malcolm.

Question: How much would a couple (with one adult working) need to earn to match the total benefits of a non working couple? Assume eight children and an average cost greater london location.

Answer: More than the average wage.

In here lies a moral hazard. Can you understand this?

michaels

At our school with every 'please send in £x' letter their is a disclaimer about how it is best if all children take part and for those in financial difficulties to contact the school to have the fee waived - no doubt the rest of us pay more to fund this. We buy shoes too big so that they last for at least 6 months and afaik it is best to have no shoes on indoors at home for foot development? This term we have start rite not clarks as the online sale let us buy at 10 and 20 instead of the 30+ at Clarks - yes the choice of styles with dollies in the sole is limited...A pay TV package is not essential and mobiles can be very cheap (900 mintues/month plus data net cost zero for 12 months with cashback) similarly with cashback and shopping around house insurance falls from 360 to about 120 pa and car insurance is down to 200 per car group 9. Nappies are huggies or pampers, whichever is on bogof and bought in bulk, similarly uniforms at bought in sale at appropriate sizes for the season when they will fit. Other children's activities like soft play parties, ballet etc are expensive but are clearly optionals rather than essentials, there are lots of other free alternatives I would have time to do with the kids if I wasn't working.

With 3 kids we could definitely live our lifestyle on that sort of money.

Fiver29

Malcolm. wrote: »

£60 a week is sufficient; it's cheaper by the dozen.
Clothing, toys e.t.c. can be passed down from older sibling.

Coming back to Moral Hazard: how much would a working parent need to earn to afford the same net income?

Yes, boys look so good going to school in their older sister's dresses.

wheeliebin_2

So where are all these drug dealing benefit cheats ?

Why are none of them posting in their defence ?

frank.hopper

wheeliebin wrote: »

So where are all these drug dealing benefit cheats ?

Why are none of them posting in their defence ?

At this time of year most are on holiday, usually spending their ill-gotten gains in Devon & Cornwall.

andrealm

Malcolm. wrote: »

Question: How much would a couple (with one adult working) need to earn to match the total benefits of a non working couple? Assume eight children and an average cost greater london location.

Answer: More than the average wage.

In here lies a moral hazard. Can you understand this?

I've no idea how much they would need to earn. Tbh I think most parents would not choose to have eight children for all the tea in China, so it's irrelevant.

silvercar

Malcolm. wrote: »

Question: How much would a couple (with one adult working) need to earn to match the total benefits of a non working couple? Assume eight children and an average cost greater london location.

Answer: More than the average wage.

In here lies a moral hazard. Can you understand this?

The point I'm making is different to yours. Whilst not disagreeing that a large family on benefits gets an income that requires a high working income to match, excluding all the benefit money that a claimant wouldn't actually get in their pocket like rent and school dinners and free dentists, the real money in the pocket amounts to about £60 per child per week. £60 per child per week doesn't give you a decent lifestyle.

Even living on cheap food, my teenage boys eat through £30-40 a week and that is before you add on clothes, shoes, transport, school stuff, stationary, pocket money etc.

silvercar

michaels wrote:

similarly with cashback and shopping around house insurance falls from 360 to about 120 pa and car insurance is down to 200 per car group 9.

Seriously? My postcode is not that much more expensive than yours and my group 4 car, with maxed NCD costs £320 a year. Can you really get house buildings and contents for £120 pa? I pay over £600!

LydiaJ

andrealm wrote: »

I've no idea how much they would need to earn. Tbh I think most parents would not choose to have eight children for all the tea in China, so it's irrelevant.

No it isn't irrelevant. Study after study after study show that human beings respond to incentives, although not always in the way that one might expect. Avoiding having as many as eight children is easy in this country in this century, and anybody who feels that they wouldn't want them "for all the tea in China" is free not to have eight. But some people do have eight, and there's a reason for that.

Although the reasons why some people choose to have huge families while living on benefit may seem obvious, they probably aren't as clear cut as some people would like to believe. Human beings are complicated things with many motivations, after all. Perhaps there are some people on benefits who feel that their children are the only interesting or purposeful part of their lives. Perhaps it's not that they want to have lots of children, but that they don't have sufficient incentive to go to the bother of avoiding conceiving them. Perhaps the causality runs the other way - that the sort of people who want to have (or can't be bothered to avoid having, or are too stupid to avoid having, or are in an abusive situation where they are inhibited from preventing, or whatever) lots of children are more likely to end up on benefits because they are too stupid or can't be bothered or are in an abusive situation, or because of the prohibitive cost of childcare. I don't know. But there are reasons for people's behaviour - humans don't behave entirely rationally, but we don't behave randomly either.

It's therefore relevant to discuss what the current system provides incentives for, and what its unintended consequences might be. I agree with silvercar that benefits don't provide for affluence when the costs of bringing up children are included. However, that's what we would expect from the data. People who have the skills and education to get interesting and well paid jobs generally choose to work and to have few children. The people choosing to have eight children and live on benefits are mostly not the ones who would be living in affluence if they worked. A life on benefits doesn't have to be attractive to all of us, but if it's more attractive than a life on minimum wage, then a lot of the people for whom that is the choice will choose it. (And of course some people like Sue will end up on benefits by force of circumstances.)

Take me, for example. I have two children and shudder at the idea of having eight. I don't come from a family with three or four generations of worklessness. When my then husband left me, I was working part time, doing 13 hours a week. I found I got no help with childcare, and money was very difficult. I did what I could to get those few extra hours, and by the time the next academic year started, hey presto I was working 16 hours a week and qualifying for WTC help with childcare. People respond to incentives. That's how people function.

(Since then I have chosen to increase my work further to 65% of full time. But then I enjoy my job, and it pays much better than MW, so there are other incentives beyond the WTC one.)

silvercar

I couldn't support 8 children in any way - physically, emotionally, financially, educationally......