Peter Burton and Shelley Phipps Department of Economics Dalhousie University

 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

 Inputs (Access to Resources) Family Income Parental Time  Outputs Future (Educational Attainment) Present (Children’s Self-Assessed Well- being )

 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

 Child poverty has made the news

Decile

 Consider total parental paid hours (mother + father)  Usual hours per week (most relevant for experience of ‘time crunch’)

 Illustrate for 1971 and for 2006  Curves show average combinations of paid work time and family income for each decile in given year

 Curves trace paid-hour/disposable income combinations across time for selected deciles

 Hours increased dramatically, now like married mothers in 6 th decile  Mean income like that of two parent families in 2 nd to 3 rd decile (adjusted for family size)

 Direct: Smaller Resource Packages (except for richest families)  Indirect: Diminished Parental Well-Being

 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).

 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

 “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

 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 4 th decile working 80+ hours increased from 13 to 21%, average real income growth was only 18%

 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

 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 ; ;

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?

Bottom Quintile nd Quintile rd Quintile th Quintile Top Quintile Bottom Quintile, nd Quintile, rd Quintile, th Quintile, Top Quintile, Source:NLSCY

 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?

Source:NLSCY

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

 Estimate fixed effects models for change in percentile position  Explanatory variables are now ‘changes’ (so ethnicity and immigrant status dropped)

 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%)

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

 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

 Well-being in future (investment)  Well-being now

 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)

 Large literature on adult ‘happiness’  Relatively little work on children

 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)

 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

 Mostly similar things matter for parent/kids Health/disability Relationships (teachers, parents getting along, belonging) Income

TeensParents Life Satisfaction for Low versus High Income:

 Income matters for both parents and children but larger association for parents  High paid work hours of parents associated with lower child happiness (as well as higher parental stress and lower parental life satisfaction)  Children greatly affected by relationships within the family/ parents getting along

 Market Earnings (problem = stagnant earnings in middle and bottom) Minimum wage policies Supporting collective bargaining Making part-time/casual jobs better jobs (in terms of wages, benefits, job security etc)  Government Transfers Canadian Child Tax Benefits helpful, but some countries do better

Poverty Rates for Families with Children in International Context Source: LIS

 Remove part-time penalty  Quality/flexibility of daycare/afterschool programmes  Flexibility in use of parental leave; compassionate care benefits E.g., Child sick days in European countries

 High Quality  Available to all children, regardless of income  Example: Health-care Child-care/After-School Education

 Since 1970s stagnant incomes and increasing paid hours in middle/bottom of income distribution  Increasing time stress and lower life satisfaction for parents in middle/bottom of income distribution

 “Stickiness” of early life income position  Rich/poor differences in aspirations evident by early teens and later educational outcomes

 Child happiness lower in low-income families or when parent work long hours  But, particularly significant channel through parental stress, family functioning, parents ‘getting along’

 Improving market earnings for families with modest wages  Increased redistribution via government taxes and transfers  Helping with time crunch  Continued excellence in public institutions (healthcare, education, childcare/after-school care)