Is There Profit in Reforming the Poor? The English Poor Law 1830-1842

The first great debate on the effects of welfare on the poor was in England in the years 1795-1834, when the Old Poor Law was criticized by Malthus and his followers as encouraging sloth and taxing industry. The English poor had a legal right to subsistence, and by the early nineteenth century about 10% of the population was in receipt of some public relief. After 1834 a new Poor Law regime was adopted with harsher treatment of claimants and a decline in payments to the poor. This paper tests whether the claims of the critics of generous poor relief before 1834, that it reduced labor efficiency and labor mobility and discouraged investment, were correct. We look at the effect reductions in poor relief payments had on land rents in a large set of rural parishes. If the system was as pernicious as contemporaries claimed then each £1 reduction in payments to the poor consequent on the reforms will increase land rents by much more than £1. If the system was merely a transfer of income from landowners to the poor then a £1 reduction in payments to the poor will increase land rents by only £1. If poor relief was widely used because it was largely just a subsidy to wages that aided large land owners then a £1 reduction in payments to the poor will increase land rents by less than £1.