Global Economy
Poverty in households with children is rising in nearly all OECD countries
By Finfacts Team
Apr 27, 2011 - 11:41 AM

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Poverty in households with children is rising in nearly all OECD countries. Governments should ensure that family support policies protect the most vulnerable, according to the OECD’s first-ever report on family well-being.

Doing Better for Families says that families with children are more likely to be poor today than in previous decades, when the poorest in society were more likely to be pensioners.

The share of children living in poor households has risen in many countries over the past decade, to reach 12.7% across the OECD. One in five children in Israel, Mexico, Turkey, the United States and Poland live in poverty. (The OECD defines poor as someone living in a household with less than half the median income, adjusted for family size).

The ratio of Irish children in poor households is 16.3%.

“Family benefits need to be well designed to maintain work incentives, but they need to be effective in protecting the most vulnerable, otherwise we risk creating high, long-term social costs for future generations,” said OECD Secretary-General Angel Gurría.

The report documents how families across the OECD have changed dramatically in just a generation. With fertility rates dropping from 2.2 children per woman to 1.7 over the past three decades, families are getting smaller. Fewer people are getting married and among those that are, divorce rates are rising.

Women are better educated than ever before, and overtaking men in the process: more than one- third of women under 35 have now completed a university education (compared to just over 20% twenty years ago).

There are more dual-earner than one-earner couple families in almost every country. Female employment in the OECD has risen in the past 15 years by more than 10 percentage points, from just over half of women working in the mid-1990s to nearer 60% in 2009.

Further increases in women’s employment would help address the challenges of population ageing, but may be difficult to achieve unless men help out more with housework and caring responsibilities (on average women do 2½ hours more work in the home than men). Even in Iceland, where fathers take the most leave, still only one-third of parental leave days are taken.

Changing family structures, lower fertility rates and ageing populations have led to a growing share of households without children. In all OECD countries, except Canada, Chile, Mexico and Ireland, over half of households do not include children.

In Asian, Nordic, and southern European countries, men and women work predominantly full-time. By contrast, in the Netherlands and Switzerland, but also in Australia, Germany, Ireland, New Zealand and the United Kingdom, much of the increase in female employment has been on a part-time basis, adding to the job satisfaction of most of these workers, but often with negative consequences on career progression.

Most OECD countries, except Ireland and, until recently, New Zealand, have made parental income support conditional on job-search and other participation commitments once the youngest child has reached compulsory school age.

In 2009, the TFR (total fertility rate) was around the replacement rate in Ireland, Mexico, Turkey and New Zealand, and it was above replacement level in Iceland (2.2) and Israel (3.0).

The OECD recommends that governments should:

  • Ensure that work pays for both parents, including through assistance with childcare costs.
  • Help families combine work and care commitments, through an integrated set of leave, care and workplace support for parents of young children.
  • Design parental leave systems that encourage more fathers to take and share leave and promote their engagement with homecare responsibilities.
  • Start investing in family policies during the early years and sustain investment throughout childhood.
  • Ensure high-quality childcare services are linked to improved cognitive development, especially for children from poor households.

“More family-friendly workplaces, equal career prospects for men and women, and a better sharing of care responsibilities not only make economic sense, they are a moral and political imperative,” said Gurría.

The Paris based Organisation for Economic Cooperation and Development is a think-tank for 34 mainly developed countries. OECD member countries are: Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The European Commission takes part in the work of the OECD.

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