Child Poverty - Irish Style

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Trends in child poverty 1990-2000

Brian Nolan

A study carried out for the Combat Poverty Agency a decade ago showed that
the level of child income poverty was exceptionally high in Ireland, and
that, furthermore, a substantial gap had opened up between poverty rates for
children and those for adults. The macro-economic environment in Ireland has
changed dramatically since then, with stagnation replaced by economic
growth ? at record levels since 1994. What has been happening to child
poverty? This question is addressed by a new study undertaken for the Combat
Poverty Agency by the Economic and Social Research Institute (ESRI), to be
published shortly.

This study uses data from the 1994 and 1997 rounds of the Living in Ireland
Survey, and from corresponding surveys in other European countries, to
examine the evolution of child poverty in Ireland and to put it in a
comparative perspective. It identifies the main factors still producing
poverty for Irish children and how these have been changing over time. It
also brings out the importance of going beyond household income as an
indicator, to develop and monitor other indicators of child welfare. The
study is intended to contribute to policy formulation, and in particular to
the development of the National Anti Poverty Strategy(NAPS), in the crucial
area of child poverty.

Income Poverty: About one in four Irish children lived in households of
below half average income in 1987. This figure rose between 1987 and 1994,
to about 30%, before falling back to about 25% by 1997. The corresponding
rate for adults rose over the decade to 1997, so the gap between children
and adults also narrowed significantly. Nonetheless, it was still true that
more children than adults were in households of below half average income in
1997. Unemployment was the single most important factor underlying relative
income poverty for children in 1987 and 1994, and as unemployment fell to
1997, so did the proportion of children in households below half average
income.

However, the number of children in households below poverty lines held fixed
in real terms (that is, up-rated in line with prices rather than average
incomes) declined sharply between 1994 and 1997. This reflects the fact that
average incomes rose substantially faster than prices, for both those with
incomes from work and those relying on social welfare. However, social
welfare rates have still lagged behind the exceptionally rapid growth in
earnings and especially profits over the period, which is why relative
income poverty rates for adults ? notably the elderly ? have risen.

A Comparative Perspective

To put the situation of Irish children in comparative context, one can look
at income poverty rates for other European countries. Using relative income
lines based on the average income in the country in question, Ireland had a
relatively high child poverty rate in the late 1980s compared with other
European Community members. More up-to-date figures for the mid-1990s show
that Ireland then had the highest rate of child poverty of any member state.
Portugal and the UK were the only EU members to have nearly as high a rate,
though other industrialised countries outside the Union such as Australia,
Canada and particularly the USA also had high child poverty rates measured
in this way. Applying a common income poverty line across EU or
industrialised countries, rather than country-specific relative lines, gives
a rather different picture but Ireland in the mid-1990s still had a
relatively high child poverty rate on that basis.

Non-monetary Deprivation Indicators The NAPS includes a global poverty
reduction target, framed in terms of a measure of poverty developed at the
ESRI, which incorporates both low income and deprivation of what are widely
regarded as basic necessities. When the Strategy was initiated, the extent
of poverty taken as the baseline for the target was based on results from
the 1994 Living in Ireland Survey. The 1997 Living in Ireland Survey reveals
significant reductions in levels of deprivation since 1994. The percentage
of children in households both below the 60% relative income poverty line
and experiencing basic deprivation fell from 24% in 1994 to 17% in 1997 ?
having fallen only marginally between 1987 and 1994. With about 10% of
adults "consistently poor" in this sense in 1997, this measure showed the
presence of an even bigger poverty gap between children and adults than that
of relative income poverty lines. This is because household deprivation
levels declined more rapidly for adults than children between 1994 and 1997.
More than half the children "consistently poor" in 1997 were in households
seriously affected by unemployment.

Income Poverty Dynamics

Sustained low income (as indicated by analysis of longitudinal data on
income dynamics) is likely to be a better indicator of need than is low
income at one point in time. Using two waves of such data for Ireland, the
study also examines income poverty persistence for households with children.
The results showed that income mobility was common for those on very low
incomes, but much less common for those close to conventional relative
income poverty lines. Measures of income dynamics and non-monetary
indicators of household welfare can thus complement one another in helping
policy-makers to identify and target poor children.

Children?s Well-being The non-monetary indicators in household surveys
usually tell us about the living standards of households with children, but
not directly about the children themselves. Some individual-level indicators
have been developed and are being analysed in a separate project being
carried out by the ESRI for the Combat Poverty Agency. More broadly, though,
as well as poverty and deprivation one needs indicators of the more
wide-ranging concept of child well-being. A limited but broad set of
official indicators has been developed in the USA, and a regular monitoring
report is now produced by the Federal Government each year. A recent study
of child welfare in the European Union emphasises the limitations of the
available indicators, and the need both to analyse existing data from a
children?s perspective and to develop new regular sources of statistics at
European level. This certainly applies with equal force in the Irish
context.

More Recent Developments The household survey data on which the forthcoming
ESRI study is based goes up to 1997. Very rapid economic growth has been
sustained since then, bringing with it further pronounced falls in
unemployment and in long-term unemployment. This represents a continuation
of the underlying trends seen over the 1994-1997 period, and is likely to
have had a broadly similar impact on child poverty. The gap between relative
income poverty rates for children and adults has thus probably continued to
narrow, and deprivation levels are likely to have continued falling. Ireland
?s ranking among European Union countries in terms of relative income
poverty rates for children may also have improved somewhat.

Targeting Child Poverty

The fact that Ireland now has an official global poverty reduction target,
incorporated in the National Anti Poverty Strategy, is a major step forward.
In the light of results from the 1997 household survey, the Government
announced revisions to the original target. "Consistent poverty" is now to
be reduced to below 5% by 2004. Given the implications of high levels of
child poverty for the longer-term, there is a strong case for also having
poverty targets relating specifically to children. While it would be
important to include a target for the numbers of children in "consistent
poverty", the scope of the poverty targets could usefully be broadened to
distinguish real income levels, non-monetary deprivation indicators, and
relative incomes. Indeed, targeting child poverty itself needs to be located
within a broader societal strategy to improve in a quantifiable way the
well-being of Irish children.

[The rest of this article was okay (if unduely 'positive' in its choice of
statistics - but this last paragraph was off-the-wall. The Anti-Poverty
Strategy adopted by the Free State does include a single target of reducing
'global poverty' to 5% although this is unlikely to be achieved as a direct
result of Government interventions. Indeed, I wouldn't give them much chance
of achieving it in any case: if the Free State didn't achieve substantial
reductions in child (or adult) relative poverty measures during an
expansion - I'd hate to see what they would do now the cut-backs have
began.]

Brian Nolan is Research Professor at the ESRI.


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