Friday, September 18, 2009

Unemployment and children

The Summitt I attended on Wednesday was a hand-wringing hui about children affected by recession and what the government should be doing for them. My contention was child poverty in NZ is fairly constant. The recession has only broadened it.

According to the NZ Christian Council for Social Services, at June 2009 there were 219,627 children relying on benefits. 13.5 percent of working age beneficiaries have a current earnings declaration meaning they had participated in work throughout or at some point during the previous 12 months. A crude calculation taking 13.5 percent off the total to get the lowest possible number of children with non-working parents produces 189,977.

There are an estimated 1,083,690 children aged under 18 (NZ Statistics).

The percentage of children in workless families is therefore 17.5 percent.

So how does that compare to Europe?

NZ is higher than any.

But when unemployment rates are laid alongside these countries, the picture changes.

This strikingly illustrates the effect of the DPB.


Opinionated Libertarimum said...

Oh my goodness. The graphs are fascinating. And yet so depressing. I feel like I'm depriving my children of their right to a DPB.

Berry said...

There's another aspect there I think. There are some 109,000 DPB recipients, but no definite data on the amount of children depending on DPB, but given the average number of children / household (using the divorce statistic of 1.8 from Statistics NZ), this amounts to about the same 190,000 you are talking about.
Effectively this would indicate that just about all these children in workless families also live in DPB dependent families (i.e. with solo mums, bar some exceptions).
We all know the nature of most of these 'workless' and 'solo mum' households.

Lindsay Mitchell said...

If you check that link to NZCCSS they give a breakdown of how many children rely on DPB and how many on other benefits.

But remember not all DPB recipients have dependent children and not all could be described as workless due to working part-time or seasonally.

Berry said...

What do you mean Lindsay, the criteria for the DPB are that you MUST have a dependent child.
While some may have part time work, your calculation already excluded those who had worked in the last 12 months. The NZCCSS site, pretty much confirms the number, they have 172,000 DPB dependent and some 220,000 "all main benefits". There may be a couple of thousand difference somewhere, but in the end I think we can safely say that there are some 180,000 completely welfare dependent children living in sole parent 'families' where there is no substantial history of work.
If one was to be very blunt, these are children that have been bred for one purpose only, the 'domestic purpose(benefit)', and the majority of these children will grow up will grow up in less than desirable circumstances, to put it mildly. Not because there is not enough money thrown at the problem, but because that money doesn't end up supporting these children, it ends up supporting the CHOSEN lifestyle of the parents (mostly mothers, and 'partners')

Lindsay Mitchell said...

There are three categories of DPB.

Carers - looking after someone sick or infirm who would otherwise be institutionalised. Typically 5-6000.

Woman alone - been on DPB so long she can't get work when her nest is empty. Appx 3000. Officially;

A Domestic Purposes Benefit - Women Alone is available to unsupported women without dependent children who become alone or lose the support of a partner after:

* turning 50 years of age
* either:
o caring for dependent children for at least 15 years
o caring full-time for a sick or frail relative for at least five years, or
o being supported by their partner for at least five years.

Single parent.Remainder.

I'd say about half to 60 percent of recipients do not have a "substantial" work history but quite a few will have come out of longstanding relationships, do have qualifications/skills and won't spend years reliant. And they hate being on welfare.

The DPB population is quite diverse.

Berry said...

Thanks for that specification Lindsay, how does that impact on the numbers though? It would seem that some 10,000 of the 110,000 DPB recipients are entitled in the non-child categories, which brings the NZCCSS numbers better in line with the 1.8 child/family average as well.

In very rough numbers, there are about 5000 divorces annually involving a total of about 7,500 children (out of 10,000 divorces). There are no accurate stats for non-marital break ups. A rough approximation is that this is some 70% of the marriages. This means that there can be more than some 8,500 DPB recipients that come out of a 'recent' (i.e. 12 mths since break up) substantial relationship. If we are assuming that NO recently separated continue in work(which is of course incorrect), then the number of children associated with the group you refer to as "hating it" (i.e. those the system was actually intended for) can't be but a relatively small percentage (say 10-15%) of the 170-180,000 DPB dependent children.

So while the DPB population may be diverse, it would seem that the great majority is in the group of solo mothers without substantial work experience, and that this group is associated with the great majority of the DPB dependent children as well.
I admit I haven't quite got my head around the precise make up of this group, though.

Anonymous said...

Lindsay, you have used the wrong statistics and misinterpreted the earnings declaration data.

Firstly, the 13.5% of working age beneficiaries who have a current earnings declaration includes beneficiaries with no children. In the June 2009 Benefit Fact sheet for all working age benefits, which shows the 13.5% with a current earnings declaration, only 21% of all working-age benefits included children.

In the fact sheet for DPB, 16.8% of recipients had a current earnings declaration, and just over half of sole parents on DPB were caring for two or more children.

Secondly, current earnings means earnings at the current date, not earnings at some point over the last 12 months as you have stated. Measured over a year, the proportion of children whose carers have had earnings would be larger.

Thirdly, I looked up the Eurostat data and found it’s for children living in workless HOUSEHOLDS, not workless FAMILIES:

"SC071 Children aged 0-17 living in jobless households: share of persons aged 0-17 who are living in households where no-one is working"

Children whose caregivers aren’t working may live in households where there are other adults employed. Perry’s 2009 Household Income Distribution paper (p99) estimated that around a third of sole parent families lived in wider households with other adults in 2008.

If we look at households comprising one parent and dependent children only, in the June 2009 Household Labour Force Survey Information Release, just under half (46 percent) were workless. In two-parent households with dependent children, around one in twenty (5 percent) were workless. Unfortunately, the figures aren't shown for children or for all households with dependent children but these are more comparable data to use with the Eurostat figures than the numbers you've pulled together, and they are readily available.

Lindsay Mitchell said...

Firstly, I used the 13.5 percent figure because it applied across benefits and children are dependent on all benefits - not just the DPB. I specifically called it a 'crude' calculation which acknowledges its impreciseness. I considered using the 16.8 percent for the DPB population but then gave it up as a bad job because quite a chunk of DPB recipients also do not have children. Those who do not that may be more likely to have a current earnings declaration.

The factsheet says in respect of current earnings; "13 percent had a current earnings declaration, indicating participation in paid work during the last 12 months."

Open to interpretation. For instance, many beneficiaries are also seasonal workers. They would have a current earnings declaration.

But even on your interpretation, my calculation would hold because I treated the number as a maximum which would have the same effect as treating it as point-in-time.

If the European data refers to households and not families, I accept that. The first chart is not mine. Which means the authors of the UK report it hails from are also mistaken.

As for using the HLFS to estimate a number, it isn't possible - as you point out. And the HLFS is based on a sample rather than a dataset covering all benefit recipients.

Perhaps you could have a go at scientifically working out how many NZ children live in workless families and/or households using the 'right' statistics and let me know.

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