Economic and Social Consequences of parental separation: Jonathan Bradshaw

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Economic and Social Consequences of parental
separation Jonathan Bradshaw

• Round Table 2 CHANGES IN FAMILY STRUCTURE AND
  LIVING CONDITIONS

The European Population Day Tours 21 July 2005
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Evidence

• There are too few separation events in most panel
  surveys to answer question
• So comparative evidence is either
• Cross sectional (from ECHP)
• Model families simulated (http//www.dwp.gov.uk/as
  d/asd5/rrep174.asp)
• Based on all lone parents some are single never
  married/cohabitating and therefore not separated
• Mainly economic income
• Data 2001

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children in lone parent families ECHP 2001
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Hypotheses 1.

• Child poverty rates higher in lone parent
  families in all EU (15) countries True except
  Finland
• Comparatively higher lone parent child poverty
  rates in Belgium, Germany, the Netherlands, UK
  and Portugal

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Child poverty rate (equivalent income less than
60 median) by family type ECHP 2001
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Hypothesis 2

• The caring parent (usually mothers) and their
  children experience the poverty risk
• Not so much for non resident parents (usually
  fathers).

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Scenario 1 Poor family

• Couple with two school age children
• Father earns average male earnings, mother does
  not earn
• Split but father sustains previous earnings
  mother now on social assistance

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income LOSS before housing costs
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Scenario 2 Well off family

• Couple with two school age children
• Father earns average male earnings, mother earns
  average female earnings
• Split but sustain previous earnings

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income LOSS before housing costs
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Hypothesis 2 Conclusion

• Generally parent with care experiences a bigger
  loss of income on separation
• Not true for Austria
• Not true for many countries if caring parent well
  paid and sustains employment

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Also depends on

• Housing costs and childcare costs assumptions
• Child support paid by non resident parent
• Also need to take account of needs equivalence
  scale
• 1.0 for first or only adult
• 0.5 for second adult
• 0.3 per child (modified OECD)

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Equivalent income ppp per month 2001. One parent
earning average earnings
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Equivalent income ppp per month 2001. Both
parents earning average earnings
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Hypothesis 3 and 4

• Relative poverty risk depends on the employment
  status of parents True.
• Lone parents out of the labour market have much
  higher risks True except Bel, Fin, Ire and Net
  where children in workless couples have highest
  risk

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Child poverty rate (equivalent income less than
60 median) by family/employment type ECHP 2001
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Hypothesis 5 Policy matters

• These differentials are a function of the
  tax/benefit package
• Countries with more generous child benefit
  packages have lower lone parent child poverty
  rates

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Child poverty by average value of child benefit
package for lone parents
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Conclusions

• Risk of poverty high at separation
• Lower if caring parent in well paid employment
  which is sustained
• Policy can support that child care, in work
  tax/benefits, regulation
• Child benefit package more important if caring
  parent cannot work or work full-time
• Data on poverty and policy out of date(2001)
• We probably need to learn from Austria and Finland