Children paying a high price for inequality

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, according to a new OECD report.

Changing the Odds for Vulnerable Children: Building Opportunities and Resilience says that the challenges some children face significantly raise the risk that they become disadvantaged in adulthood, putting the brakes on social mobility. Yet early investment in education, health and families yields high returns later in life.

Children who grow up in poor families have less access to quality education and health care. As young people, they 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.

Child poverty has increased in almost two-thirds of OECD countries over the past decade, with one in seven children in the OECD 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.

The report also reveals 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.

“The odds are stacked against vulnerable children and countries need to act now,” said Gabriela Ramos, OECD Chief of Staff and Leader of the OECD’s Inclusive Growth Initiative, launching 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 worst 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.”

Children with disabilities, for example, are twice as likely to live in poor households. Maltreatment is also a major issue, with around 4-16% of children experiencing physical abuse, 10% neglect or emotional abuse and over childhood 5-10% of girls and 1-5% of boys experience sexual abuse. Chronic stress in early childhood can also have long-term consequences for cognitive and social and emotional development, as well as children’s health.

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

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.

Countries need to put in place policies 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. Early intervention 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, 4 in 5 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%. Around 17% of children also live in single parent families. Yet 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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