Child poverty in Belgium in comparative perspective Jonathan Bradshaw The Future of Generation Z Belgian Federal Ministry for Social Integration Brussels 15 December 2016

Why child poverty? The best test of a welfare state Child poverty is not fair nor just It is very damaging to society It costs an enormous amount Public Social Welfare Centres are not the only institutions in Belgium devoted to reducing child poverty But social assistance is the backstop – the floor. So how is Belgium doing? In comparative perspective?

UNICEF RC 11 Relative child income poverty rate by overall child well-being excluding material well-being. Child poverty is associated with most child well-being outcomes – child health, educational attainment, housing and the environment, behaviours and risks and even child happiness. Here is the association between the relative child poverty rate and a summary of all other domains of well-being from UNICE F RC. The Netherlands, Japan and Spain are positive outliers and Bulgaria a negative outlier. But there is an association and Belgium is middling on child well-being and middling on child poverty.

UNICEF RC 11 relative at risk of child poverty rate by child subjective well-being There is even a strong association between relative child poverty rates and subjective wellbeing at an international level. Dutch and Spanish children are happier than they should be. Polish, Czech and Finnish children are less happy than they should be. Belgium is again in the middle on child poverty and child happiness.

Incidence of bullying (HBSC) One reason why material well-being is associated with subjective well-being is that both are also strongly associated with bullying – children who are left behind are more likely to be bullied. The incidence of bullying varies between countries. Wallonia has comparatively quite high bullying rates and Flanders is also above average.

Children left behind UNICEF RC13 UNICEF RC 13 covered income, education, health and life satisfaction – comparing the bottom with the median on each of these and produced this overall league table. Belgium is in the bottom third of this distribution with its poorest children left behind particularly in educational attainment and life satisfaction and in the middle third in income and health.

Child poverty rate (under 18 <60% median) So with this brief evidence of the importance of child poverty how is Belgium doing. In 2015 Belgium was middling with relative child poverty rates (what the EU call AROP) below the EU average. But similar to many countries in the EU child poverty was higher in 2015 than it had been before the start of the recession. There is a debate to be had about the dates here – Belgium’s recession was rather shorter than many others.

Child poverty rates for lone parents and couples (%). As with all EU countries children in lone parent families in Belgium are much more likely to be poor than children in couple families and the difference in child poverty rates for Belgium are towards the top of the EU distribution.

Severe material deprivation <18s Another quite alarming factor is that children living in households with severe material deprivation increased slightly in Belgium and your child deprivation levels are in the middle of the EU distribution. It may be that this increase in deprivation cannot be blamed on the recession but on inward migration. But frankly I found it quite unexpected.

Impact of social transfers on child poverty rates (<18) 2015 Now we turn to the contribution made by your welfare state. If Belgium did not have social assistance and family benefits its child poverty rate would have been 33% but thanks to these transfers it was 18% in 2015 – a reduction of 45%. This effort is above average for EU countries but not nearly as impressive as Finland, Norway and Ireland who all reduce their child poverty rates by over 60%. Nor the UK which is quite surprising to me.

Child poverty gaps of lone parents before and after social transfers As important as reducing poverty rates (% below the threshold) is the poverty gap how far below the threshold. This analysis is based on our own analysis of the impact of transfers on lone parents poverty gaps. Without transfers the poverty gap in Belgium would be one of the largest in the EU but after transfers it is much reduced the third biggest % reduction. But if I may point out not quite as low as the UK and Ireland.

Poverty rates 65+ versus <18 2015 Belgium is one of the majority of countries in EU that has a higher child poverty rate than pensioner poverty rates.

Spending on old and children 2008-2013 (euros purchasing power parity per inhabitant). This is also reflected in spending patterns. All countries spend a great deal more per pensioner than they do per child – Finland spends 3.5 time, Sweden 4 times more, and Belgium over 5 times more. This is not equitable.

Changes in spending on old and families with children 2008-2013 (euros purchasing power parity per inhabitant). And spending has become more inequitable since the recession began. This chart traces changes in spending since 2008. Many countries have seen reductions in spending on children - children have really been the victims of recession. Where spending has increased as in Belgium it has increased faster for pensioners than children. Only Switzerland, Germany, Slovakia and Bulgaria have increased spending on children more than spending on the elderly. This is not equitable.

Changes in the effectiveness of transfers to reduce poverty 2008-2015 And there is evidence that like many EU countries over the recession Belgium’s transfer system became more effective at reducing pensioner poverty and at the same time less effective at reducing child poverty. This probably reinforces a trend that started before the recession. Most EU countries have been protecting their pensioners more than their children - indeed at the expense of their children. This generational inequity is not sensible social investment.

Belgium: Relative poverty risk

Belgium: Severe material deprivation

Composition of social assistance income of lone parent plus 2 as % average wage 2014 Here is how that income is made up for a lone parent expressed as a proportion for the average wage. In Belgium it is social assistance, family benefits and a small tax benefit

Composition of social assistance income of couples plus 2 as % average wage 2014 Here is the same data for a couples plus 2 Belgian support is slightly lower than for the lone parent and far from the most generous in the EU

Contribution of wages and benefits to net disposable income couple plus 2 one earner 50% average earnings 2014 OECD Tax Ben Turning to the benefit system for low wage earners. Belgium seems to provide much less in transfers than most other countries

Total net income couple plus two children on the minimum wage as a proportion of the poverty threshold in 2012.   This is slightly older data 2012 based on the wonderful University of Antwerp’s MIPI data. It shows the extent to which benefits are closing the poverty gap - the gap between the net minimum wage and the poverty threshold 100%. Transfers make a substantial contribution although only the Irish system actually succeeds in lifting this family out of poverty. It is interesting that Belgium achieves relatively more than any other countries using the minimum wage. The new conservative government in the UK in 2015 effectively declared that the balance between wages and benefits was not right. They have begun to cut back on tax credits and freeze other family benefits and partially offset these losses by a substantial hike in the minimum wage – the minimum wage will reach 60% median earnings by 2020. Employers are squealing, including large multinational retailers and the social care sector. Increasing low wages is not a particularly effective anti poverty strategy. The main gainers wont be families with children and in fact child poverty is predicted to increase by 50% by 2020. But there is something in the argument that the low paid labour market has been being propped up by the state and could carry more of the financial burden of child rearing. But what amount? Should the minimum wage be a family wage and if so what family? I don’t have an answer to this question but in the context of global downward pressures on wages, the pressures of aging and political and financial constraints on public expenditure and taxation it is a question that is going to become more salient to the issue of what is equitable for children. It seems that so far Belgium is managing it quite well!

Conclusions Belgium has a child poverty problem – only middling in the EU league table Some evidence that it has got worse during the recession. Much worse for lone parents than couples Middling on child severe material deprivation – also increased during the recession Belgium transfers (social policies) make a substantial contribution to reducing the poverty rate and are very good at reducing the poverty gap for lone parents.

Conclusions Child poverty is higher than pensioner poverty The difference has been exacerbated since the recession Partly because spending on pensions has increased more than spending on children Your social assistance payments are middling to low comparatively Your support for low paid families is also comparatively low but your minimum wage is higher than in many other EU countries and doing more work

WHY? (Julie Vinck, Wim Van Lancker & Bea Cantillon 2017) Children living in very low work intensity HHs are particularly vulnerable BUT almost 50% of poor children live in a HH where parents work Children living in single parent and/or migrant HHs are particularly vulnerable Overrepresentation of low-skilled parents among poor children BUT the majority lives with not low-skilled parents Child poverty is not only a problem of poor qualifications, nor is it only a problem of not having a job

Recommendations (Vinck et al) Integrate non-working families into the labour market Child care is crucial Labour market reforms & making work pay for low-skilled Yet, social protection must be increased for working and jobless families alike  Role for child benefits

Twitter @profjbradshaw THANK YOU Further reading: Vinck, J., Van Lancker, W. and Cantillon, B. (2017) Belgium: Creeping Vulnerability of Children Chapter 3 in (eds) Cantillon, B, Chzhen, Y, Handa, S. and B Nolan Children of Austerity: Impact of the Great Recession on Child Poverty in Rich Countries. Oxford: OUP. Published 13 April 2017. jonathan.bradshaw@york.ac.uk Twitter @profjbradshaw