Children of the Recession - The impact of the economic crisis on child well-being in rich countries
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UNICEF Innocenti Report Card 12 Children in the Developed World Children of the Recession The impact of the economic crisis on child well-being in rich countries
Innocenti Report Card 12 was written by Gonzalo Fanjul and edited by Rick Boychuk. The UNICEF Office of Research – Innocenti would like to acknowledge the generous support for Innocenti Report Card 12 provided by the Government of Italy. Any part of this Innocenti Report Card may be freely reproduced using the following reference: UNICEF Office of Research (2014). ‘Children of the Recession: The impact of the economic crisis on child well-being in rich countries’, Innocenti Report Card 12, UNICEF Office of Research, Florence. The Report Card series is designed to monitor and compare the performance of economically advanced countries in securing the rights and well-being of their children. In 1988 the United Nations Children’s Fund (UNICEF) established a research centre to support its advocacy for children worldwide and to identify and research current and future areas of UNICEF’s work. The prime objectives of the Office of Research are to improve international understanding of issues relating to children’s rights, to help facilitate full implementation of the Convention on the Rights of the Child supporting advocacy worldwide. The Office aims to set out a comprehensive framework for research and knowledge within the organization, in support of its global programmes and policies. Through strengthening research partnerships with leading academic institutions and development networks in both the North and South, the Office seeks to leverage additional resources and influence in support of efforts towards policy reform in favour of children. Publications produced by the Office are contributions to a global debate on children and child rights issues and include a wide range of opinions. For that reason, some publications may not necessarily reflect UNICEF policies or approaches on some topics. The views expressed are those of the authors and/or editors and are published in order to stimulate further dialogue on issues affecting children. Cover photo © Shutterstock ©United Nations Children’s Fund (UNICEF), September 2014 ISBN: 978 88 6522 030 6 ISSN: 1605-7317 UNICEF Office of Research – Innocenti Piazza SS. Annunziata, 12 50122 Florence, Italy Tel: +39 055 2033 0 Fax: +39 055 2033 220 florence@unicef.org www.unicef-irc.org
Innocenti Report Card 12 Children in the Developed World Children of the Recession The impact of the economic crisis on child well-being in rich countries
Children of the Recession Executive summary The data and observations in this below the poverty line) has Universal aftershocks Innocenti Report Card reveal a increased since 2008. In 18 Those countries most affected by strong and multifaceted relationship countries child poverty has fallen, the recession have seen a steady between the impact of the Great sometimes markedly. deterioration in the situation of Recession on national economies and a decline in children’s well-being » The number of children entering families, mostly from job losses, into poverty during the recession underemployment and cuts to since 2008. Children are suffering public services. The median income is 2.6 million higher than the most, and will bear the in households with children has number that have been able to consequences longest, in countries decreased in almost half of the escape from it since 2008 where the recession has hit hardest. countries with available data. The (6.6 million, as against 4 million). For each country, the extent and Around 76.5 million children live number of families stating that their character of the crisis’s impact on in poverty in the 41 most affluent situation is ‘very difficult’ has risen children has been shaped by the countries. in most countries. Having a child or depth of the recession, pre-existing children in a household increases economic conditions, the strength » The recession has hit young the risk of ‘working poverty’ people extremely hard, with the (working, but below the poverty of the social safety net and, most NEET (not in education, line) from 7 per cent to 11 per cent. importantly, policy responses. employment or training) rate Since 2008, the percentage of Remarkably, amid this rising dramatically in many households with children that are unprecedented social crisis, many countries. In the EU, 7.5 million unable to afford meat, chicken or countries have managed to limit – young people (almost the fish every second day has more or even reduce – child poverty. It population of Switzerland) were than doubled in Estonia, Greece was by no means inevitable, then, NEET in 2013 – nearly a million and Italy. Inability to cope with that children would be the most more than in 2008. The United unexpected financial expenses has enduring victims of the recession. States and Australia have had the increased by almost 60 per cent, on The impact of the recession largest increases in the NEET rate average, in households with on children across non-EU OECD countries. children in the This report offers multiple and 12 most affected countries. » Beyond income and employment detailed perspectives on how the levels, the recession has affected Such changes have huge recession has affected children in a number of other important consequences for the young. the developed world. Official data dimensions of people’s lives. From Children feel anxious and stressed have been used to rank the impact 2007 to 2013, feelings of insecurity when parents endure on children for countries in the and stress rose in 18 of the 41 unemployment or income loss, and European Union (EU) and/or the countries, according to measurable they suffer family downturns in Organisation for Economic self-perception indicators subtle and painfully evident ways. Co-operation and Development (including access to food and Housing, a large part of every (OECD): satisfaction with life). The family’s budget, is one important » In 23 of 41 countries analysed, recession’s impact on personal indicator of poverty. Evictions, and in many of the highly experiences and perceptions is mortgage defaults and foreclosures populated countries, child not yet over, and many indicators all spiked in many countries poverty (children living in have even worsened in the most affected by the recession. Such households whose income is recent years. constraints at home have been 2 I n n o c e n t i R e p o r t C a r d 1 2
E x e c u t i v e s u m m a r y compounded by weakened safety increased more rapidly (or has from financial markets forced many nets in healthcare, education and decreased more slowly) for the governments to cut budgets. The nutrition. Some 1.6 million more young than for the elderly. In 24 of Eurozone’s U-turn was particularly children were living in severe the 31 countries, poverty levels abrupt, and there was a fall in social material deprivation in 2012 have decreased among the elderly, spending on children and families. (11.1 million) than in 2008 while among children they have Social protection responses have (9.5 million) in 30 European increased in 20 countries, varied considerably in magnitude countries. The longer these children suggesting that safeguards for the and makeup. When budget cuts remain trapped in the cycle of old have been more effective than became unavoidable in certain poverty, the harder it will be for for the young. countries, particularly in the them to escape. A generation cast aside Mediterranean region, the shift from Poorer children suffer most stimulus to consolidation increased Unemployment among adolescents The poorest and most vulnerable and young adults is a significant inequality and contributed to children have suffered long-term effect of the recession. worsening living conditions for disproportionately. Inequality has Among those aged 15–24, children. During the second phase increased in some countries where unemployment has increased in 34 of the recession, the effectiveness overall child poverty has decreased, of the 41 countries analysed. Youth of child poverty reduction efforts suggesting that tax changes and unemployment and declined in a third of EU countries. social transfers intended to help the underemployment have reached Extreme child poverty in the United poorest children have been States increased more during the worrying levels in many countries. relatively ineffective. Great Recession than it did in the Even when unemployment or recession of 1982, suggesting that, The ‘poverty gap’ (a measure of the inactivity decreases, that does not for the very poorest, the safety net distance between the poverty line necessarily mean that young people affords less protection now than it and the income of people below it) are finding stable, reasonably paid did three decades ago. has worsened in countries where jobs. The number of 15- to 24-year- poverty has increased most, No government was prepared for olds in part-time work or who are meaning that deprivation in those the extent or depth of the recession underemployed has tripled on countries is more extensive and and none reacted in the same way. average in countries more exposed intense. It is notable that this Many countries with higher levels to the recession. Contract work has inequality has also increased in of child vulnerability would have become more common, some places where overall child been wise to strengthen their safety contributing to the general poverty has decreased. Moreover, nets during the pre-recession period precariousness of labour markets. children in particularly vulnerable of dynamic economic growth, situations – such as those in An uneven response which was marked by rising jobless, migrant, lone-parent and Many governments adopted disparity and a growing large households – are over- economic stimulus packages in the concentration of wealth. represented in the most severe initial phase of the recession, Governments that bolstered existing ranges of poverty statistics. pushing up public spending. The public institutions and programmes In 28 out of 31 European countries persistence of the recession led to helped to buffer countless children (EU plus Iceland, Norway and a decrease in national revenues and from the crisis – a strategy that Switzerland) the poverty rate has an increase in deficits. Pressure others may consider adopting. I n n o c e n t i Re p o r t C a r d 1 2 3
E x e c u t i v e s u m m a r y The consequences of a Great The problems have not ended for » Make an explicit commitment to Leap Backward children and their families, and it end child poverty in developed All countries faced difficult choices, may well take years for many of countries. Countries should limited budgets and worsening them to return to pre-crisis levels of place the well-being of children recessions. The enormity of the well-being. Failing to respond boldly at the top of their responses to challenges should not be could pose long-term risks – for the recession, aligning their underestimated. Demand for example, there has been a break in ethical obligations with their austerity measures was intense, the upwards trend in fertility rates. self-interest. In no region are these risks more as were pleas from other vulnerable » Rescue, prevent and give hope. sectors. Compromises were problematic than in Europe, where Opportunities to break cycles of undoubtedly necessary. inequality is rising within and child vulnerability should be between Member States, But if protection policies had been promoted. Guaranteed minimum threatening to undermine the stronger before, and if they had social standards would make a ambitious targets of Europe’s been strengthened during the positive difference. 2020 agenda. recession, how many more children » Produce better data for informed could have been helped? The children of the recovery public debate. Availability, What lies ahead for children timeliness and relevance of A calculation of the impact of the neglected by the global response information about the well-being crisis on the median income of to the Great Recession? If the of children should be improved. households with children suggests neglect persists, the crisis among that, between 2008 and 2012, children will continue well after Greek families lost the equivalent any economic recovery. The long- of 14 years of progress; Ireland, term well-being of our societies Luxembourg and Spain lost a full is at stake. decade; and four other nations lost almost as much. The Great The analysis in this report suggests Recession has brought suffering the following principles and and life-long risks to an extra recommendations for governments 619,000 children in Italy, 444,000 to consider in strengthening child in France and 2 million in Mexico. protection strategies: 4 I n n o c e n t i Re p o r t C a r d 1 2
SECTION 1 Introduction “The child should be fully prepared to live an individual life in society, and brought up in the spirit of the ideals proclaimed in the Charter of the United Nations, and in particular in the spirit of peace, dignity, tolerance, freedom, equality and solidarity.” – Convention on the Rights of the Child, 1989 Twenty-five years after the As the data in this new edition of To be sure, the situation described Convention on the Rights of the Child the Innocenti Report Card series here varies from country to became international law, many of its show, in the past five years, rising country. A small but significant commitments remain unrealized, and numbers of children and their group of countries responded to the developed countries most families have experienced difficulty the crisis with ambitious and capable of delivering on them are in satisfying their most basic timely plans that have sheltered losing ground. The Great Recession, material and educational needs. children from the recession’s which was triggered by a financial Unemployment rates not seen since most debilitating consequences. meltdown that started in the United the Great Depression of the 1930s Many others have implemented States and spread rapidly across the have left many families unable to partial reforms to safeguard such globe, has inflicted the economic provide the care, protection and essentials as health services, crisis on children. The gap between opportunities to which children are housing and food. In some cases, rich and poor families has widened in entitled. Most importantly, the the honest efforts of governments an alarming number of industrialized Great Recession is about to trap have been hindered by the weight countries. For many of these a generation of educated and of the conditions imposed on children, once again place of birth capable youth in a limbo of them by the financial markets may determine their rights and unmet expectations and lasting and the providers of financial opportunities in life. vulnerability. assistance. I n n o c e n t i R e p o r t C a r d 1 2 5
S E C T I O N 1 I nt r o d u ction This report is not intended to levels of children; the impact of the recommend specific responses to recession on youth; and what the economic downturn or to repeated rounds of the Gallup comment on the austerity policies World Poll show about the change that some countries are pursuing. in people’s perceptions of their life Rather, its goal is to highlight the circumstances over the past five fact that the current and future lives years. Section 3 describes the of children have been – and are impact of the Great Recession on being – neglected in the global families, analysing the magnitude of response to the Great Recession. the shock on children and Should this neglect persist, the comparing it with the condition of crisis for children will continue other social groups. It also explores to be felt well after the economic the effects of the recession on recovery. The long-term social youth seeking to enter or remain in health of our societies is at risk. If the labour force in the middle of a generations have defining moments, recession. Section 4 offers an this is certainly one of them. explanation for why this happened, looking at the period that preceded The structure of the report is as the crisis and describing the follows: Section 2 features ‘league responses of different tables’, the flagship tool of the governments. Section 5 presents Innocenti Report Card series. The conclusions and recommendations. tables rank the change, since the onset of the crisis, in the poverty 6 I nnocenti Re p o r t C a r d 1 2
S E C T I O N 2 T h e l e a g u e t a b l es SECTION 2 The league tables Countries should place the well-being of children at the top of their responses to the recession. Not only is this a moral obligation but it is in the self-interest of societies. Surveys and polls produced in the a complex concept – how children The rankings focus on 2007/2008 European Union (EU) and/or the have fared during the Great up to the latest period for which Organisation for Economic Recession. The first covers data are available. A light blue Co-operation and Development monetary poverty, a measure of the background indicates a place in (OECD) countries offer valuable availability of resources to purchase the top third of the table, mid insights into the impact of the goods and services to ensure blue denotes the middle third, recession on children and families. material well-being. The second and dark blue the bottom third. Using such data, three important ranking reports on the schooling While some macroeconomic rankings have been constructed: and employment status of young indicators in most affluent the evolution of child poverty by adults, who have arguably been the countries show signs of recovery, country since 2008; the change in hardest hit during this period. And economic growth is slow and the rate of young people not in our third league table is somewhat unemployment remains education, employment or training innovative, employing data from abnormally high. The impact of (NEET); and individuals’ self- the Gallup World Poll to see what the recession on children, in perception of their living conditions. individuals themselves say about particular, will be felt long after Each of these league tables their experiences during these the recession itself is declared describes a different dimension of tumultuous economic times. to be over. I nnocenti R e p ort C a r d 1 2 7
S E C T I O N 2 T h e l e a g u e t a b l es League Table 1 Change in child poverty (anchored in 2008) Change Rank Country (2008–2012) 31.4 1 Chile -8.67 Chile 22.8 22.4 2 Poland -7.90 Poland 14.5 19.2 3 Australia -6.27 Australia 13.0 16.7 4 Slovakia -5.60 Slovakia 11.1 19.5 5 Switzerland -4.80 Switzerland 14.7 9.6 6 Norway -4.30 Norway 5.3 16.8 7 Republic of Korea -3.40 Republic of Korea 13.4 12.0 8 Finland -3.20 Finland 8.8 33.0 9 Turkey -2.76 Turkey 30.2 21.7 10 Japan -2.70 Japan 19.0 23.2 11 Canada -2.44 Canada 20.8 32.9 12 Romania -2.30 Romania 30.6 17.2 13 Belgium -0.80 Belgium 16.4 12.9 13 Sweden -0.80 Sweden 12.1 14.9 15 Austria -0.70 Austria 14.2 18.8 16 New Zealand -0.40 New Zealand 18.4 13.2 17 Czech Republic -0.40 Czech Republic 12.8 15.2 18 Germany -0.20 Germany 15.0 35.1 19 Israel 0.55 Israel 35.6 25.5 20 Bulgaria 0.60 Bulgaria 26.1 20.4 20 Malta 0.60 Malta 21.0 12.9 22 Netherlands 1.00 Netherlands 13.9 22.8 22 Portugal 1.00 Portugal 23.8 9.1 24 Denmark 1.10 Denmark 10.2 24.0 25 United Kingdom 1.60 United Kingdom 25.6 11.6 26 Slovenia 1.80 Slovenia 13.4 30.1 27 United States 2.06 United States 32.2 14.0 28 Cyprus 2.70 Cyprus 16.7 19.7 29 Hungary 2.90 Hungary 22.6 15.6 30 France 3.00 France 18.6 29.3 31 Mexico 5.00 Mexico 34.3 17.1 32 Estonia 5.10 Estonia 22.2 24.7 33 Italy 5.70 Italy 30.4 19.8 34 Luxembourg 6.50 Luxembourg 26.3 28.2 35 Spain 8.10 Spain 36.3 22.8 36 Lithuania 8.30 Lithuania 31.1 18.0 37 Ireland 10.60 Ireland 28.6 15.8 38 Croatia 11.80 Croatia 27.6 23.6 39 Latvia 14.60 Latvia 38.2 23.0 40 Greece 17.50 Greece 40.5 11.2 41 Iceland 20.40 Iceland 31.6 0 10 20 30 40 50 Child poverty rate 2008 2012 See data sources and notes on page 44. 8 I nnocenti R e p ort C a r d 1 2
S E C T I O N 2 T h e l e a g u e t a b l es A commonly used indicator of child Key findings: and three other states that have poverty is the proportion of those been hard hit by the recession: » The impact of the recession can Iceland, Ireland and Luxembourg. living below an established poverty be felt in more than half of the 41 line. League Table 1 ranks the In the five countries at the countries (and in most of the change in child poverty in 41 EU bottom of the table, child poverty highly populated countries) listed and/or OECD countries between rose by 10 to 20 points – an in League Table 1. In 23 2008 and 2012. This change is increase of over 50 per cent. countries, the income poverty of calculated by computing child children has increased since » In a remarkable group of poverty in 2008 using a poverty line 2008, with wide variations among 18 countries, families and fixed at 60 per cent of median countries (from 0.55 percentage governments found some income. Using the same poverty line points in Israel to 20.40 way to cope with the worst in 2012, adjusted for inflation, the percentage points in Iceland). consequences of the recession rate is computed and the difference and saw their child poverty in the two rates is shown. A positive » The largest increase in child numbers reduced. This is the number indicates an increase in poverty has been in southern case in Chile, Finland, Norway, child poverty. Additional European countries – Greece, Poland and Slovakia, all of which explanations of these trends are Italy and Spain – as well as in reduced poverty levels by some provided in Section 3. Croatia, the three Baltic States 30 per cent. » The number of children entering into poverty during the recession Interpreting the data – League Table 1 is 2.6 million higher than the number that have been able to escape it since 2008 (6.6 million, versus 4 million). Around 76.5 million children live in poverty in the 41 most affluent countries. » In a surprisingly high number of cases, average comparisons hide Poverty in affluent countries is usually measured using a relative the scale of the situation. In over poverty line defined at either 50 per cent or 60 per cent of median half of the countries, more than annual income. Using this approach, changes in poverty over time one child in five lives in poverty. reflect changes in income and changes in the distribution of income. Greece, Latvia and Spain have This report, however, uses a fixed reference point, anchored to the child poverty of above 36 per relative poverty line in 2008, as a benchmark against which to cent. In the United States, child assess the absolute change in child poverty over time. This measure poverty is 32 per cent, and in is particularly useful for assessing impacts of the recession, when Italy it is 30 per cent. incomes of the entire population may be changing, and when individuals compare their income to that of their neighbours, as well as to their own circumstances before the crisis. Using a relative poverty line each year obscures the impact on poverty of the overall decline in median income. In the United Kingdom, for example, relative child poverty decreased from 24 per cent in 2008 to 18.6 per cent in 2012 due to a sharp decline in median income and the subsequent lowering of the relative poverty line. Using the anchored indicator, it actually increased from 24.0 per cent to 25.6 per cent from the start of the recession. I nnocenti R e p ort C a r d 1 2 9
S E C T I O N 2 T h e l e a g u e t a b l es League Table 2 Youth aged 15 to 24 not in education, employment or training (NEET), percentage Change Rank Country (2008–2013) 37.0 1 Turkey -11.5 Turkey 25.5 8.4 2 Germany -2.1 Germany 6.3 8.5 3 Japan -1.5 Japan 6.9 6.2 4 Luxembourg -1.2 Luxembourg 5.0 21.5 5 Mexico -0.4 Mexico 21.1 7.8 6 Sweden -0.3 Sweden 7.5 7.1 7 Austria 0.0 Austria 7.1 9.6 7 Canada 0.0 Canada 9.6 12.9 9 New Zealand 0.8 New Zealand 13.7 6.3 10 Switzerland 0.8 Switzerland 7.1 29.8 11 Israel 0.9 Israel 30.7 10.2 12 France 1.0 France 11.2 4.5 12 Iceland 1.0 Iceland 5.5 14.9 14 Ireland 1.2 Ireland 16.1 11.8 14 Latvia 1.2 Latvia 13.0 14.6 14 Republic of Korea 1.2 Republic of Korea 15.8 12.1 14 United Kingdom 1.2 United Kingdom 13.3 19.0 18 Chile 1.5 Chile 20.5 7.8 18 Finland 1.5 Finland 9.3 4.1 18 Norway 1.5 Norway 5.6 4.3 21 Denmark 1.7 Denmark 6.0 8.3 21 Malta 1.7 Malta 10.0 3.4 21 Netherlands 1.7 Netherlands 5.1 9.9 24 Australia 2.3 Australia 12.2 8.8 25 Lithuania 2.3 Lithuania 11.1 6.7 26 Czech Republic 2.4 Czech Republic 9.1 10.1 27 Belgium 2.6 Belgium 12.7 8.7 27 Estonia 2.6 Estonia 11.3 11.1 27 Slovakia 2.6 Slovakia 13.7 6.5 30 Slovenia 2.7 Slovenia 9.2 12.0 31 United States 3.0 United States 15.0 9.0 32 Poland 3.2 Poland 12.2 11.5 33 Hungary 3.9 Hungary 15.4 10.3 33 Portugal 3.9 Portugal 14.2 17.4 35 Bulgaria 4.2 Bulgaria 21.6 14.3 36 Spain 4.3 Spain 18.6 16.6 37 Italy 5.6 Italy 22.2 11.6 37 Romania 5.6 Romania 17.2 10.1 39 Croatia 8.5 Croatia 18.6 11.7 40 Greece 8.9 Greece 20.6 9.7 41 Cyprus 9.0 Cyprus 18.7 0 10 20 30 40 NEET rate (%) 2008 2013 See data sources and notes on page 44. 1 0 I nnocenti R e p ort C a r d 1 2
S E C T I O N 2 T h e l e a g u e t a b l es The NEET rate is the percentage of » Of the OECD countries that are » In countries such as Croatia and young people aged 15 to 24 who not in the European Union, the Greece, the deterioration in the are not participating in education, United States saw the largest circumstances of youth went employment or training. League increase in the NEET rate, hand in hand with an increase in Table 2 shows the NEET ranking of followed by Australia. child poverty, but there does not the 41 countries between 2008 appear to be a strong relationship and 2013. » Across all the countries, the between the two. Iceland sharpest NEET rate decrease was mitigated a rise in the NEET rate Key findings: in Turkey. Even so, that country despite a dramatic increase in » The recession hit young people retained the highest rate in the child poverty, while Romania saw extremely hard, with the NEET comparison: one young person in the NEET rate rise even as child rate rising dramatically in most four was NEET in 2013. Similarly poverty fell. EU countries. The largest in Mexico, though the NEET rate absolute increases were in has remained stable, one young Croatia, Cyprus, Greece, Italy person in five was NEET. and Romania, all with relative » Generally speaking, young people changes of around 30 per cent have suffered more in countries or higher. that have seen a greater decline » Across the EU, 7.5 million young in economic output. The two people (almost the entire notable exceptions are population of Switzerland) were Luxembourg (where the NEET NEET in 2013, nearly a million rate fell during a specific period more than in 2008. In Italy alone, of economic turbulence) and more than a million young Poland (where the NEET rate people aged 15–24 were neither increased, despite sustained studying nor working in 2013. economic growth). Interpreting the data – League Table 2 High NEET rates suggest an interrupted transition from school to work, or from school to further education, with long-term individual and societal costs. Increases in the NEET rate reflect the recession’s impact on a generation of young people; the kind of productive adulthood their parents took for granted is slipping away. I nnocenti R e p ort C a r d 1 2 1 1
S E C T I O N 2 T h e l e a g u e t a b l es League Table 3 How people say their lives have changed What people say about their living situation when asked... Country rankings based on change 2007–2013, Gallup World Poll. Figures in columns 1 to 4 show the relative position of each country in relation to the rest, and column 5 indicates the number of these indicators that had worsened in each country between 2007 and 2013. Direction of Countries ranked based on change 2007–2013 Recent Impact change 1 Have there been times in the past 12 months when you 2 Did you experience stress today? 3 Overall satisfaction with life? 4 Do most children in (country) have 5 Number of indicators worsening 6 ! = >2 indicators worsened Country did not have enough the opportunity 2007–2013 2011–2013 money to buy food to learn and grow that you or your family every day, or not? needed? Germany 4 9 3 6 0 Switzerland 3 12 8 11 1 Israel 4 29 6 2 1 ! Slovakia 26 13 3 4 2 Chile 1 32 1 14 1 Iceland 18 16 3 11 2 Australia 13 6 15 15 1 Austria 4 16 8 21 2 Japan 8 7 27 8 1 Bulgaria 1 n.a. 11 29 1 Latvia 28 15 7 5 2 Sweden 4 11 10 34 2 Denmark 8 9 28 15 1 Mexico 23 8 2 28 2 Lithuania 29 4 28 1 2 Republic of Korea 32 2 12 17 1 ! Norway 16 21 15 11 2 Czech Republic 8 25 12 19 1 France 26 5 15 19 1 Malta 20 25 15 8 2 Poland 18 20 28 3 3 United Kingdom 8 25 15 21 2 ! Belgium 13 18 24 17 3 Italy 13 21 36 8 3 Luxembourg 16 25 15 26 3 ! New Zealand 23 1 31 31 3 Canada 8 32 15 34 2 Hungary 41 18 24 6 3 Estonia 35 13 15 36 3 ! Croatia 29 n.a. 15 33 2 Netherlands 29 30 24 21 4 ! Romania 32 3 33 37 3 Slovenia 20 34 12 39 3 Finland 20 34 31 21 4 United States 37 21 33 21 4 ! Portugal 35 21 35 31 4 ! Spain 23 30 40 38 4 ! Ireland 32 36 38 30 4 ! Turkey 40 38 37 27 4 ! Cyprus 38 37 38 40 4 ! Greece 39 39 41 41 4 ! See data sources and notes on page 44 1 2 I nnocenti R e p ort C a r d 1 2
S E C T I O N 2 T h e l e a g u e t a b l es Another way of looking at the impact » In 29 of the 41 countries, the » Some of the trends indicate that of the Great Recession is simply to survey shows an increase in the dramatic societal changes are ask people about their experiences percentage of respondents who under way. In Greece, the share and perceptions. The Gallup World reported not having enough money of respondents saying they Poll does that every year, using a to buy food for themselves and “experienced stress today” representative sample of 1,000 their family. Again in 29 countries, jumped from 49 per cent in 2006 respondents in each country. The the stress indicator increased. In to 74 per cent in 2013. In the four questions in League Table 3 almost half of the countries, overall United States, the share of come from those polls. life satisfaction decreased. And in respondents that have 21 of the 41 countries, fewer experienced not having enough Key findings: respondents agreed with the money to buy food doubled, from » Beyond income and statement that children have the 10 per cent to 20 per cent. The employment levels, the opportunity to learn and grow. share of respondents who think recession affected a number children have an opportunity to of other dimensions of » In terms of its impact on personal learn and grow dropped by people’s lives. In 18 of the 41 experiences and perceptions, the between 10 and 20 percentage countries, three or more of recession is certainly not over. In points in five countries: these indicators reveal rising 13 countries, negative responses Cyprus, Greece, Slovenia, Spain feelings of insecurity and to three or four questions were still and Romania. stress from 2007 to 2013. The rising between 2011 and 2013, Summary most severely affected particularly in countries such as countries are clustered at the Cyprus, Greece, Ireland, Israel, the The overall evidence from our three bottom of the table. Netherlands, Spain and Turkey. league tables paints a vivid picture of how children and families have fared during the Great Recession. Although each league table Interpreting the data – League Table 3 provides somewhat different dimensions of well-being, countries like Croatia, Greece and Spain are Countries are ranked based on their average score across the four consistently placed in the bottom indicators, each of which measures how responses changed third across all dimensions, between 2007 and 2013. The highest number indicates the sharpest highlighting how badly they have change. Column 5 indicates how many of the responses to the four been hit by the recession. On the were negative over the full period. Note that these data are collected other hand, some relatively wealthy in a different way from those reported in official statistics and should countries (such as Canada, Finland, be interpreted with care when it comes to individual data points.i the Netherlands and the United States) have seen only small Due to data availability, the numbers in the table refer to the increases – or even declines – in population in general, not to families with children. However, for the child poverty and yet rank in the question on not having enough money to buy food, it was possible bottom third of the Gallup league to disaggregate respondents living in families with children for a table, suggesting that monetary subset of 31 countries. In the 10 countries where responses changed poverty alone does not tell the the most, the increase was even higher in families with children (in whole story of the well-being of all but one country). families during this period. The next i For a more in-depth exploration of the Gallup World Poll, as well as a sections of the report provide more validation exercise where Gallup World Poll indicators are compared to details behind these aggregate corresponding indicators from other established data sources, see: numbers, in order to help us Holmqvist, G. and L. Natali, ‘Exploring the Late Impact of the Financial Crisis using Gallup World Poll Data: A note’, Innocenti Working Paper 2014-14, understand who suffered most and UNICEF Office of Research, Florence, 2014. how countries responded. I nnocenti R e p ort C a r d 1 2 1 3
SECTION 3 How a financial crisis turned into a crisis for children Box 1 Measuring the exposure to the Great Recession Bearing in mind that the recession was different in each country, we have separated the countries into three groups, in order to assess their exposure to the crisis: most, moderately and least affected.i Most affected: a) Countries that are supported by International Monetary Fund (IMF)/EU/European Central Bank programmes and that promptly implemented fiscal adjustments: Estonia, Hungary, Iceland, Latvia and Lithuania. b) Countries with evident fiscal This section presents arguments problems that experienced market pressure (with a Credit Default and data that show how the global Swap spread higher than 500 in 2012): Croatia, Cyprus, Greece, financial shock and ensuing Ireland, Italy, Portugal and Spain. recession turned into a crisis for children. It reveals a strong Moderately affected: Countries that are highly indebted (more than correlation between the extent to 60 per cent of Gross Domestic Product (GDP)) or that suffered a which the recession ravaged large debt increase (more than the average): Austria, Belgium, national economies and the decline Canada, Finland, France, Germany, Israel, Japan, Malta, the in child well-being since 2008. In Netherlands, New Zealand, Romania, Slovakia, Slovenia, the United countries where the Great Kingdom and the United States. Recession hit hardest, children are Least affected: Countries least affected by the crisis:i i Australia, suffering the most and will bear the Bulgaria, Chile, Czech Republic, Denmark, Luxembourg, Mexico, consequences the longest. Below, a Norway, Poland, Republic of Korea, Sweden, Switzerland and Turkey. conceptual framework traces the i paths that increased the risks to For a more extensive explanation of the rationale behind this classification see: Natali, L., B. Martorano, S. Handa, G. Holmqvist and children and weakened the ability of Y. Chzhen, ‘Trends in Child Well-being in EU Countries during the Great families and states to mitigate those Recession: A cross-country comparative perspective’, Innocenti Working risks. The variables triggering the Paper 2014-10, UNICEF Office of Research, Florence, 2014. risks are numerous and diverse in ii Although Luxembourg and Mexico suffered more than other countries intensity and duration. Two factors during the recent economic crisis, they are included in the least affected group because a) they did not come under intense market pressure and prove particularly important for b) debt levels were lower than 60 per cent of GDP. More detail about households with children: the these two countries is reported in Natali et al. ‘Trends in Child Well-being position of parents in the labour in EU Countries during the Great Recession’. market and the depleted capacity of states to protect families. 1 4 I n n o c e n t i R e p o r t C a r d 1 2
S E C T I O N 3 H o w a f in a nci a l c r isis t u r ne d into a c r isis f o r chi l d r en Conceptual framework: How did the financial crisis turn into a crisis for children? Global financial crisis sovereign debt, economic crisis The crisis originated in the banking and housing sectors in developed countries and rapidly spread to other parts of the world. Although it Policies to contain the started as a financial crisis, it quickly evolved into an economic crisis, and negative consequences of in several European countries took the form of a sovereign debt crisis. the macroeconomic shock In the majority of the cases monetary policy was Transmission channels accommodating but inadequate, since policy Labour market: The decrease in demand for goods and services led to a interest rates were close to reduction in jobs and a tightening of labour conditions, provoking a drop zero. Many countries in household income. depreciated their national Financial market: Loss in private wealth due to asset deterioration and currencies to counter the restricted access to credit. drop in international demand. Public sector channel: Rapid deterioration of public finances prompted However, in the majority of aggressive austerity programmes and diverse responses in the form of cases the only tool available higher taxes and/or lower spending on public services. to policymakers was fiscal Policy responses policy (e.g. Eurozone). Governments also implemented active and Household impact passive labour market policies. Reduced income due to Reduced consumption unemployment, increased Stress and domestic violence taxes and reduced transfers Social protection Lack of nurture and care system responses: Family asset depletion Social exclusion Deterioration in access to Automatic stabilizers, and quality of services such as unemployment insurance and minimum income. Direct impact on children and youth Discretionary policies, Material deprivation Mental health such as cash payments in the early period and Nutrition/food security Protection cuts in public spending Human capital investment Employment opportunities with different priorities 1. Health in the second period. 2. Education Fertility Source: Natali et al. ‘Trends in Child Well-being in EU Countries during the Great Recession’. Trapped in the cycle of poverty in front of friends and classmates. Poverty is a self-reinforcing cycle. Children rarely manage to sidestep They are consciously or A child with unemployed parents the stress and suffering of parents unconsciously affected by changes may do less well at school. Doing enduring unemployment or a in their diets, the elimination of less well at school may bring significant reduction in income. sports, music or other activities, or more stress at home. And so on. They experience downturns in a lack of funds to buy school The longer a child is locked in the family fortunes in both subtle and materials. Extreme circumstances cycle, the fewer the possibilities painfully evident ways. They suffer may force their families from their of escape. minor slights and major humiliations homes or even their countries. I nnocenti Re p o r t C a r d 1 2 1 5
S E C T I O N 3 H o w a f in a nci a l c r isis t u r ne d into a c r isis f o r chi l d r en Difficulty making ends meet Figure 1 Median income in European households with children (per exposure) Figure 1 and Figure 2 show the evolution of median income in 120 European households1 with Median income – hhs children, and the percentage of 110 those households that are having with children great difficulty in making ends 100 meet. The households are categorized according to the 90 exposure of their national economies to the recession (see 80 2007 2008 2009 2010 2011 2012 Box 1). The first case shows a Year group of 14 (out of 30) countries Most affected Moderately affected Least affected whose median income decreased, Source: Eurostat. Median income is expressed in 2007 prices, national currency. with sharp falls in Ireland, Spain and Note: No data for Cyprus, Croatia, Slovakia and Turkey. the United Kingdom (all around 15 per cent), and even larger drops Figure 2 European households with children making ends meet with great in Greece, Iceland and Latvia (all difficulty (per exposure) 24 per cent or higher). 200 Hhs with children making ends These trends are confirmed in meet with great difficulty 180 Figure 3, which reports how families say their circumstances 160 have changed. The proportion of 140 households stating that their 120 situation is ‘very difficult’ has risen on average in all categories, with 100 the greatest intensity in the 80 countries most affected.2 2006 2008 2010 2012 Year Children with workless parents Most affected Moderately affected Least affected Labour market exclusion and cuts Source: Eurostat. in social transfers appear to be the Note: No data for Turkey and Croatia; Switzerland (2006); Ireland (2012). underlying factors driving these changes. From 2008 to 2012, the Figure 3 Proportion of households reporting that their feeling about proportion of households where all household income is ‘very difficult’ (per exposure) adults were workless increased 120 most in those countries with the Very difficult to live on highest incidence of child poverty.3 household income 110 The results of our own research show that the proportion of children 100 up to age 17 living in jobless households nearly doubled in 90 Portugal and Spain, and nearly tripled in Denmark. The largest 80 absolute increases (above 5 per 2007 2008 2009 2010 2011 2012 2013 Year cent) were in Bulgaria, Greece, Ireland and Spain. Most affected Moderately affected Least affected Source: Gallup World Poll. Note: Out of the 41 countries covered in this report, the following are not included in this figure: Austria, Cyprus, Finland, Iceland, Ireland, Luxembourg, Malta, Norway, Portugal, Slovakia, Slovenia and Switzerland. 1 6 I nnocenti Re p o r t C a r d 1 2
S E C T I O N 3 H o w a f in a nci a l c r isis t u r ne d into a c r isis f o r chi l d r en Figure 4 shows these trends by the Figure 4 Children in jobless households (per exposure) exposure of the different groups to Children 0-17 living in jobless the recession. The implications of 180 this rise in unemployment were highlighted by the OECD in a recent 160 households report: “With more than one in eight 140 working-age individuals in most countries now living in workless 120 households, the success of 100 redistribution measures and active social policies is gauged to a large 2006 2008 2010 2012 Year extent on whether they can improve economic security for families Most affected Moderately affected Least affected without any income from work.”4 Source: Eurostat. Note: No data for Iceland, Norway, Switzerland and Sweden. The working poor and other vulnerable groups Households with two children have migrant or lone-parent families – and countries, the proportion of spending needs that are, on the risks multiply. Having a child or households with children unable to average, 40 per cent higher than children in a household increases face unexpected financial expenses comparable families without the risk of ‘working poverty’ has increased by almost 60 per children.5 As a consequence, (working, but below the poverty line) cent, on average. For many households with children are much from 7 per cent to 11 per cent. For households, their toehold on the more likely to be poor. Add in other lone parents, this almost doubles lower rungs of middle-class life is layers of vulnerability – such as (20.2 per cent).6 In the most affected increasingly fragile (see Box 2). Figure 5 Change in severe child material deprivation in Europe (2008–2012) 50 40 30 Per cent 20 10 0 -10 Poland Germany Switzerland Austria Portugal Romania Slovakia Norway Finland Sweden Czech Republic France Slovenia Luxembourg Netherlands Denmark Belgium Spain Iceland Estonia Lithuania Ireland Bulgaria United Kingdom Malta Italy Latvia Cyprus Greece Hungary Change (2008–2012) 2008 2012 Source: Eurostat. Note: No data for Croatia. I nnocenti Re p o r t C a r d 1 2 1 7
S E C T I O N 3 H o w a f in a nci a l c r isis t u r ne d into a c r isis f o r chi l d r en Box 2 Europe: Less income, less protection, more material deprivation The overall picture of material well-being of families cent) in 2012 lived in three countries: Italy (16 per is broadly captured by the ‘severe material cent), Romania (14 per cent) and the United Kingdom deprivation’ indicator. Children (0–17) are considered (14 per cent). to be severely materially deprived when the Provisional estimates for 2013 show that some household in which they live cannot afford at least countries – notably Estonia and Latvia – started on four of the following nine items: 1) to pay rent, the road to recovery in 2012. However, there are still mortgage or utilities; 2) to keep the home adequately reasons to be concerned. The deterioration in the warm; 3) to face unexpected expenses; 4) to eat severe material deprivation indicator is mainly related meat or proteins regularly; 5) to take a holiday; 6) to to the first five components on the list, those most have a television; 7) to have a washing machine; sensitive to household income. The last four 8) to have a car; 9) to have a telephone. In contrast deprivation items – the so-called ‘durables’ – are to purely monetary measures of the financial likely to worsen in the latter phase, as the recession resources of households, this indicator shows the continues and families are unable to repair or replace satisfaction of material fundamental needs.i their assets.i i i In 2008, there was an abrupt break in the positive Material deprivation and income poverty can be trend of previous years. In the first phase of the combined for a more complete story of the impact of recession (2008–2010), the proportion of children the recession on households with children. Figure 6 with severe material deprivation increased sharply in shows that in Greece and Iceland – the two countries the countries most affected by the Great Recession, at the bottom of the child poverty league table – not and was relatively stable in the remaining countries. only has the absolute number of poor children risen After 2010, deprivation worsened, on average, dramatically, but it has done so in the context of everywhere. Two-thirds of the European countries in increased severe material deprivation. The proportion this analysis saw material deprivation worsen after of children who are income poor and severely 2008 (see Figure 5), with the largest absolute deprived has tripled in Greece and quadrupled in increases in Cyprus, Greece and Hungary. In relative Iceland. terms, the severe child material deprivation rate doubled in Greece and tripled in Iceland, albeit from a very low base. In the group of hard-hit countries, the proportion of severely deprived children nearly doubled in four years. i de Neubourg, C., J. Bradshaw, Y. Chzhen, G. Main, B. The magnitude of this change is worthy of note. The Martorano and L. Menchini, ‘Child Deprivation, Multidimensional Poverty and Monetary Poverty in absolute number of children living in severe material Europe’, Innocenti Working Paper No. 2012-02, UNICEF deprivation in the 30 European countries analysed Innocenti Research Centre, Florence, 2012, p. 1. was 11.1 million in 2012 –1.6 million more than in ii There was a break in 2012 in the United Kingdom 2008. This trend is the result of a net effect that series: the figures should be interpreted with caution. includes substantial decreases (more than 300,000 iii McKnight, A., ‘Measuring Material Deprivation over fewer deprived children in Germany and Poland) and the Economic Crisis: Does a re-evaluation of “need” affect measures of material deprivation?’, Gini Policy unprecedented increases in four countries (Greece, Paper 4, Centre for Analysis of Social Exclusion, London Italy, Spain and the United Kingdom).i i Almost half of School of Economics, 2013. www.gini-research.org/ the severely materially deprived children (44 per system/uploads/553/original/PP4.pdf?1380631527 1 8 I nnocenti Re p o r t C a r d 1 2
S E C T I O N 3 H o w a f in a nci a l c r isis t u r ne d into a c r isis f o r chi l d r en Food, shelter and nurture Figure 6 Child poverty and severe material deprivation in Greece and Iceland (2008 and 2012) A shortfall in family income is particularly hard on children. The Greece 2008 Greece 2012 food they eat, where they live, the time they spend with parents and friends, and the public services to which they are entitled – these are important factors that determine their well-being. Access to food Per cent Daily nutritional intake and the Total poor 23.0 Poor only 16.9 consumption of nutritious food, such Total deprived 10.4 as fish and vegetables, declined in Deprived only 4.3 the most affected countries during Poor and deprived 6.2 the recession. After 2008, the Per cent Neither poor nor 72.7 percentage of households with deprived Total poor 40.5 Poor only 22.6 children unable to afford a meal with Total deprived 20.9 meat, chicken, fish (or a vegetable Deprived only 2.9 equivalent) every second day more Poor and deprived 17.9 than doubled in Estonia, Greece, Neither poor nor 56.6 Iceland and Italy, reaching 10 per deprived cent, 18 per cent, 6 per cent and 16 per cent, respectively, in 2012. Iceland 2008 Iceland 2012 UNICEF National Committees report that diverse public and private initiatives have sprung up across Europe to combat the increasing Per cent problem of malnutrition, including Total poor 11.2 school meal programmes, food Poor only 10.7 banks and meal vouchers. Total deprived 0.9 Furthermore, some 9 million poor Deprived only 0.4 women and children in the United Poor and deprived 0.6 States receive federal food Neither poor nor 88.4 Per cent deprived assistance annually,7 with more than Total poor 31.6 47 million Americans living in Poor only 29.1 households that have difficulty in Total deprived 3.1 Deprived only 0.6 putting food on the table.8 Between 2008 and 2013, the use of food Poor and deprived 2.6 banks by families in Canada Neither poor nor 67.8 deprived increased by 23 per cent.9 Source: EU-SILC. Housing conditions Evictions, mortgage defaults and mortgages were in negative equity 2008. The recession has also foreclosures have been a tragic in 2013. In Greece, at least 60,000 affected savings and economic reality in a number of countries hit by house owners faced immediate opportunities throughout the the recession. In Spain, 244,000 danger of eviction in 2013.10 In the country.11 evictions were registered from 2008 United States, where the financial to 2012 by the European Federation The cost of housing may be a crisis began, more than 13 million of Public, Cooperative & Social challenge for many people long foreclosures have been filed since Housing. In Ireland, 400,000 before evictions and foreclosures I nnocenti Re p o r t C a r d 1 2 1 9
S E C T I O N 3 H o w a f in a nci a l c r isis t u r ne d into a c r isis f o r chi l d r en take place. Rent, mortgage of being contacted by child in the income chain. In the end, how payments and other housing costs protective services.16 the impacts are spread depends less are generally the largest on the depth of the recession and Essential services expenditure in a family budget. The more on the existing economic As family incomes decrease and proportion of children in families structure and social safety nets and, contextual conditions deteriorate, so overburdened by housing costs has most importantly, on policy risk in children’s lives increases. And increased in 19 European countries responses. the capacity of governments and since 2008.12 In some cases, lack of public institutions to protect them To assess whether the impact of the access to affordable housing leads has not improved accordingly in recession did fall disproportionately to homelessness of children and critical areas such as health and on children, the situation of average other extreme consequences.13 education. In European countries children was compared to that of Parental time and care that have been moderately and the poorest children in the income The quantity and quality of time that severely affected by the recession, distribution chain. The impact on parents spend with their children is the proportion of young adults with children in particularly vulnerable affected by income reductions and unmet health needs has increased groups, such as migrants, lone- contextual stress. Loss of parental significantly since 2008. More than a parent families and workless time is more acute in poorer third of OECD countries reduced households, was also assessed, as families, contrary to conventional public education spending after were the impacts on children wisdom.14 Long working hours, less 2010, and several more froze it.17 compared to the impact on other help at home and a lack of leisure These cuts will have both short-term traditionally vulnerable social groups, activities can have a debilitating and long-term impacts. such as the elderly, as well as on effect on family relationships, society in general. Have children suffered most? affecting children in critical periods How does an economic crisis affect Impacts on the poorest of intellectual and emotional development. For separated or inequality? Inequality can lessen if Since 2008, the position of the divorced couples in Italy, for better-off households lose income, poorest children has actually instance, income constraints caused while poorer sectors of society worsened in most of the countries by the recession add to the remain protected by existing public studied. The poverty gap indicator pressure on already stressed policies and safety nets. But (see Figure 7) captures the depth of relationships.15 Trends in violence inequality can worsen if the weight this phenomenon by measuring the against children also feel an impact: of the recession falls on the weakest distance from the poverty line to the in the United States, the drop in consumer confidence since 2007 Figure 7 Change in poverty gap vs change in headcount (2008–2012) has been associated with a Change poverty gap= 1.0352 + .22455 change headcount considerable increase in the GR incidence of mothers hitting their 10 Change in poverty gap (anchored) ES children frequently. We find that the DK HU large decline in consumer 5 SK CY AT SE NL IT IS LV confidence during the Great BE PT PL CZ SI Recession, as measured by the 0 CH FR EE LU IE BG FI Consumer Sentiment Index, has NO DE UK LT been associated with worse -5 MT parenting behaviour. In particular, RO lower levels of consumer -10 confidence are associated with -10 0 10 20 increased levels of high-frequency Change in headcount (anchored) spanking, a parenting behaviour that Fitted values is associated with greater likelihood R-squared=0.1426 Source: Eurostat for the anchored headcount; EU-SILC for the anchored poverty gap. 2 0 I nnocenti Re p o r t C a r d 1 2
S E C T I O N 3 H o w a f in a nci a l c r isis t u r ne d into a c r isis f o r chi l d r en Box 3 The crisis in Greece through a child’s eyes The indicators in this Report Card do not fully capture stopped going on holiday trips (see Figure 8). how children’s views of their lives have changed. To Around one student in ten had to stop tutoring gain a deeper insight into the perspectives of sessions or had to move to another area or to a children, we commissioned early analysis of the relative’s house, and 3 per cent switched from most recent Health Behaviour in School-aged private to public schools. Children (HBSC) survey (2014) on the behaviour of The children surveyed were perceptive about other 11-, 13- and 15-year-old students in Greece, one of consequences of the recession, such as increased the countries most affected by the recession. The stress on parents from income cuts or job losses. results are instructive. These events affect family relationships, as seen in Despite the best efforts of families to insulate their the large share (as high as 27 per cent) of those offspring from the worst consequences of the reporting tension and fights within their families. The recession, school children in Greece revealed that proportion of children reporting high satisfaction with they are highly aware of problems that affect their relationships within the family dropped by 3 per cent immediate context. Those reporting that their between 2006 and 2014. As for their overall life family’s economic situation is ‘not well off’ doubled satisfaction, the share of children reporting a high from 7.2 per cent in 2006 to 14.5 per cent in 2014. quality of life dropped by almost 10 per cent over the An increasing share of them said that the economic same period. situation of the area where they live had worsened (from 22.2 per cent to 29.5 per cent in the same i period).i In 2014, more than one child in five reported Kokkevi, A., M. Stavrou, E. Kanavou and A. Fotiou. ‘The Repercussions of the Economic Recession in that at least one parent had lost their job, 5 per cent Greece on Adolescents and their Families’, Innocenti said their family could not afford to buy food, and Working Paper No. 2014-07, UNICEF Office of almost 30 per cent reported that the family had Research, Florence, 2014. Figure 8 Children’s self-reporting of the effects of the crisis in Greece at least one parent lost job 21.3 inability to buy food 5.4 no vacation/travelling 27.9 stopped tutoring 10.5 changed school 3 moved to other area 8.2 family tension 27.3 0 5 10 15 20 25 30 Per cent Source: 2014 HBSC survey. I nnocenti Re p o r t C a r d 1 2 2 1
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