(13 April 2017) Nearly ten years after the first financial shock waves rippled through the world economy, generating a global recession, the track record of high income countries in protecting children from its worst effects, is mixed. A new book, Children of Austerity: Impact of the Great Recession on child poverty in rich countries, published by the UNICEF Office of Research – Innocenti, in collaboration with sixteen international research institutions, provides a detailed account of the effects of the crisis, and government policy responses to it, on children in high income countries.
“Across the rich countries of the world large numbers of children were severely affected by the global economic crisis, with child poverty – anchored to pre-crisis levels – increasing in many countries,” said UNICEF Innocenti’s Yekaterina Chzhen, co-editor of the volume and lead author of the comparative chapter. “This is the first international study of the effects of the crisis and government responses, with explicit emphasis on children in rich countries.”
The country case studies focus on Belgium, Germany, Greece, Hungary, Ireland, Italy, Japan, Spain, Sweden, the United Kingdom and the United States. In-depth analysis of the wide-ranging experiences provides valuable lessons about protecting children during economic crises, since the selected countries cover the whole spectrum in terms of their circumstances prior to the crisis, the severity of the crisis’ impact within their borders, and their national policy responses.
The majority of the 41 industrialized countries experienced peak-to-trough falls in GDP of between 2 and 9 per cent between 2006-8 and 2009-14. Eight countries, including Ireland, Italy, and Greece, saw double digit reductions.
While the study uses a range of poverty measures, the headline results refer to ‘anchored’ child poverty – the share of children under 18 living in households with incomes after taxes and transfers below 60 per cent of the national median in the pre-crisis years (i.e. 2007/8), adjusted for inflation.
- The recent economic crisis and subsequent austerity hit children particularly hard - Between 2008 and 2014, child poverty increased in two-thirds of European countries; with increases of over 15 percentage points in Cyprus, Iceland and Greece and of 7-9 percentage points in Hungary, Italy, Ireland and Spain.
- Spending on families and children in Europe fell when it was most needed – Not a single European country increased the share of spending on family benefits and two-thirds reduced per capita spending, while spending on pension benefits increased across the board between 2010 and 2013.
- Cuts in spending on health, education and other public services hurt families with children – Income poverty statistics mask other forms of hardship. The rates of ‘unmet medical need’ rose significantly among the poorest households in Greece and significant cuts in health and education spending affected children in Spain.
- The crisis and austerity highlighted stark regional disparities – ‘Anchored’ child poverty increased to 20 per cent in northern Italy and to 50 per cent in southern Italy between 2008 and 2014; in the UK, Northern Ireland’s child poverty rate increased from 23 per cent to 27 per cent, while decreasing 2-4 points in Scotland, England and Wales.
- Child poverty in the United States did not increase as much as expected - While unemployment nearly doubled, there was only a marginal increase in ‘anchored’ child poverty in the US. An expansion in the generosity and coverage of the social safety net during the crisis cushioned its impact on families with children.
“Protecting family income during downturns is central to addressing child poverty, but not adequate on its own. Children are also severely affected when there are cuts in spending on schools and health facilities, and when parents cannot access essential services such as childcare,” said Chzhen. “The book’s message is that to protect children in good times and in bad, governments should prioritize a combination of universal income support that is social insurance-based and means-tested, with health and education spending, directed towards those in greatest need.”
According to Children of Austerity experience before and during the worst period of the crisis shows how politically challenging maintaining a well-directed, adequately resourced social support structure for families with children, can be. While not a panacea, adequate child-focused payments are a potentially powerful element in the overall social safety net for both working and non-working families. Such payments must be part of a coherent anti-poverty strategy that includes not only social protection but also employment, education and childcare policies.
The opinions expressed in ‘Children of Austerity’ are those of the authors and editors and do not necessarily reflect the policies or views of UNICEF, nor of any particular Division or Office. Edited by Bea Cantillon (University of Antwerp), Yekaterina Chzhen (UNICEF Innocenti), Sudhanshu Handa (University of North Carolina), and Brian Nolan (University of Oxford). It includes contributions from 22 authors.
For more details about the volume, see the Oxford University Press book webpage.