Canadian Council on Social Development 441 MacLaren Street 4th/e Floor/Étage Ottawa, ON K2P 2H3

Conseil canadien de développement social Tel: (613) 236-8977 Fax: (613) 236-2750 E-mail: council@ccsd.ca Internet: www.ccsd.ca

Income and Child Well-being:
A new perspective on the poverty debate

by David P. Ross and Paul Roberts

     

EXECUTIVE SUMMARY

Two significant events have occurred over the last few years in relation to the study and discussion of child well-being in Canada. The first was the release of new and important data in the National Longitudinal Survey of Children and Youth (NLSCY) and in the National Population Health Survey (NPHS). The second significant event has been the growing public debate about the meaning and measurement of poverty in Canada. Essentially, this debate is occurring between those who consider poverty to be grossly overestimated, and those who believe that poverty in Canada is, if anything, underestimated.

In carrying out the research for this report, it became clear to the authors that what we need in Canada is a new and realistic approach that will allow us to determine an appropriate poverty line. With this in mind, the authors have framed their research around the following question: What if producing healthy children was the main objective of anti-poverty efforts in Canada?

In Part I of this report, the authors examined 27 elements of child development including family functioning, neighbourhood safety, aggression, health status, math and vocabulary scores, and participation in sports or clubs. They found that the level of family income plays a crucial role in the child development process: in 80 per cent of the variables examined, the risks of negative child outcomes and the likelihood of poor living conditions were noticeably higher for children living in families with annual incomes below $30,000. This was also true for 50 per cent of the variables examined for children living in families with incomes below $40,000 per year.

For this analysis, the authors divided the child development process into six categories: family, community, behaviour, health, learning outcomes, and cultural and recreational participation.

Family

• Children in low-income families are twice as likely to be living in poorly functioning families as are children in high-income families.
• Nearly 35 per cent of children in low-income families live in substandard housing, compared to 15 per cent of children in high-income families.

Community

• More than one-quarter of children in low-income families live in problem neighbourhoods, compared to one-tenth of children in high-income families.

Behaviour

• Nearly 40 per cent of children living in low-income families demonstrate high levels of indirect aggression (such as starting fights with their peers or family members), compared to 29 per cent of children in families with incomes of $30,000 or more.

Health

• Children in low-income families are over 2½ times more likely than children in high-income families to have a problem with one or more basic abilities such as vision, hearing, speech or mobility.

Learning Outcomes

• More than 35 per cent of children in low-income families exhibit delayed vocabulary development, compared to around 10 per cent of children in higher-income families.

Cultural and Recreational Participation

• Almost three-quarters of children in low-income families rarely participate in organized sports, compared to one-quarter of children in high-income families.

 

In Part II of this report, the authors discuss the relationship between poverty lines and children's development. Much of the debate today concerns establishing the "correct" poverty line, but this not only diverts attention away from the plight of poor children and their families, it also ignores the question of why poverty lines should be set in the first place. This report attempts to define an unacceptable level of inequality among families - that is, one that fails to ensure roughly equal life chances for all children. The authors suggest that once the level at which children experience "poverty of opportunity" is determined, discussion can then focus on how best to change the circumstances so that children will have optimal chances of developing to their potential and becoming successful adults.

This report demonstrates that the level of income families need to maximize their children's chances of full development goes well beyond the amount needed for the basic provision of food, clothing and shelter. Based on their research, the authors suggest that an appropriate child poverty line should be set within the range of $30,000 to $40,000 for a family of four. This line is higher than any of those currently in use, such as the poverty line suggested by the Fraser Institute and higher than Statistics Canada's low income cut-off (LICO). It is also higher than a poverty line suggested by the general public in opinion polls, and it is well below the median income level in Canada.

In reviewing earnings trends over the past 25 years, the authors find that income inequality among families with children has gotten worse. In 1973, the poorest 20 per cent of families with children earned only 5.3 per cent of all market income - that is, earnings from employment and private investments. By 1996, their share had dropped to 2.3 per cent. Over the same period, the richest 20 per cent of families with children saw their share of market income rise from 38.4 per cent to 43.2 per cent. This income inequality among families lessened somewhat after adjustments were made for government income taxes and transfers such as welfare payments, unemployment insurance and child benefits, but the poorest families still received a significantly smaller share of the total family income in Canada than did families with the highest incomes.

With regard to family earnings, parents with low levels of education and skills are still lagging behind in employment and wages. Social benefits have fallen over the years, relative to increases in the cost of living, and certain groups - most notably young and single parents, people with disabilities and those belonging to ethnic minorities - face particular difficulties trying to earn enough money to raise their incomes above the LICO.

Having identified an income level that would allow families to provide reasonable opportunities for their children's development, and after reviewing the growing polarization of income, the authors then consider how public policies can best support the optimal development of children. While government transfers can help to redistribute some income to Canada's poorest children, they are not sufficient to overcome many of the difficulties faced by families with children, such as poor housing and family conditions.

And transfers are not the only anti-poverty strategy that can be adopted, the authors emphasize. Ideally, increased transfers should be accompanied by efforts to increase families' economic self-reliance. This could be accomplished by providing educational and training opportunities, housing assistance, child care, and workplace assistance to people with disabilities, as well as by promoting job flexibility and more family-friendly workplaces. The authors claim that by positively and proactively supporting families to generate more earnings, these measures will reduce the need for straight income transfers.

     

The Canadian Council on Social Development (CCSD) is an independent, national, non-profit organization focussing on issues of social and economic security.

[ CCSD Home Page ] [ CCSD Publications ] [ CCSD E-mail ]