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REPORTS SHOW SUCCESSIVE GENERATIONS OF CHILDREN MAY BE 'LEARNING TO BE POOR'

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Children growing up in low income families may be 'learning to be poor' from an early age as diminished expectation...
Children growing up in low income families may be 'learning to be poor' from an early age as diminished expectations of what their parents can afford lead them to scale down their hopes and aspirations for the future.

The ways that children's experiences of poverty affect their future welfare are examined in two research reports published by the Joseph Rowntree Foundation. They consider how children respond to growing up in a low income family, and analyse the risks that high levels of relative poverty among today's children may carry for future generations.

Taken together, they highlight many of the pressing problems that must be tackled if the government's 20-year goal of overcoming child poverty - set earlier this month by the prime minister - is to be reached.

Poor children's attitudes to money

A study based on interviews with more than 400 children shows that those who live with a lone parent or in families claiming Income Support are more likely than other children to be frequently told that things they want are unaffordable. It found that:

Children living in households claiming Income Support (42 per cent) were five times more likely to think that their family income was inadequate than other children (8 per cent). Children in lone parent families (39 per cent) were four times more likely to believe it than children in two-parent families (9 per cent).

Children living in lone parent and Income Support families were more likely to have been involved in family discussions about money and spending. Two-thirds said they were often told that their family could not afford what they wanted, compared with less than half other children.

Asked which presents they would like if it was their birthday next week, the children in lone-parent and Income Support families listed items that were significantly less expensive on average than those identified by other children.

Children in lone-parent and Income Support families were less likely to receive regular pocket money than others. Although children in low income families were less likely to have part-time jobs, those who did worked for longer hours and lower rates of pay than other children.

Children in lone-parent or Income Support families had much lower expectations about their future careers than their peers. They were more likely than other youngsters to want jobs that required few qualifications and little training. And they were less likely to aspire to attaining professional qualifications or occupations.

Sue Middleton of the Centre for Research in Social Policy at Loughborough University, the study's co-author said: 'As children learn about their family's financial situation, so they form views of where they stand in relation to other families. Our research suggests that children from low income families are learning to expect and accept less from an early age and to find ways of covering up their disappointment.'

She added: 'It seems entirely possible that for some children it is earlylearning of this sort that reduces both their immediate expectations and their future aspirations. There is a real sense in which they are learning to be poor.'

Child poverty and its consequences

A study by researchers at the Centre for Economic Performance at the London School of Economics, shows how the number of children living in homes that are relatively poor is dramatically higher than 30 years ago. As many as one in three children (over 4.3 million) were living in households with less than half average income in 1995/96 compared with one in ten in 1968.

It also finds that spending by the poorest fifth of the population on toys, children's clothing, shoes and fresh fruit was no higher in real terms in 1995/96 than it was almost 30 years earlier. This evidence suggests that increasing inequality in expenditure has had a direct impact on the well-being of children and served to exclude them from the rising living standards of the prosperous majority.

Data from large-scale national surveys enables the researchers to calculate that a fifth of the rise in child poverty is attributable to an increase in the number of children living in lone-parent families. However, they find that a more important factor has been unemployment and the increasing chances that children find themselves in 'work poor' families where no adult has a paid job.

Using results from a long-term survey that has traced the development of children born in 1958 through to adulthood, the researchers demonstrate how social disadvantage during childhood has been linked to an increased risk of low earnings, unemployment and other adversity by the age of 33. Among family-based measures, poverty has been by far the most important force linking childhood development with later social and economic problems. Growing up in a lone-parent family has only been a significant factor when associated with family poverty.

Pursuing the links between poverty affecting one generation and the next, the study also finds that 33-year old parents in the survey who were, themselves, disadvantaged as children are more likely than other parents to have children who were performing poorly in school at an early age.

Stephen Machin, co-author of the report, said: 'Our study shows how the economic position of families strongly affects the present and future welfare of children. It suggests that today's high level of child poverty is likely to have continuing negative effects as the present generation of children in low income families grows up. Conversely, any measures that successfully address child poverty, especially by giving more households access to jobs, are likely to have wide-ranging, positive effects that go beyond improving the immediate welfare of children.'

Note to Editors

Small expectations: Learning to be poor? by Jules Shropshire and Sue Middleton and Child development and family income by Paul Gregg, Susan Harkness and Stephen Machin are published on behalf of the Joseph Rowntree Foundationby York Publishing Services, 64 Hallfield Road, Layerthorpe, York YO31 7ZX (01904 430033), price£10.95 each plus£2 p&p. Summaries of the findings from both reports can be found below.

March 1999 - Ref 389

Child poverty and its consequences

What is the effect of family poverty on children? This question is examined in a study by Paul Gregg, Susan Harkness and Stephen Machin. Using data from large-scale surveys, it looks at the changing numbers of children in different types of poor families, at how much is allocated to spending on children themselves and at how children's disadvantages affect them after they grow up. The study found:

A third of children (over 4.3 million) lived in households with below half average income in 1995/96, up from just 10 per cent in 1968.

Most poor children now live in workless households; thirty years ago over two-thirds of poor children had at least one working parent.

Two-thirds of children with lone parents are poor, compared with one-quarter of children with two parents. The relative disadvantage of children with one parent has risen since 1979, largely because the chance of the parent having a job has declined.

While child poverty (based on a fixed poverty line of half average income in 1995/96) fell sharply in the 1970s, it barely fell at all between 1979 and 1995/96, despite a substantial rise in general living standards. For the poorest fifth of the population, spending on toys, children's clothing, shoes and fresh fruit was no higher in real terms in 1995/96 than in 1968.

Young adults who as children suffered financial hardship, were in trouble with the law or played truant have significantly greater than average chances of earning lower wages, being unemployed, spending time in prison (men) or becoming a lone parent (women). These associations exist independently of socio-economic background or experiences in early childhood. They are only partly accounted for by lower educational attainment.

Parents who have themselves been disadvantaged in childhood are more likely to have children who do poorly early on at school.

Introduction

Studies examining large-scale data on the economic experiences of individuals and families have typically used parents or households rather than children as the units of analysis. Children have been seen by economists in particular as having an effect on the welfare of households rather than their own welfare being the focus of attention.

This study used two main surveys, the Family Expenditure Survey and the National Child Development Survey, to explore connections between rising income inequality and labour market inequality, changing family structures and child poverty. One strand of the work looks at trends in child poverty rates and income inequalities since the late 1960s. The second looks at the relationship between childhood disadvantage (an important element of which is child poverty) and subsequent economic and social outcomes among adults. The link between the two strands is the significant long-term impact likely from high child poverty rates, which are likely to extend to undesirable outcomes among adults, including a perpetuation of disadvantage through its being passed on to subsequent generations.

Trends in child poverty

Overall trend

Despite a fall in the number of families with children and declining family size, the number of children living in households with below half average income has risen rapidly over recent decades. In 1995/96 about one-third of all children - 4.3 million - were living in such households, compared with just 1.3 million in 1968. (These and other calculations in the study are based on 'equivalised' household incomes, that is adjusted for the number of members and ages of children.)

While the number of children living in relative poverty has thus more than tripled, this change has to be set alongside a general rise in living standards. More than half of children (55 per cent) in 1968 would have been defined as being in poverty on today's standard (that is, they lived in households with below half average 1995/96 income, adjusted for inflation). But the steep fall in this proportion to 36 per cent by 1979 was not sustained: 33 per cent remained below this income threshold in 1995/96. So poverty on this absolute level did not decline over a 16-year period in which general living standards rose by nearly one-third.

Which children are poor?

The rise in child poverty is closely linked to a growth in the number of children living in families without work. Between 1968 and 1995/96, the proportion of all children with no working parent rose from 2 to 10 per cent of those in two-parent families, and from 30 to 58 per cent of children of lone parents. Workless families accounted for over half (54 per cent) of all poor children in the mid-1990s, compared with under a third (31 per cent) in the late 1960s. Over the same period, the proportion of poor children who lived in lone-parent families rose from 19 per cent to 43 per cent (see Figure 1).

So what was the relative importance of growing family worklessness, compared with the growth in lone parenthood, over this period? One-fifth of the overall increase in child poverty can be attributed specifically to the rise in the proportion of children with lone parents, from 6 per cent to 22 per cent of all children. But a bigger factor has been the rising chance of either one- or two-parent families being out of work. This has been compounded by a growing incidence of poverty within each of the four categories of household in the figure, as defined by working and parental status.

Have children suffered more than average?

The research shows that not only have child poverty rates increased, but that poverty has risen faster among families with children than without them. In 1995/96, 28 per cent of households containing children were poor compared with 15 per cent of those without children. This poverty rate had risen by 21 percentage points since 1968 for those with children, as compared with a 10 percentage point rise for childless households. Lone parents have overtaken pensioners as the group with the lowest average income, and the income gap between pensioners and couples with children is closing. Moreover, while the overall distribution of household incomes has become more dispersed both for those with and without children, for the former there is a big concentration of very poor families relying on benefits, whereas for childless households the distribution is more even.

Expenditure on children

An alternative to measuring child poverty by income is to look at family spending patterns. This has the advantage of being a more direct indicator of whether children's needs are met, although it can be harder to measure it accurately. The available data show expenditure to be slightly more equally distributed than income across children's families, but the overall widening of inequality is confirmed. Very similar amounts are spent on children, on average, whether they live in one- or two-parent families, once employment status is taken into account. The biggest difference is seen not according to the number of parents but according to whether there is income from work. Moreover, the gap in spending on children whose parents are in or out of work has increased. Since 1968, average real spending in two-parent families without work has risen only slightly, and for non-working lone parents it has fallen.

But how much of this household spending is devoted to children themselves? The inequalities in overall expenditure are repeated in spending on toys, children's clothing, shoes and fresh fruit and vegetables. Moreover, there has been no real rise in spending on these items for the poorest fifth of the population over the past three decades. These findings suggest that increasing inequality in expenditure is having a direct impact on the living standards of children, and excluding the poorest from the rising material well-being of the majority.

Child development and adult economic and social outcomes

The second strand of the study showed that a number of economic and social disadvantages faced during childhood are strongly associated with the subsequent economic success or failure of young adults. Based on the interviews of cohorts participating in the National Child Development Study, the research examined characteristics at various points in the lives of people born in 1958. It looked at whether as children individuals suffered from 'family disadvantage' in the form of poverty, lone parenthood, having an unemployed father or having been taken into local authority care. It also looked at whether their behaviour by age 16 could be characterised as 'delinquent' in terms of having been involved with the police or having played truant from school. The effects of these childhood experiences were separated out from the impact of 'initial conditions' in people's lives, as defined for example by the educational levels of their parents and the cognitive abilities that they displayed at the age of seven.

The study found that those with disadvantaged or 'delinquent' backgrounds fare badly in terms of earnings and employment chances as young adults, even at the age of 33. Men are also more likely to have had a spell in prison and women are more likely to be lone parents, by the age of 23, if they have negative childhood experiences.

To what extent do these poor outcomes in adulthood arise from the fact that disadvantaged and 'delinquent' children get on average vastly inferior educational results? The study found that education was important as a 'transmission mechanism', but that it typically accounted for under half of the differences identified. The disadvantages identified had a significant impact above and beyond their effect on education.

Of the family-based measures of childhood disadvantage, poverty was found to be by far the most important force linking childhood development with subsequent social and economic outcomes. Being brought up in a lone-parent family, for example, does not seem to matter in the absence of family poverty.

Finally, the study demonstrated an intergenerational link in the cycle of family disadvantage. It looked at the tested cognitive ability, at an early age, of the children of the 1958 cohort. Where the parents had themselves grown up in socially disadvantaged situations, the average cognitive ability of children was lower. This suggests a potentially important cross-generational link that may well spill over to affect the subsequent economic fortunes of the children of disadvantaged individuals.

Conclusions

This study shows how the economic position of families strongly affects the present and future welfare of children. Whether a family is able to meet the material needs of its children depends more on whether it has income from work than directly on whether it has two parents. However, the much greater amount of time that lone parents spend on average out of work means that a higher proportion of them are unable to meet their children's needs as they grow up. Such economic disadvantages can lead to both economic and social difficulties in adulthood, and feed through to the next generation. So today's high level of child poverty is likely to have continuing negative effects as the present generation grows up. Conversely, any measures that successfully address child poverty, especially by giving more households access to jobs, are likely to have wide-ranging effects in the years ahead, that go beyond the improvement of the immediate welfare of poor children.

About the study

The study is based on an econometric study of large-scale micro-economic data sources.

How to get further information

The full report, Child development and family income by Paul Gregg, Susan Harkness and Stephen Machin, is published for the Foundation by YPS (ISBN 1 902633 06 7, price£10.95 plus£2 postage).

More detailed technical papers are available on request from the Centre for Economic Performance at the LSE. These are: P.Gregg, S. Harkness and S. Machin (1998) 'Poor kids: Trends in child poverty 1968-96', mimeo; and P.Gregg and S. Machin (1998) 'Childhood disadvantage and success or failure in the youth labour market', Discussion Paper 397.

March 1999 - Ref 379

The experiences and attitudes of children from low-income families towards money

Over one-third of British children are living in poverty. Yet little is known about the effect this has on their understanding of the economic world, their behaviour and beliefs, or their aspirations. This study describes the immediate effects of growing up in poor families drawing on evidence from the 'Small Fortunes' Survey of the lifestyles and living standards of children, undertaken by the Centre for Research in Social Policy at Loughborough University in 1995. The study shows that:

Children living in lone-parent families and families claiming Income Support had less experience of handling their own money than did other children: they were less likely to receive regular pocket money and were less likely to have part-time jobs.

Of the two-fifths of children who did have part-time jobs, those living in lone-parent and Income Support families worked for longer hours and for lower rates of pay than did other children.

Most children were never told about family income or spending; when they were, parents were more likely to discuss spending than income.

Family discussions of income and spending were more likely to occur in lone-parent families than two-parent families. Discussions of family income were also more likely in families claiming Income Support than in other families.

Two-thirds of children in lone-parent or Income Support families said they were frequently told their family could not afford what they wanted; less than half of other children said this.

The immediate effects of growing up in poverty were apparent in the children's beliefs, behaviour and aspirations:

- two-fifths of children living in Income Support and lone-parent families worried that their family did not have enough money to live on, compared with less than 10 per cent of other children;

- many children who lived in lone-parent families learned at a young age not to ask for things they wanted;

- career aspirations were much lower among youngsters living in Income Support and lone-parent families compared with children from non-Income Support or two-parent families.

Background

Despite the growth in the number of British children said to be living in poverty over the last 20 years, little is known about how children come to terms with poverty and the effects of poverty on their beliefs, behaviour and aspirations. More generally, we have only limited knowledge about how children learn about the economic world around them. Yet children's knowledge and experience of both the economic circumstances of their immediate family and of the wider economic world outside the family are likely to affect their own economic futures. The central question which the research seeks to answer is, do children learn to be poor?

Children's experience of handling their own money

Children of lone parents (16 per cent) and of parents on Income Support (21 per cent) were more likely to receive pocket money infrequently and only when their parents' budget allowed than were children living in two-parent (eight per cent) or non-Income Support families (seven per cent).

Experience of part-time work was less likely for children (over 11 years old) of lone parents or from families on Income Support than for other children. Approximately one-quarter (28 per cent) of children of lone parents were involved in paid work compared with two-fifths (41 per cent) of children in two-parent families. One-third of children from families claiming Income Support (32 per cent) had a part-time job compared with two-fifths of children in families not claiming Income Support (40 per cent).

Whilst less likely to have a part-time job, children from lone-parent or Income Support families who did work did so for longer hours and for lower rates of pay than other children. One-third of children in Income Support families and one-quarter of children in lone-parent families did more than seven hours paid work per week compared with just one-fifth of children in either non-Income Support or two-parent families. Children in lone-parent families earned on average 65p less per hour than children in two-parent families (£1.65 and£2.30 respectively). Children living in Income Support families earned an average of 45p less per hour than children in non-Income Support families (£1.82 and£2.27 respectively).

Learning from parents

Children living in lone-parent and Income Support families were more likely to learn about their family's economic circumstances from their parents than were other children.

More lone parents than two-parent families discussed with their children, family income (31 per cent and 13 per cent respectively) and spending (45 per cent and 33 per cent respectively). It is possible that lone parents are sharing their anxieties and concerns about money with their children in the absence of another adult with whom to discuss such matters. Discussions of family income were also more likely in families claiming Income Support (24 per cent) than in other families (15 per cent).

Children living in lone-parent families and those claiming Income Support were more likely to be reminded that their families could not afford things children wanted. Two-thirds of children in lone-parent and Income Support families said they frequently had their requests turned down because their family could not afford what they wanted compared with less than half of all children from two-parent or non-Income Support families.

Beliefs, behaviour and aspirations

A significant number of children living in lone-parent and Income Support families were worried that their family did not have enough money to live on. Children in families on Income Support (42 per cent) were at least five times more likely to think that their family income was inadequate than other children (eight per cent). Similarly, children in lone-parent families (39 per cent) were over four times more likely to say that their family income was too low than were children in two-parent families (nine per cent).

To examine children's immediate expectations they were asked what they would ask for if it were their birthday next week. On the whole, children identified the same types of items and services, however, the estimated cost of the items named by children living in lone-parent and Income Support families was significantly lower than the cost of items named by other children. Regardless of the cost of the desired item, a significant number of children from lone-parent and Income Support families had learnt to accept that they might not get what they wanted for their birthday and to cover up their disappointment.

To establish children's future aspirations they were asked what they would like to do when they left school. Children in lone-parent or Income Support families had much lower career aspirations than children from either two-parent or non-Income Support families. Children from lone-parent or Income Support families were more likely than other youngsters to want jobs which typically take a minimal amount of time to train for and, on the whole, require few, if any, academic qualifications. Moreover, fewer children from lone-parent (21 per cent) or Income Support families (17 per cent) than children in two-parent (31 per cent) or non-Income Support families (32 per cent) aspired to join the labour market in the professional occupations defined as socio-economic group four.

Conclusion

The researchers conclude that as children learn about their family's financial situation, they are likely to form views about their family's economic position in relation to the rest of society. Children from lone-parent families, those who believe their family does not have enough money and those who are frequently denied items learn at a young age to curb their requests for items that they would like to own. Children living in lone-parent or Income Support families also have fewer opportunities to learn how to manage a regular sum of money than other children as they are less likely to receive pocket money or earn money from paid work. It is possible that, for some children, early learning of this sort reduces both their immediate expectations and future aspirations and that they are 'learning to be poor'.

About the study

Fieldwork for the 'Small Fortunes' Survey took place between February and June 1995. The survey was based on a random sample of individual children stratified by children's age, birth order and family type (whether children were living in one- or two-parent families). The dataset (now lodged with the ESRC Data Archive at the University of Essex) contains information about 1,239 children. This report is based on responses to an interviewer-administered questionnaire completed by 435 children aged between five and 16 years (27 per cent from Income Support families, 43 per cent from lone-parent families, with 22 per cent from lone-parent families on Income Support).

How to get further information

The full report, Small expectations: Learning to be poor? by Jules Shropshire and Sue Middleton, is published for the Foundation by YPS. (ISBN 1 902633 27 X, price£10.95 plus£2 postage).

Further details of this survey can be obtained from the authors (Jules Shropshire and Sue Middleton) at CRSP, Loughborough University, Loughborough, Leicestershire, LE11 3TU.

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