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Lindsay Mitchell

Family Structure and Child Poverty: What is the evidence telling us?

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On the back of last month’s budget, opposition politicians, academics and other advocates  once again expressed outrage at the incidence of child poverty in New Zealand. The culprits routinely blamed are unemployment, high housing costs and insufficient benefit payments. But there is another factor – probably the most important – that is constantly overlooked. That is the rapid change in family structure.

In 1961 New Zealand experienced peak fertility. The average number of births per woman was 4.3. There were more babies born that year than ever before or ever since. Today mothers are having only two children on average; they are better educated; their employment rates are far higher than previously and they are having their children later. All of this should point to less child poverty.

Yet the reverse is true. There is now far more relative child poverty than there was in the 1960s, when only 5% of families with children were in the two lowest incomes bands compared to 25% today.

So what changed? During the 1960s, 95 percent of children were born to and supported by married couples. By 2015 that proportion had fallen to only 53%; for Maori, who have the highest child poverty rate, only 21% of children are born to married parents.

The response to these statistics is generally met with the objection, “…just because people aren’t married, it doesn’t mean they aren’t living together in stable relationships.” Well, let’s explore that.

A host of statistics from countries similar to NZ – the UK, the USA and Australia – show that de facto relationships are far less stable than marriages and over time becoming even less stable. By the time a child is aged 5, the likelihood that his cohabiting parents will have separated is 4-6 times greater than if they are married. The dissolution of relationships leads to sole parenting, which in turn leads to child poverty. According to Household Incomes in New Zealand –  the official source of child poverty data – sole parent families are the poorest families in NZ.

Sole parent families can also be formed by births to single mothers. In 2015, 5 percent of registered births had no father details. A further 15% had fathers with different residential addresses to the mothers. One in five children is not living with their father.  This is reflected in benefit data showing, in the same year, 17.5 percent of babies would be dependent on welfare by year-end, most commonly Sole Parent Support.

The poverty rate for sole parent families is 62 percent versus 15 percent in two parent families. It is unavoidable that a country with a large number of sole parent families will also have a high incidence of child poverty.

Incomes in single parent households cluster around the poverty threshold. Incomes in de facto households are higher but still below those in married households. While cohabiting couples are generally younger (so could be expected to have lower incomes) many are also older and in blended or step-families with financial obligations to children from previous relationships.

The poorest children in NZ are in Maori and Pacific families. Their rates of sole parenting are considerably higher, though Maori are far more likely to rely on a benefit than Pacific sole parents who are often supported within their extended families.

While unemployment rates and housing costs play a role in child poverty, both are arguably less significant than family formation and stability. For instance, measured at the 2013 census, male Maori unemployment was half what it was in 1991, yet Maori child poverty rates have remained elevated. And while there is undoubtedly an Auckland housing crisis, across NZ as a whole, rents are affordable, especially with help from accommodation subsidies. The New Zealand Institute of Economic Research found, in 2014, that, “…the cost of renting has remained broadly stable relative to income over many decades.”

The elephant in the room in the child poverty debate is family malformation – or a lack of two committed married parents. Yet, if there is to be any political will to solve child poverty the issue has to be confronted. To continue to clamour for government to do more is a cop-out. The evidence that marriage is the best protector against child poverty is overwhelming and incontrovertible.

The link to Lindsay’s full report is HERE.