Children living in low income households

Indicator Description

Percentage of children aged under 18 living in households with equivalent incomes (net of housing costs) below 60% of the 1998 median equivalent household income (net of housing costs).

What We Have Found

Almost two-thirds of children living in sole-parent families were living in low income households, nearly 3.4 times the percentage for children living in two-parent families.

Why This Is Important

Family income and wealth are closely related to educational experiences, opportunities and outcomes - especially when families are poor, when children are very young, and when poverty is experienced over an extended period of time. Income and wealth can affect education outcomes in a number of direct and indirect ways. Income has a direct impact on the affordability and accessibility of those education services for which fees are charged or for which transport or other costs are significant. Increased income and wealth provides access to a wider range of life experiences and to resources that can support learning. Poverty increases the likelihood of poor nutrition and other health problems, housing transience, unstable parent and caregiver relationships, negative peer group influences and other factors known to impact on educational achievement.

Poverty during the early years of childhood is particularly important, with negative educational effects persisting at least into the middle years of schooling even when family incomes later improve. The relationship between income and education outcomes is not linear - increases in household income have significantly greater impacts on education outcomes for children in poor families than outcomes for children in better-off families.

The low-income threshold measure used for this indicator is 60% of the 1998 median equivalent disposable family income net of housing costs. Alternative thresholds of 40% and 50% are also shown.

How We Are Going

In 2000/01, 29.1% of children were living in families with incomes below 60% of the 1998 median equivalent disposable family income net of housing costs. There was a sharp increase in the early 1990s in the proportion of children living in low-income families, and this reached a peak in 1993/94. From 1993/94 to 1997/98, the proportion of children living in low-income families decreased by 24.5%, though there has been a slight increase (5.8%) in this proportion since 1997/98, and it remains above the level achieved in the late 1980s.

If the threshold for low income is reduced to 50% (of the 1998 median equivalent disposable family income net of housing costs), 18.4% of children were living in low-income families in 2000/01.

Children living with one parent are much more likely than those living with two parents to be living in families receiving low incomes. In 2000/01, 66.3% of children living in sole-parent families were living in families receiving an income below the 60% threshold, almost 3.4 times the percentage for children living in two-parent families (19.7%). It is also evident that this gap has widened over time. Whereas the percentage of children living in two-parent families living in families receiving an income below the 60% threshold has decreased by 31.1% since 1993/94, the corresponding percentage of children in sole-parent families has reduced by only 2.1%.

Where To Find Out More

Parental income is one of a cluster of proxy indicators for family processes that influence a student's achievement at school. Another indicators to consider is:

• Education of primary caregiver: schooling

The Ministry of Education has established an Iterative Best Evidence Synthesis Programme to systematically identify, evaluate, analyse, synthesise and make accessible, relevant evidence linked to a range of learner outcomes. Information relative to this indicator can be found in:

• The complexity of community and family influences on children's achievement in New Zealand: Best Evidence Synthesis

References

Biddulph, F, Biddulph, J. and Biddulph, C. (2003). The complexity of community and family influences on children's achievement in New Zealand: Best Evidence Synthesis. Wellington, Ministry of Education.

Mayer, S. (2002). The Influence of Parental Income on Children's Outcomes. Wellington, Ministry of Social Development

Jensen, J., Krishnan, V. (2001). Tracking Living Standards: Is it Done Better by EDY or HEDY? Social Policy Journal of New Zealand #16 July 2001, p127.

Ministry of Social Development (2004). Children and Young People: Indicators of Well being in New Zealand. Wellington, Ministry of Social Development.

Ministry of Social Development (2004). The Social Report 2004. Wellington, Ministry of Social Development.