Childhood poverty dynamics in Australia, 2001–2017

Stream: Poverty
Date: Monday, 9 September 2019
Time: 11.30 am – 12.30 pm

Abstract

In a given year, about one in seven Australian children are poor. Social scientists have consistently found that experiencing poverty during childhood is associated with a range of negative outcomes throughout the life course, including lower educational attainment, lower earnings in adulthood, and worse physical and mental health. Using 17 years of longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey and a dynamic random effects probit model, this paper:
(1) tests whether several individual, parental, and contextual factors predict poverty for children in a given year,
(2) estimates childhood poverty entry and exit rates, and
(3) assesses the state dependence of childhood poverty.

Parental education, experiencing a parent moving out, and a parent experiencing unemployment are among the most important correlates of childhood poverty. Furthermore, I find significant evidence that childhood poverty is state dependent. That is, even after controlling for many observable characteristics and unobserved heterogeneity, being poor in a given year increases the likelihood of experiencing poverty in the following year by roughly 12% on average. Thus, while persistent poverty is certainly not the norm among Australian children, the relative ‘stickiness’ of poverty over time provides challenges for families who fall into poverty and for policymakers concerned about the overall level of child poverty and its effects on a range of relevant outcomes.

Author

Matthew Curry (Presenter), University of Melbourne
Dr Matthew Curry is the Ronald Henderson Research Fellow in labour economics, jointly appointed at the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne and the Research and Policy Centre at the Brotherhood of St Laurence in Melbourne, VIC. He studies the causes and consequences of inequality and mobility in education and labour markets. His recent work has appeared in academic journals such as European Sociological Review, Social Science Research, and Research in Social Stratification and Mobility.