Indicators

Children living in low income households

What We Have Found

Children in sole-parent families were nearly four times more likely to live in low income households when compared to children living in two-parent families.

Date Updated: January 2013

Indicator Description

Percentage of children aged under 18 living in households with equivalent incomes (net of housing costs) below 60% of the 2007 median equivalent household income (net of housing costs), and 60% of the median equivalent household income as it changes year by year.

Why This Is Important

Income and wealth can affect education outcomes in a number of ways. Income has a direct impact on the affordability and accessibility of those education services which charge fees or if transport and other costs are significant. Higher 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 can be particularly detrimental, with negative educational effects persisting at least into the middle years of schooling, even when family incomes 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 low-income families than outcomes for children in high-income families.

How We Are Going

The data for this indicator is calculated in two ways. ‘Fixed’ sees the data in relation to the 2007 median equivalent disposable family income net of housing costs and ‘moving’ sees the data in relation to a shifting median based on the year the data is collected. In 2011, 21% of children were living in families with incomes below 60% of the 2007 median equivalent disposable family income net of housing costs, and 25% relative to the 2011 median. This percentage based on the ‘fixed ’2007 median has almost halved since 2001, whereas the same percentage has only dropped by 5% using the ‘moving’ median. The ‘fixed’ percentage is more significant as it shows a fundamental rise in income for low-income households with children, while the ‘moving’ percentage shows that rise is conjunction with rising incomes in other economic groups.

Figure 1: Percentage of children living in low income households (2001 to 2011)A graph titled 'Percentage of children living in low income households (2001 to 2011)' visually depicting the analysis and description. Click here to go to the indicator's data page.

One parent families are much more likely to be below the low income threshold than two-parent families.  In 2011, almost half of children living in sole-parent families (46%) were living in families receiving an income below the 60% threshold (2007 ‘fixed’).  This is nearly four times the percentage for children living in two-parent families (12%).

Figure 2: Percentage of children living in low income households, by family type (2007 to 2011)
lowincomehouse2

The percentage of children in low income households has declined since 2007 for both family types and the gap between the two groups has narrowed overall. The percentage of children living in sole parent families with an income below the 60% threshold has declined by 9.8% in comparison to a 4.5% decline for all children. However the gap between children in sole-parent and two-parent families in 2011 widened in comparison to the previous year.

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 indicator to consider is:

To obtain information about the accessibility of early childhood education services, consider the following indicators:

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.

Brian Perry (2012). Household Incomes in New Zealand: Trends in Indicators of Inequality and Hardship 1982 to 2009. 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.

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

Ministry of Social Development (2008). Children and Young People: Indicators of Well being in New Zealand. Wellington, Ministry of Social Development.

Ministry of Social Development (2010). The Social Report 2010. Wellington, Ministry of Social Development.

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