2 June 2020 - The economic fallout of the COVID-19 pandemic could push up to 86 million more children into household poverty by the end of 2020, an increase of 15 per cent, as a result of the COVID containment measures, according to recent analysis.
The economic downturn following the pandemic is expected to be deep and persistent for many countries, resulting in increased and unequal poverty risks, greater food insecurity, higher infant mortality and child health concerns, and risks damaging both youth employment and education in the years to come – all of which are key sustainable development goals for children and youth.
A new study from the UNICEF Office of Research – Innocenti reviews evidence from pandemics and economic crises in the recent past to generate guidance on how governments can best protect children and families. The study reviews economic policy and social protection responses to these major crises in order to provide guidance to inform the initial and long-term public policy responses to COVID-19.
“Evidence from previous crises shows that stimulus can reduce poverty risks in families with children,” said Nyasha Tirivayi, social protection research manager at UNICEF Innocenti. “However, where austerity follows, poverty risks then increase, with detrimental impacts on childcare, parental caregiving, adult mental health, homeownership, crime and the prevalence of infectious diseases.”
The review focuses on virus outbreaks/emergencies, economic crises and natural disasters and shows that policy responses to disease pandemics (apart from HIV/AIDS) were limited, compared to responses to economic crises and natural disasters. The smaller body of evidence that exists on health pandemic policy responses, however, shows that they have not been child-focused.
Useful insights are also provided by the 2007-2008 Global Financial Crisis. Following the Great Recession high- and middle-income countries mostly implemented a short initial phase of expanded fiscal stimulus and social protection responses, followed by a longer period of austerity. In low income countries expansion was constrained by weak social protection programmes, low pre-existing coverage and diminished revenues. Stimulus measures mostly did not reach people equitably, usually focusing on male-dominated industries. When a longer phase of austerity followed, efforts to mitigate the effects on families and children were short-lived, with severe impact and many deprivations affecting children.
Fiscal stimulus responses reduce poverty and protect family income, while austerity measures have detrimental impacts on them
Findings show that fiscal stimulus responses reduce poverty and protect family income, despite a tendency to benefit male dominated sectors. However, austerity measures have detrimental impacts on childcare and parental caregiving, adult mental health; the prevalence of infectious diseases, and personal safety through increases in homelessness and crime.
Moreover, social assistance programmes are shown to have far-reaching positive impacts on child and family wellbeing, school attendance, health care usage, poverty reduction, food security, emotional wellbeing, and family livelihoods. These impacts may persist beyond the short term (2+ years), especially in low- and middle-income countries (LMICs). Spending on social services, like health care and schools, reduces child mortality and increases educational attainment. However, some social transfers can have adverse impacts: school subsidies can decrease school finances and the quality of services, and scholarships can decrease equity by favouring those who are better-off.
In the current epidemic response, social protection policies have been one-off or temporary, and often conditional on employment. On the other hand, fiscal stimulus has received substantially more investment than social protection responses, 5.7 times higher than social protection per response, on average, in HICs.
Policy responses to past health and economic crises provide the following lessons for the COVID-19 pandemic response
“Although it protects businesses and jobs, fiscal stimulus is likely to miss out on the most vulnerable, and less effective than direct payments to families,” Dominic Richardson, chief of social and economic policy research at UNICEF Innocenti, said. “The expected wave of austerity policies is yet to begin, and although it is not inevitable, if it happens, austerity should seek to avoid further entrenching inequalities that put at risk the progress to date on the Sustainable Development Goals, and the living standards – and lives – of many families with children”.
Policy responses to past health and economic crises provide the following lessons for the COVID-19 pandemic response:
- Responses must address child vulnerabilities and gender inequality to achieve sustainable impacts.
- Economic stimulus presents an opportunity to expand and strengthen national social protection systems.
- Social protection programmes must be equitable and inclusive.
- Austerity policies, if enacted, should avoid further entrenching inequalities.
- Access to health systems must be expanded both before and during crises.
- Integration of social protection systems with other essential social services is crucial.