Are women more affected by tax and benefit changes than men?

7th Nov 2013

"women [are] paying three times more than men to bring down the deficit"

Gloria de Piero MP, Labour party website, 7 November 2013

The Labour party's claim that women are the "hardest hit" by the Coalition Government isn't new. Shadow equalities minister Yvette Cooper said as much back in April this year, and before that in December 2012. Back then women were hit "four times harder" than men by the government's tax and benefit reforms specifically. This morning the claim became "three times more".

In fact, all the claims are based on the same figures: the difference between them is explained by more how the numbers are framed rather than the substance of the figures themselves.

The findings

To the party's credit, all the numbers and sources are published for all to see on Yvette Cooper's website, so it's easy to see where they're coming from. All the numbers check out.

Labour asked the House of Commons Library - using Treasury data - to take every single specific change to direct taxes, benefits and tax credits since 2010, work out how many people would be affected by each one, and estimate what proportion were men and women. That takes us back to the Coalition's first budget of June 2010 right up to the 2013 budget.

For instance, whenever the government raises the income tax personal allowance (it has done so several times), this tends to affect most income tax payers positively. Since most income tax payers are men, this policy will tend to affect men slightly more than it does women.

On the flipside, most state pension claimants are women, which means changes to pensions will tend to affect women more. As well, more than two thirds of public sector workers are women, so public sector pension reforms and the like will have a larger impact on women as well.

This partly explains why the government's decision early on to uprate benefits and pensions by the Consumer Prices Index (CPI) rather than the usually higher Retail Prices Index (RPI) had a bigger effect on women's payments than men's by about two to one.

Other benefits such as child tax credits and child benefit are overwhelmingly claimed by women, however there's a cautionary note here: it's only possible to split these payments by gender based on whichever parent is the 'nominated' recipient of the benefit, which can be either the mother or father. Just because the mother claims the benefit, doesn't mean that the father is unaffected by any changes to the payments, it just becomes an indirect effect.

The Institute for Fiscal Studies came across a similar problem in their own analysis of the effects of taxes and benefits by gender in 2011. They constrained their findings to the household level since their own model couldn't be relied on to distinguish between individual members of a household, male or female.

Their findings do give us another perspective however, not obvious from the Labour figures.

They found that while government reforms early on did not affect single adult households significantly differently according to gender, the reforms from 2012 onwards disproportionately affect single women compared to single men because single women are more likely to be lone parents as well (and thus lose out from certain reforms to child benefits).

It's easy to explain the fact the women are the more affected by just pointing to the demographics already discussed - women just tend to be in the groups more affected by benefit changes. The reforms in question aren't targeted at women specifically and so they do not affect all women equally.