New OECD report shows that rising income inequalities in past 20 years hit children hard

Rising income inequalities in OECD countries over the past two decades have hit vulnerable children hard, making it less likely they will fulfill their economic and social potential later in life, a new OECD report has found.

 

The Changing the Odds for Vulnerable Children: Building Opportunities and Resilience report noted that the challenges some children face significantly raise the risk that they will become disadvantaged in adulthood, “putting the brakes” on social mobility. This, the authors noted, can be mitigated by early investment in education, health and families.

 

Growing up in a family with low to no income typically means less access to quality education and health care, the report said. As young people, children from these backgrounds are likely to enter the labour market at an earlier age than their peers and take up low-skilled jobs at a time when technological change and globalisation are increasing the returns to education.

An increase in child poverty in almost two-thirds of OECD countries over the past decade was observed by the authors, who noted that one in seven children in the OECD are growing up in poverty today. The living standards of children from low-income families have also declined in many countries, particularly for those families with the smallest incomes.

Developed countries are not immune to these issues, with the report revealing that homelessness among families has risen significantly in England, Ireland, New Zealand and some US states. For children homelessness can lead to increased anxiety, loss of contact with family and friends and poor educational outcomes.

 

OECD Chief of Staff Gabriela Ramos said “The odds are stacked against vulnerable children and countries need to act now.”

 

Ms Ramos, who leads the OECD’s Inclusive Growth Initiative, launched the report during a conference at the OECD on the issue of vulnerable children, which included an address by Nobel Prize Peace Winner Kailash Satyarthi. 

 

“More efforts are needed and quickly to redress the balance to create a level playing field and ensure that the children who are worse off can get the better deal they deserve. Countries should quickly put in place child well-being strategies that prioritise the needs of vulnerable children,” Mr Satyarthi said. 

The odds can be changed when vulnerable children are given the right support to build resilience, authors said. This includes providing children with opportunities to build positive relationships with adults, providing early intervention for mental health difficulties and supporting parents. Programs such as mentoring, arts education, youth mental health projects and family resource centres empower children and their families to overcome adversity and disadvantage.

Researchers also used the report to reinforce that direct investments in low-income children’s health and education generate the highest pay-off, many paying for themselves in the long run through increased tax revenue and lower social transfers.

 

Counter measures to address the impact of financial disadvantage need to put in place to tackle these issues, ranging from empowering vulnerable families and enhancing child protection, to giving every child the opportunity of starting education early and reducing child poverty, the authors said. 

 

Early intervention, they added, is key and should be prioritised, as young children under three years old are especially affected by family stress and material deprivation because of the rapid pace of early brain development.

 

In a separate report released at the conference, Building Resilience in Vulnerable Children, the OECD revealed the changing patterns of family life. Across the OECD, on average, four in every five children live in couple families, but over the past 10 years, the share of children living with informally cohabiting parents has increased from 10 to 16 per cent. Around 17 per cent of children also live in single parent families. A child in a single parent family is three times more likely to be poor than a child in a couple family.

 

The partnership status of parents should not affect entitlements to child-related support within tax and benefit systems, says the report. However, less than two thirds of OECD countries allow non-married couples to register their partnerships or grant them the tax and benefit advantages available to married couples.

 

Tax and benefit systems need to be more responsive to changes in children’s living arrangements. This will require better information systems, as well as simpler and more transparent benefit rules and needs assessment criteria in order to help social policy treat all children equally.

 

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