Inequality, deprivation, and the UNICEF Report

Dr Eric Crampton
NZ Herald
9 September, 2020

Last week’s UNICEF report on child wellbeing gets one big thing very right. Important parts of government policy are failing children. But the problem is hardly as simple as inequality in household incomes, which UNICEF’s local representative suggested is the root cause.

But let’s first go through UNICEF’s report, and what it tells us.

The report compares OECD countries across 31 different indicators ranging from access to safe water to an adolescent’s self-reported life satisfaction.

But the big league table on child outcomes, where New Zealand ranks 35th out of 38 countries, depends on only six outcome measures: life satisfaction of fifteen year olds, adolescent suicide rates, mortality rates for children aged 5-14, the proportion of children aged 5-19 who are overweight, the proportion of children proficient in maths and reading at age 15 and the percentage of children reporting they make friends easily at school at age 15.

Other measures, like the proportion of children living in lower-income households, the extent of maternity and paternity leave benefits, public spending on cash transfers to families, measles immunisation rates or air quality are more descriptive than explanatory. Together they go into UNICEF’s measures of the overall conditions for child wellbeing.

And while New Zealand ranks alarmingly near the bottom on the chosen outcome measures, it places at the middle of the pack of UNICEF’s less-promoted league table of conditions for child well-being: it is 20th out of 41 countries ranked by policies aimed at children, and by overall economic, social and environmental conditions.

New Zealand’s last-place ranking in child mental wellbeing, one of the three broad categories of wellbeing, was driven by a very high youth suicide rate – only Lithuania was worse. UNICEF’s mental wellbeing score also included the proportion of children reporting high life satisfaction, but that data was not available for New Zealand.

How the two measures were combined to create an overall measure of child mental wellbeing is not stated – it does not appear to be a simple averaging of countries’ rankings across the two measures. Nor does the report explain how New Zealand was ranked in that category when half of the data simply doesn’t exist. New Zealand’s ranking for child mental wellbeing is identical to its poor ranking on adolescent suicide rates: it is 38th out of the 39 countries included in the overall tally.

Perhaps it would not be an issue if places with high reported adolescent suicide rates also reported low rates of life satisfaction among children, so the missing data would not have affected much. But Lithuania, worst in the adolescent suicide statistics, had the eighth highest reported proportion of children with high life satisfaction. Turkey fared worst on the life-satisfaction index but had the fifth-lowest reported suicide rate. The link between adolescent suicide rates and reported youth life satisfaction seems surprisingly weak.

It is anyone’s guess how New Zealand might have ranked overall if the country had reported data on fifteen year olds’ surveyed life satisfaction – along with New Zealand’s overall ranking.

So it’s certainly possible to quibble about the rankings. It seems rather unlikely that a randomly chosen Kiwi family would really be better off in Poland, or Greece or Romania, as the rankings suggest.

But despite that, the statistics do point to real problems. The second highest adolescent suicide rate – ten times higher than the rate reported in Greece – certainly merits concern. It is also a substantial problem that 35% of children aged 15 years do not have basic proficiency in reading and mathematics. While the figure puts New Zealand at the middle of the pack, it is well behind Estonia, Ireland and Finland, where only 22% of children lack that basic proficiency.

And while the proportion of children living in relatively poor households was a few points above the OECD average, putting New Zealand 10th highest, so too was the proportion of GDP provided as cash transfers, services and tax breaks for families, which put New Zealand in 9th place.

Something seems to be missing.

UNICEF NZ’s executive director Vivien Maidaborn last week said New Zealand’s poor showing in the child wellbeing report card came down to inequality. She said: “When we talk about inequality, if we bring it back to real basics, we’re talking about household incomes – and we’ve got to address household incomes.”

But UNICEF’s report already tallies income levels, unemployment rates and cash transfers. If the analysis were undertaken diligently underperformance in the overall outcome measures should not be due to any of those. And UNICEF also tallies one kind of household income inequality because its child poverty measure tracks the proportion of children living in households earning less than 60% of the median income – a relative measure of child poverty rather than an absolute one.

Because New Zealand fares so much worse on UNICEF’s outcome rankings than would be expected by the policy conditions examined, the report urges a bit of caution in interpreting the country’s results. The report warns that context matters.

So, it’s worth looking to what the report may have missed.

Every year, the Ministry for Social Development releases a massive volume compiling New Zealand’s household income statistics. Every year, it points to substantial problems due to a housing shortage.

MSD’s reports reminds us that real material deprivation is more closely linked to after-housing-cost household income than to income before housing costs – and especially where the elderly are more likely to own their own homes, while poor children tend to be in households where housing costs constrain budgets.

The ministry’s reports also demonstrate that the proportion of children living in poverty, by whichever measure of child poverty, is much higher when housing costs are taken into account. An 8% child poverty rate becomes 13% after housing costs; a 15% rate becomes 21%; and a 24% rate increases to 31%.

Reducing real material deprivation facing children, child poverty and all the adverse consequences that come of those require taking the housing crisis seriously – and neither housing shortages nor housing costs feature in UNICEF’s report card.

While UNICEF blamed household income inequality, those statistics, ignoring housing costs, have been flat for about twenty years – although Covid-19 may yet change that. But there is a real inequality story under many of the current problems: the gap between housing’s haves and have nots.

Policy needs to get more serious about measuring and improving performance in New Zealand’s schools so more children learn the basic skills needed for success. Finding and scaling up programmes to reduce New Zealand’s tragic adolescent suicide rates is also incredibly important. Those would address some of the real problems highlighted in UNICEF’s report card, even if its way of building league tables had a few issues.

But addressing the housing shortage is an important and unappreciated part of improving outcomes for kids.


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