Wednesday, 2 August 2017

SOCIAL POLICY MITIGATED CHILD POVERTY IN EU IN THE GLOBAL CRISIS - BUT NOT ENOUGH







Jonathan Bradshaw and Oleksandr Movshuk

Social and fiscal policy was used in European countries to mitigate the impact unemployment and falling real wages on child poverty that followed the global crisis. This is shown by comparative decompositional analysis of changes in child poverty in working age households over the recession using EU-Statistics on Income and Living Conditions (EU-SILC) data between 2008 and 2014 (incomes in 2007 and 2013) in the figure below. The decomposition uses national currencies rather than purchasing power parities in order to avoid the impact of severe fluctuations in exchange rates in some countries over the period. The figure shows the change in the contribution to the poverty rate (less than 60% median equivalent income) of reductions in gross market income and how these were mitigated (or exacerbated) by changes to direct taxes and cash benefits over the period.

In all countries changes in market income increased poverty as a result of unemployment and decreased earnings.  However in ten countries cuts or reductions in direct taxes and or improvements or increases in cash benefits mitigated this effect and there was no overall increase in child poverty. However child poverty increased in all the other countries and in Norway, Slovakia, Hungary and Romania this was partly because cash benefits fell (or became less effective) over the period. In most countries reductions in direct taxes paid was more important in reducing child poverty than increases in benefits received.

This analysis really only takes us up to the start of the recession as many countries were still mired in deficit reduction in 2013.

For example we can certainly expect that the UK will be joining the group of countries with increases in child poverty due to the cuts in working age benefits that have been made since 2013. The Institute for Fiscal Studies expects UK relative child poverty to increase from 19% in 2014/15 to 27% in 2021/22 before housing costs and from 29% to 36% after housing costs.





DIMINISHING TRANSFERS INCREASES POVERTY



 George Osborne claimed his higher minimum wage for those over 25 pegged to 60% median earnings by 2020 was a "new settlement" - a large scale shift from being a "low wage, high tax, high welfare economy to a higher wage, lower tax, lower welfare".  Lower welfare is still being rolled out in the freezing of working-age benefits, the benefit cap, the two-child policy, cuts in employment and support allowance, the bedroom tax and rent limits in housing benefit. Beatty and Fothergill have estimated that the cumulative loss from these cuts since 2010 is £27 bn/year. Just the post 2015 cuts will by 2021 result in couples with two or more dependent children will losing e £1,450/year and lone parents with two or more will lose £1,750/year .

Rowntree in his first survey of poverty in our City of York in 1898 found that low wages, paid to many in his sample by his father’s chocolate factory, were the main reason why households could not reach his primary poverty threshold, at least for working aged households. At that time there were no taxes on working class wages and there were no family benefits. The first small state supplement to low wages came in the form of family allowances in 1945, but Beveridge was mainly concerned with social security for people out of the labour market.  In 1965 Abel Smith and Townsend in The Poor and the Poorest found that the biggest group of households living below their social assistance threshold were employed families. The result was the progressive expansion of in-work transfers: rent rebates/housing benefit, rate rebates/council tax benefit, family income supplement, child benefit, family credit, working tax credit and child tax credit, and now universal credit. Equal pay legislation came in 1970 but the minimum wage not until 1999 and meanwhile the wages councils which had regulated the wages of some low paid had been abolished by the Thatcher government.

 The association between living standards and wages over the long durĂ©e must certainly fluctuate with the economic cycle. When unemployment has risen, cash benefits have made a larger contribution. It is possible to observe this by creating a time series, at least since 1977, using the Office of National Statistics series The effects of taxes and benefits on household incomes. Figure 1 shows the share of net income contributed by net earnings, cash benefits and direct taxes for the bottom quintile of working age households. When unemployment  increased in the early 1980s and early 1990s the contribution from cash benefits increased. However it is significant that this did not happen in the 2008 recession, at least after 2010 when austerity measures began to dominate policy. By 2015/16 the contribution of cash benefits to the net income of the lowest quintile was the lowest it has been since 1981.
 
This is partly because unemployment is at a record low level. But it is also the result of the freezing and cuts to working age benefits. The consequence of these cuts is that the Institute for Fiscal Studies expects UK relative child poverty to increase from 19% in 2014/15 to 27% in 2021/22 before housing costs and from 29% to 36% after housing costs.

 

 Figure 1: Quintile 1: Effects of taxes and benefits on working age household income.  Unemployment rate right hand axis.


 

 

Wednesday, 19 April 2017

HAPPINESS AND DEPRIVATION



UNIVERSITY OF YORK
Social Policy Research Unit

HAPPINESS AND DEPRIVATION


The What Works Centre for Well-being and the New Economics Foundation (Abdallah et al 2017)[1] has developed an index which provides a measure of well-being for local authority (LA) Districts in England. This note explores whether local level well-being is associated with deprivation using the English Index of Deprivation 2015.

The What Works well-being index is derived from pooled data from the Office of National Statistics Annual Population Survey: Personal Well-Being, April 2012 - March 2015 (and earlier). The index has four components:
·         Overall how satisfied are you nowadays?
·         Overall, to what extent do you feel the things you do in your life are worthwhile?
·         Overall, how happy did you feel yesterday? and
·         Overall, how anxious did you feel yesterday?
Respondents are given a scale from 0 (lowest) to 10 (highest) to rank their response to each question. Available in the data set are mean scores and indicators of variation for each component for each district and averages for all four components.

Table 1 shows that deprivation is strongly associated with the means of three of the components of well-being and most strongly with life satisfaction. That is an area with less deprivation and thus a higher deprivation rank has a population with higher life satisfaction. The exception is the anxious component which is only weakly associated with deprivation but the direction of the association is consistent (because a higher score means more anxious on this variable). Figure 1 shows the association of the mean of all four components of well-being and deprivation rank. Also the higher the deprivation rank, that is the less deprived an area, the less the inequality in well-being within the LA.  The opposite is also true - areas with higher inequality in well-being are more deprived (shown in figure 2). The association with deprivation is stronger for inequalities in well-being than for mean well-being.

Table 1: Correlation of LA deprivation rank and mean and variation in well-being 2012-2015

Correlation with Index of Deprivation rank 1=most deprived LA
Mean life satisfaction
.640**
80/20 ratio life satisfaction
-.626**
Mean happy
.540**
80/20 ratio happy
-.573**
Mean worthwhile
.551**
80/20 ratio worthwhile
-.639**
Mean anxious
-.164*
80/20 ratio anxious
-.394**
Mean all four components
.551**
Standard deviation of all four components
-.618**



Figure 1: ID rank by mean of four components of life satisfaction 2012-2015


Figure 2: ID rank by Inequality in well-being

Conclusion: About a third of the well-being in a LA District can be explained by material deprivation.


[1] Abdallah, S., Wheatley, H. and Quick, A. (2017) Wellbeing inequality measures. London: What Works Centre for Wellbeing/New Economics Foundation.  


Wednesday, 5 April 2017

TEENAGE CONCEPTIONS AND DEPRIVATION

UNIVERSITY OF YORK
Social Policy Research Unit

TEENAGE CONCEPTIONS AND DEPRIVATION

31 March 2017

Background
Between 2000 and 2015 the rate of conceptions per 1000 women under 18 has fallen by 52% in England and Wales. Most of the reduction has occurred since 2007 and the trend is still on a steep downward trajectory (see Figure 1).

Figure 1: Conceptions per 1000 women under 18. England and Wales


The Office for National Statistics has a Conceptions-Deprivation Analysis Toolkit which is designed to enable the analysis of teenage conceptions by the deprivation of the area.  At the moment this is only available for the period 2009-11. In this note we have analysed the conception data up 2015 and related it to the latest Index of Deprivation (ID) for 2015 at upper tier local authority level.

Findings
It is already well known[1],[2] that there is a strong association between the rate of teenage conceptions and the level of deprivation of an area. Figures 2 and 3 show the conception rate in 2000 and 2015 compared with the ID rank. The association between teenage conceptions and deprivation has weakened slightly as the conception rate has fallen. This is because there has been a slight tendency for the more deprived LAs to have had larger reductions in their conceptions rates (see Figure 4).

Figure 2: LA under 18 conception 2000 rate by ID rank

Figure 3: LA under 18 conception 2015 rate by ID ranks


Figure 3: % change in LA under 18 conception rates 2000-2015 by ID ranks

There are some quite deprived LAs among the 20 LAs with the largest reduction in their conception rates 2000-2015, including Hackney (see Table 1). Generally London Boroughs have had the largest reductions in teenage conceptions.

Table 1: The 20 LAs with the largest % reduction in teenage conceptions 2000-2015 by their ID rank
Deprivation rank
Local authority
Teenage conception rate 2000
Teenage conception rate 2015
% reduction in teenage conceptions 2000-2015
36
Westminster
57.2
12.0
79.0
145
Bracknell Forest
35.2
7.4
79.0
69
Kensington and Chelsea
49.7
10.6
78.7
94
Wandsworth
68.5
18.6
72.8
51
Camden
48.3
13.5
72.0
19
Haringey
74.1
21.0
71.7
2
Hackney
79.5
22.7
71.4
57
City of London
79.5
22.7
71.4
152
Wokingham
27.5
8.1
70.5
21
Southwark
83.0
24.7
70.2
118
Merton
46.3
14.1
69.5
53
Hammersmith and Fulham
59.8
18.4
69.2
33
Brent
53.7
17.5
67.4
54
Bristol, City of
53.0
17.3
67.4
20
Lambeth
87.5
28.7
67.2
151
Windsor and Maidenhead
27.0
9.1
66.3
13
Islington
62.4
21.4
65.7
63
Ealing
40.3
14.0
65.3
24
Lewisham
67.3
23.4
65.2
15
Waltham Forest
57.2
20.4
64.3

Over the period since 2000 some large deprived LAs have achieved very large reductions in teenage conceptions (Table 2). Manchester, the most deprived local authority, has achieved a reduction of 56.3% (295 teenage births) and Birmingham has 55.1% (588) fewer teenage births.

Table 2: Most deprived 20 LAs in ID 2015 by % reduction in the rate of teenage conceptions
Deprivation rank
Local Authority
Teenage conception rate 2000
Teenage conception rate 2015
% reduction in teenage conceptions 2000-2015
1
Manchester
65.9
28.8
56.3
2
Hackney
79.5
22.7
71.4
3
Barking and Dagenham
67.5
31.0
54.1
4
Blackpool
69.9
43.8
37.3
5
Knowsley
48.6
31.8
34.6
6
Tower Hamlets
48.5
21.2
56.3
7
Liverpool
50.3
32.1
36.2
8
Newham
55.9
21.9
60.8
9
Kingston upon Hull, City of
73.2
38.4
47.5
10
Nottingham
72.9
31.2
57.2
11
Birmingham
56.6
25.4
55.1
12
Sandwell
62.7
31.6
49.6
13
Islington
62.4
21.4
65.7
14
Leicester
58.3
26.2
55.1
15
Waltham Forest
57.2
20.4
64.3
16
Middlesbrough
53.1
33.7
36.5
17
Stoke-on-Trent
60.5
26.9
55.5
18
Wolverhampton
63.3
31.9
49.6
19
Haringey
74.1
21.0
71.7
20
Lambeth
87.5
28.7
67.2

But there are also some very deprived local authorities that have achieved some of the lowest reductions in teenage pregnancy including Knowsley, Halton and Sunderland (see Table 3).

Table 3: The 20 LAs with the smallest % reduction in the rate of teenage conceptions by deprivation rank
Deprivation rank
LA
Teenage conception rate 2000
Teenage conception rate 2015
% reduction in teenage conceptions 2000-2015
88
Cumbria
27.0
20.8
23.0
133
Cambridge
21.8
16.5
24.4
84
Stockton-on-Tees
38.5
28.9
24.9
85
Norfolk
28.5
21.3
25.1
116
Stafford
30.3
22.3
26.5
125
North Yorks
19.8
14.1
28.9
105
Devon
26.0
18.4
29.2
141
Hampshire
23.3
16.5
29.2
137
Hertford
21.6
15.3
29.3
87
Lancashire
35.6
25.1
29.5
124
Gloucester
21.6
15.2
29.6
112
Essex
28.4
19.6
30.9
30
Halton
53.3
36.6
31.3
123
Dorset
22.6
15.3
32.2
32
Sunderland
51.0
34.6
32.2
104
Kent
31.0
20.6
33.6
130
West Sus
24.6
16.2
34.1
117
Poole
31.4
20.6
34.4
5
Knowsley
48.6
31.8
34.6
81
Medway
43.0
28.1
34.7

Finally Table 4 lists the 20 LAs still with the highest teenage conception rates in 2015. Blackpool has reduced its teenage conception rate by less than average and now has the highest rate. Hull has reduced its conception rate by more than average but still has the second highest rate of all English LAs.

 Table 4: The 20 LAs with the highest rate of teenage conceptions in 2015
Deprivation rank
LA
Teenage conception rate 2000
Teenage conception rate 2015
% reduction in teenage conceptions 2000-2015
4
Blackpool
69.9
43.8
37.3
9
Kingston upon Hull, City of
73.2
38.4
47.5
49
North East Lincolnshire
63.6
37.6
40.9
30
Halton
53.3
36.6
31.3
28
Hartlepool
57.4
35.8
37.6
32
Sunderland
51.0
34.6
32.2
31
Barnsley
52.1
33.7
35.3
16
Middlesbrough
53.1
33.7
36.5
55
Redcar and Cleveland
57.0
33.7
40.9
7
Liverpool
50.3
32.1
36.2
25
Salford
53.5
32.0
40.2
18
Wolverhampton
63.3
31.9
49.6
5
Knowsley
48.6
31.8
34.6
38
Doncaster
69.3
31.8
54.1
12
Sandwell
62.7
31.6
49.6
35
Walsall
61.5
31.5
48.8
10
Nottingham
72.9
31.2
57.2
3
Barking and Dagenham
67.5
31.0
54.1
46
Coventry
64.9
29.9
53.9
41
St. Helens
50.7
29.6
41.6

The background data for this analysis including the results for other LAs can be obtained by emailing jonathan.bradshaw@york.ac.uk.




[2] Wellings, C.  et al (2016) Changes in conceptions in women younger than 18 years and the circumstances of young mothers in England in 2000-2012: an observational study, Lancet 388, 586-595