Child poverty in the midst of wealth
Innocenti Report Card 18
In a time of general prosperity, more than 69 million children live in poverty in some of the world’s richest countries.
Poverty is most often defined by income. But for most children, poverty is about more than just money. It is about growing up in a home without enough heat or nutritious food. Poverty means no new clothes, no telephone and no money for a birthday celebration.
These deprivations have consequences that can last a lifetime. Research shows that children in poor families are less likely to complete a good education.1 In some countries, the research indicates that life is eight to nine years shorter for a child born in a poor area than a child born in wealthy area.
Ending child poverty and its consequences is a matter of basic rights and justice.
Report Card 18
The UNICEF Innocenti Report Card 18 reviews the status of child poverty in 43 high income and upper middle-income countries of the European Union (EU) and the Organisation for Economic Co-operation and Development (OECD). It provides data and assesses the progress – or lack of progress – that these countries have made towards eliminating child poverty.
In addition, the Report Card showcases countries’ successes and considers what more can be done to meet the challenge of the Sustainable Development Goals: to end poverty in all its forms, everywhere – including in rich countries.
The foundation of the report is a ranking of 39 countries in the EU and OECD based on their latest available rate of child income poverty and their success in reducing child income poverty over a period of general prosperity. The top ranked countries – those with the lowest rates of child income poverty combined with greatest success reducing child poverty – are Slovenia, Poland and Latvia. At the bottom of the rankings are France, the United Kingdom, Türkiye and Colombia.
Child poverty: The current picture
Overall, in 40 countries of the EU and OECD for which data was available, poverty dropped by 8 per cent over a period of about seven years. In other words, 6 million fewer children lived in poverty in 2021 than in 2014.
The country with the lowest child poverty rate is Denmark, where 9.9 per cent of children are poor. About 1 in 10 children live in poverty in Finland and Slovenia. In contrast, more than one in four children live in poverty in Bulgaria, Colombia, Italy, Mexico, Romania, Spain, Türkiye and the United States of America.
Progress – or lack of it
Overall, OECD countries experienced a period of prosperity in recent years. This period started in the aftermath of the global recession of about 2008–2010 and ended, for many countries, between 2019–2021, with the economic repercussions of the COVID-19 pandemic and the war in Ukraine. From 2012 to 2019, general prosperity presented countries with a golden opportunity to address child poverty. Some countries seized this opportunity, while others let it pass.
Poland, for example, reduced child poverty by 38 per cent. Slovenia, Latvia and Lithuania reduced it by more than 30 per cent. In contrast, five countries – France, Iceland, Norway, Switzerland and the United Kingdom – saw increases in poverty of at least 10 per cent. For the United Kingdom, the increase was 20 per cent.
Prosperity: No guarantee for poor children
The data in Report Card 18 indicate that national wealth does not guarantee that a country will prioritize the fight against child poverty. Indeed, there is only a weak tendency for the wealthiest countries to have lower child poverty rates.7 Countries with similar national incomes sometimes have very different levels of child poverty. For example:
- Spain and Slovenia have similar levels of national income per capita – both on the low end for countries of the EU and OECD. But Slovenia has a poverty rate of 10 per cent and Spain’s rate is 28 per cent.
- Similarly, the United States has a similar per capita national income to Denmark.
- Despite a substantial improvement in 2021, the United States’ average child poverty rate of 26.2 per cent is more than double Denmark’s 9.9 per cent rate.
- Switzerland’s national income per capita is four times higher than Czechia’s, but Switzerland’s child poverty rate is more than 6 percentage points higher.
Cash benefits, also known as cash transfers, to poor families are among the most immediately effective tools for tackling child poverty. During the recent period of
prosperity, some countries chose to increase cash benefits, while others reduced them. Particularly remarkable efforts were made in Greece, Japan, the Republic of Korea, Poland and Türkiye. In the Republic of Korea, per child spending on cash benefits nearly tripled, from 3.1 per cent to 8.4 per cent of gross domestic product (GDP) per capita. In Poland, per child spending on cash benefits more than doubled from 6.6 per cent to 15.8 per cent. In both countries, child poverty decreased dramatically.
However, the amount countries spent on cash benefits did not depend on the size of their economies or the health of government budgets. Despite having more money available, Ireland, the United Kingdom and Mexico spent less on cash benefits in 2010 than in 2019.
Not just money
A lack of money is not the only deprivation that defines a child’s experience of poverty. Severe material deprivation and a lack of housing are also measures of poverty in a child’s life. In the 27 EU countries examined in Report Card 18, millions of children go without adequate heat at home or proteins in their diet. They do not have a telephone or get to go on a holiday, among other deprivations.
In some countries, income poverty is linked to other kinds of deprivations. But in Bulgaria, Cyprus, Greece and Romania, for example, levels of other deprivations are higher than might be expected from the country’s rates of child income poverty. In contrast, fewer than 2 per cent of children in Estonia, Finland, Iceland, the Kingdom of the Netherlands, Slovenia and Sweden experience severe material and social deprivation, which is much lower than the percentage of children who live in poverty in those countries.
Poverty leaves an indelible mark on children’s lives. But prolonged periods of poverty can have a particularly corrosive effect. For example, children who experience persistent
poverty are more than twice as likely to have emotional and behavioural difficulties as children who experienced poverty at one point in time. In 27 EU countries, around one in eight children live in persistent poverty.
In the countries covered by Report Card 18, focusing on national child poverty averages can obscure the unequal ways that poverty effects families based on migration status, ethnicity and ability. In Canada, for example, 37.4 per cent of First Nations children who live on reserves lived in income poverty, compared with 10.8 per cent of non-indigenous children.
In the EU, 37.2 per cent of children whose parents were migrants lived in income poverty compared with 15.6 per cent of children whose parents were citizens of the country.
Supporting children and families
Meaningful and lasting improvements to the lives of children in poor households requires governments to invest in multiple services that touch children’s lives, including education, health, nutrition and labour market policies. Social protection is particularly important for children because they are more vulnerable to poverty and its consequences than adults.
Slovenia and Poland, the top two countries in the UNICEF Innocenti ranking, have made strides in reducing poverty. For Slovenia, the key to success was improving living
standards by increasing the minimum wage. In Poland, the government’s decision to increase cash benefits for families helped to reduce child poverty.
Far too often, however, cash benefits provided to poor families are not generous enough to protect children from poverty. In 21 of the 39 countries with available data, poor families received less support from cash benefits in 2022 than they did in 2012.
In some of the world’s richest countries, much more needs to be done to protect children from poverty.
In 2015, countries around the world signed up to the Sustainable Development Goals, a plan for creating a better world that included a call to end poverty in all its forms, everywhere. In the high-income and upper middle-income countries of the EU and OECD, some progress has been made. However, further critical actions can be taken that will lead to essential reductions in child poverty. These actions include:
Social protection is essential for eradicating poverty – both in its monetary and nonmonetary forms. Through redistributing incomes, it is also a key element of reducing inequality. The countries included in this Report Card have made commitments, for example by ratifying the Convention on the Rights of the Child, to ensuring that all children can benefit from social protection. Several countries provide practical examples of the power of a comprehensive social protection system to contribute to the goal of eradicating child poverty and to protect children during periods of shocks and crises.
Alongside financial support to households with children, the multidimensional nature of child poverty requires a second strand of policy to ensure that all children have access to basic services, beyond the household, that are essential for their well-being and development.
Decent work with adequate pay and conditions offers a vital and dependable source of income for households with children. The success of Slovenia in reducing child poverty has been in part based on effective labour market policies. As well as boosting opportunities for such employment, policymakers should consider a comprehensive set of family-friendly policies that support parents and other caregivers in managing the balance between paid employment and caring responsibilities.
The evidence on the persistence of inequalities in poverty risks for children in many minority groups shows that it requires ongoing attention and effective action. Over and above universal provisions, additional tailored measures need to be taken to ensure that all children, and their households, have access to social protection, key services and decent work.
Effective child poverty reduction policies require governments to place child poverty reduction at the heart of their priorities. Governments also have a critical leading role to play in building broad support for child poverty reduction through the engagement of other actors, including civil society, community leaders, employers, trade unions and non-governmental organizations, as well as of children and adults living in poverty.
The ability to learn from other countries, through comparative international analysis, rests on the availability of high-quality, comparable data. But there are still many gaps in such data. Moreover, data about the depth of child poverty – the poverty gap – are scarce. These shortcomings hamper the meaningful monitoring of children’s income poverty.
We still know surprisingly little about children’s own ideas of what poverty is. When children have been asked, their views and ideas have often differed from those of adults. The opportunity for children to become involved in policy areas affecting their lives is supported by the United Nations Convention on the Rights of the Child. Their potential to do so, and to be competent political actors, has started to be recognized in environmental debates. The time is overdue for them also to have the opportunity to be more actively engaged in debates about child poverty.
Report Card 18 presents current levels and historic trends of child poverty (monetary and multi-dimensional) in 43 OECD/EU countries; projections of future trends in view of current crises; a detailed analysis of policy responses to child poverty in each country; and practical policy recommendations for tackling child poverty.