Wellbeing and child poverty
Check out the August edition of Policy Quarterly
As Agatha Christie wrote: “One of the luckiest things that can happen to you in life is to have a happy childhood.” And for most Kiwi kids there are few better places in the world to grow up than in New Zealand. But this is not true for all. And there are concerns that when we look forward some factors important for a happy childhood – like the ability to enjoy the natural environment and access to opportunities to succeed – may be under threat.
The August edition of Policy Quarterly highlights analytical work on wellbeing and child poverty in New Zealand. These are important topics and there is a lot underway, so the papers included are a sample that highlight recent thinking and new analytical approaches. This work will help inform the Treasury’s first wellbeing report, to be published later this year.
Wellbeing questions are complex, and involve trade offs
Tim Hughes outlines how the purpose of wellbeing research has changed over time, and could evolve as we continue to learn. He argues for a hybrid approach that draws insights from both aggregate social indicators and detailed distributional evidence. Wellbeing questions are complex and so looking at problems through multiple lenses makes sense.
The challenge of generating and using appropriate evidence is addressed by Simon Upton, who highlights the difficulty of evaluating environmental issues as they are often complex, long-term, or characterised by tipping points. He argues for the need for better advice on the trade-offs between investing in wellbeing now and investing in wellbeing for the future, along with flexible thinking on how environmental spending should be treated in the annual Budget process.
Income, social & wealth (im)mobility
John Creedy & Quy Ta consider income mobility patterns in New Zealand over the short to medium term. They highlight how unemployment and single parenthood are closely associated with having a persistently low income. They also show that, relative to other groups, sole parents are less likely to exit low-income when they increase their qualification levels.
Simon Brown continues the theme of social mobility, considering how a child’s outcomes are associated with their parents’ situation. He finds a relationship between where parents rank in the income distribution and the expected income and qualification levels of children at 30. He notes this can influence skills development, productivity growth, and the achievement of improved living standards.
Housing wealth could play a role in influencing social mobility, and the work by Luke Symes illustrates long-term changes in the overall wealth distribution in New Zealand and the share of wealth that is held in the form of housing. He highlights a changing pattern of wealth accumulation, with a growing share of households finding home ownership – the first rung of “wealth ladder” – out of reach. The significance of this finding is reinforced with data that show that households that rent are more likely to be living in material hardship or to have high housing costs.
Lack of resources
Lisa Davies, Andrew Webber & Jason Timmins summarise three recent research projects on how disadvantage due to a lack of resources and increased “toxic stress” in the household impact on child wellbeing and development in early childhood. They find that about one in ten children experience substantial disadvantage relating to a lack of resources during early childhood and for many children this lack of resources is persistent. This disadvantage is inequitably distributed across the population and is associated with worse outcomes later in childhood.
But just who is “in poverty”?
Meghan Stephens notes that a central goal of income support policies is to reduce the number of families below a minimum standard of living – in other words to reduce the incidence of poverty. But one challenge is that there is no single measure of what it means to be poor and different measures point to different people being in poverty. She thus outlines an experimental approach that uses the available data on a range of poverty measures, which highlights the complexity of the relationships between material hardship, income, and housing costs.
This complexity of poverty measurement is also raised by Yvonne (Yikun) Wang, who considers what the data on household expenditure tell us. Like Meghan Stephens, she notes the potential mismatch between different types of poverty measures. The implication of this is to consider how different measures provide different insights and could potentially combine to provide a fuller picture on child poverty in New Zealand.
Better data & techniques promise better understanding
Fortunately, as Patrick Nolan, Yvonne (Yikun) Wang & Meghan Stephens discuss, the growing availability of data and improved modelling techniques mean that what is possible continues to improve when it comes to measuring poverty and wellbeing. While they focus on the potential of one tool, the Treasury’s Tax and Welfare Analysis (TAWA) model, there are more general grounds for optimism. Indeed, as Tim Hughes highlighted in the opening article, we have a real opportunity to better understand wellbeing and poverty and, in turn, help ensure that New Zealand is the best place in the world for all Kiwi kids.
Patrick Nolan & Meghan Stephens, The Treasury
This article was originally published in the August edition of Policy Quarterly and is reproduced with permission.
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