Whether measured in relative or real terms, child poverty varies widely across industrialised countries. Those with higher levels of national income tend to have lower real poverty rates, but the United States is an exception. Australia has a relatively high child poverty rate, although the half overall median poverty rate is lower than the United States and United Kingdom.
While the reduction of poverty among the aged has been one of the great success stories of the post-war welfare state, in many countries the last two decades have seen a re-emergence of child poverty. Although the labour market deterioration and family structure changes that have driven these changes have been felt in most (post-) industrialised countries, the poverty outcomes have varied widely.
In the largest industrialised country, the United States, child poverty rates remain high despite relatively high average incomes. Child poverty rates also tend to be higher than average in the other English-speaking countries (including Australia), but much lower than average in the Nordic countries. In the former-socialist countries, dramatic falls in incomes associated with the transition to capitalist economies have led to equally dramatic increases in child poverty.
Why is there so much variation in child poverty rates between countries at similar levels of economic development? What roles do differences in family structure (for example, sole-parenthood), labour markets (for example, unemployment), and welfare state institutions (income transfer programs) play in explaining this variation?
This article presents results from a recent UNICEF study of patterns of child poverty across the industrialised world (Bradbury and Jantti 1999). The study is based on data from the Luxembourg Income Study (LIS)(1) covering some 25 industrialised countries, including most of the OECD, several of the important non-OECD economies of Eastern Europe (including Russia), and one representative of the newly industrialising countries of East Asia (Taiwan).
Measuring child poverty
In rich nations, poverty is rarely so severe as to threaten survival itself. However, it is still true that `money matters' for children. Household consumption, whether in the form of goods and services purchased on the market, or via the provision of goods and services by the state, affects child wellbeing both directly and indirectly. Consequently, children are defined here to be poor when they live in a household which has `a particularly low level of consumption'.
The possibility of social exclusion and its associated social fragmentation is one major reason for our concern about poverty (although not the only reason). For children, the impact of poverty on their social integration is often via their parents. Parents with access to levels of material resources that are low for their society may be excluded from the mainstream of social activities, and this may in turn exclude their children. In addition, reduced consumption opportunities may also exclude children directly, particularly as they become older and seek to form social contacts outside the home. As one 14-year-old girl in a family reliant upon state benefits in the United Kingdom says to Roker and Coleman (1998: 17) `For me it's about not being part of tilings, not having the money to live normally like other people.'
The measure of consumption used here is the equivalent annual disposable income of the household in which the child lives(2). Income includes market incomes and government cash transfers, and deducts income taxes and compulsory social insurance contributions. People aged less than 18 years are defined as children. It is assumed that every person in the household has the same poverty status. Income is divided by an `equivalence scale' which takes account of the variations in needs as household size changes. The scale used in the results presented here is needs = [(adults + children x 0.7).sup.0.85]. (Sensitivity testing shows little change in cross-national patterns when an …