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Economics and the Well-Being of Canadian Children

Economics and the Well-Being of Canadian Children. Peter Burton and Shelley Phipps Department of Economics Dalhousie University. Motivation. Economics has paid relatively little attention to children Generally looks at “investing in children”

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Economics and the Well-Being of Canadian Children

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  1. Economics and the Well-Being of Canadian Children Peter Burton and Shelley Phipps Department of Economics Dalhousie University

  2. Motivation Economics has paid relatively little attention to children Generally looks at “investing in children” Should also study their well-being now, while they are children

  3. What can Economics say about Child Well-Being? • Inputs (Access to Resources) • Family Income • Parental Time • Outputs • Future (Educational Attainment) • Present (Children’s Self-Assessed Well-being)

  4. Child Well-Being Can’t Be Understood Apart from Family Limited agency: not economic actors themselves Rely on sharing of family income Non-market goods/services very important Depend on parents for care and cookies Depend on community for healthcare, parks, etc

  5. Changing Resources Available to Canadian Children, Snapshots from 1971-2006 • Child poverty has made the news

  6. Changes in Income for Families with Children 1971-2006

  7. Decile

  8. Changes in Parental Paid Work Hours, 1971 - 2006 Consider total parental paid hours (mother + father) Usual hours per week (most relevant for experience of ‘time crunch’)

  9. Time and Money Packages Illustrate for 1971 and for 2006 Curves show average combinations of paid work time and family income for each decile in given year

  10. Time/Money Trajectories Curves trace paid-hour/disposable income combinations across time for selected deciles

  11. Lone Mothers Hours increased dramatically, now like married mothers in 6thdecile Mean income like that of two parent families in 2nd to 3rddecile (adjusted for family size)

  12. Implications for Child Well-Being? Direct: Smaller Resource Packages (except for richest families) Indirect: Diminished Parental Well-Being

  13. Time Crunch Index • Constructed from ‘yes’ / ‘no’ answers to ten questions, such as: • When you need more time, do you tend to cut back on your sleep? • Do you feel that you’re constantly under stress trying to accomplish more than you can handle? • Do you feel that you just don’t have time for fun anymore? • Index ranges from 0 to 10 (maximum time stress).

  14. Multivariate Analyses Parental time stress increases with paid work hours and decreases with income Results hold after controlling for major changes in last decades, age, education, family size, presence of pre-school aged child, immigrant status, region, urban/rural status

  15. Parental Life Satisfaction • “Satisfaction with life as a whole right now, “ from 1 (very dissatisfied) to 10 (very satisfied) • Only available for 2005 • Multivariate Analysis: Parental life satisfaction increases with income but decreases for high hours

  16. Simulation with Multivariate Results An increase from 2 full-time jobs to 2 high-hours jobs requires family income 2/3 higher to avoid lower life satisfaction Between 1994 and 2006, families in 4thdecile working 80+ hours increased from 13 to 21%, average real income growth was only 18%

  17. Summary: Snapshots over Time Total paid hours supplied by parents have increased across the income distribution Largest increases in paid hours for modest income families; no matching increases in real income Relative growth in time stress and reduced life satisfaction for modest-income parents

  18. Income Histories of Individual Children(with Lihui Zhang) Not just ‘snapshots’ at a point in time Follow family incomes over 10-year span Children 4 to 5 when we first observe them; 14 to 15 by last period 3 cohorts of Canadian children 1994-2004; 1996-2006;1998-2008

  19. Stuck at the Bottom: Secure at the Top? What percent of children who start in bottom quintile when they are 4-5 are again in bottom quintile at age 14-15? What percent who start in the top stay at the top?

  20. Source:NLSCY

  21. ‘Lenses’ What happens during intervening years? How many children are ever exposed to a position of low income? How many children are always (in all six cycles) in a position of low income?

  22. Source:NLSCY

  23. Early life characteristics associated with ‘always’ in bottom quintile (probit analysis): • In order of size of association, a child is at greatest risk if he/she: • Lives in a lone-parent family • Has a parent with no paid work • Has a parent who is non-white • Has a parent with less than university education • Lives in a high-unemployment region/time period

  24. Which changes are associated with movements up or down? Estimate fixed effects models for change in percentile position Explanatory variables are now ‘changes’ (so ethnicity and immigrant status dropped)

  25. Percentile position changes (in order of magnitude) Becomes a single parent family (22 points) Parent loses paid employment (7 points) Parent becomes a student (3 points) An additional sibling (3 points) Parent gets a university degree (1.8 points) Provincial unemployment (0.9 points per 1%)

  26. Summary: Income Histories • Use longitudinal data tracking cohorts of Canadian children from 4 to 5 until 14 to 15 • ‘Stickiness’ of relative income position • High level of ‘ever exposed’ to low income

  27. Largest starting point ‘risks’: parental marital and employment status, regional unemployment, and ethnicity Largest movements up/down the distribution: changes in parental marital status, employment status, and provincial unemployment rate

  28. Child Outcomes Well-being in future (investment) Well-being now

  29. What are the Long-Run Consequences of Growing Up Poor? Children with poor (rich) parents are more likely to be poor (rich) adults. 1/3 of Canadian children born to low-income parents become low income adults (Corak 2006). Compare educational for children who were ‘rich’ versus ‘poor’ ten years earlier Child-completed survey privately (at least 12)

  30. Subjective Well-Being of Children Now Large literature on adult ‘happiness’ Relatively little work on children

  31. ‘Economics of Adult Happiness’ Has focused on association between income and well-being (e.g., Easterlin, 2001; Barrington-Leigh and Helliwell, 2009) Less attention to ‘time’ though another major theme is that social interactions are key to well-being (e.g., Helliwell and Putnam, 2004)

  32. What about children? • Can children assess their own well-being? • For example, can they answer a question like: “How satisfied are you with your life in general?” • Psychologists say answers meaningful from about age 8 (Huebner, 2004) • Correlated with but distinct from other mental health outcomes; stable over time; predictive of future outcomes

  33. What matters for child happiness? • Mostly similar things matter for parent/kids • Health/disability • Relationships (teachers, parents getting along, belonging) • Income

  34. Life Satisfaction for Low versus High Income: Teens Parents

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