Children in families supported by main benefits: an update.

• Author: Wilson, Moira
• Position: Report

Abstract

This paper updates an earlier analysis that examined children's likelihood of being included in a benefit at different ages. We find that up until 2007, children born between 2000 and 2007 were less likely to be included as a dependent child in a main benefit than children born in the 1990s at all ages. The proportion included in a benefit at birth or very soon after fell from around 25% of children born in the 1990s to 20% of children born in 2005 and 2006 and 18% of children born in 2007. Although contact with the benefit system fell, as many as one in five children turning 15 in 2008 are estimated to have been supported by a main benefit for a total of seven or more of their first 14 years of life. An estimated one in ten spent a total of 11 or more of their first 14 years supported by a main benefit.

INTRODUCTION

Between 2001 and 2007 the number of people receiving Unemployment Benefit or Domestic Purposes Benefit in New Zealand decreased substantially. With this decline, the proportion of children aged under 18 whose caregivers are receiving these or other main benefits (2) dropped from an estimated 26% in June 1996 to 19% in June 2007 (Figure l). In June 2007, 205,000 children aged under 18 were included as a dependent child with a caregiver receiving one of the main benefits (Ministry of Social Development, 2008:31). (3) Eight out of ten of these children were included as the dependent child of a sole parent receiving the Domestic Purposes Benefit. Fewer than one in twenty of the children included in a benefit were with a caregiver receiving an Unemployment Benefit, this proportion having fallen from around one in five in 1999. (4)

In this paper we explore the drop in children's inclusion in the main benefits in more detail, updating an earlier analysis by Ball and Wilson (2002), which examined the prevalence and persistence of low family income for New Zealand children based on indicative measures from benefit data. (5) We look at how the proportion of children in different birth cohorts on a benefit at given ages has changed. We also examine changes in the total time children in successive birth cohorts have been supported by the main benefits in their early years.

[FIGURE 1 OMITTED] (6)

DATA AND METHOD

The analysis is based on the Ministry of Social Development's Benefit Dynamics Dataset (BDD), a research data set assembled from historical benefit administration data. (7) The BDD can be used to create individual benefit histories for each child ever included in a main benefit from 1993 onwards. The BDD has a number of strengths, including:

* a relatively long study period--at the time of writing the BDD lets us view and analyse 14 years of benefit history at the individual level

* no sampling error, or response or attrition bias--the data set contains information on all benefit recipients and not a sample, so sampling error, response bias and bias resulting from attrition are not issues for this analysis

* continuous longitudinal data--the continuous nature of the data set means that we are not limited to monthly or quarterly snapshots of benefit status, which means we are able to observe benefit spells of relatively short duration, making our calculations of total time spent on benefit very precise.

As far as we are aware, the combination of these last two features is unusual. Researchers engaged in similar analyses in other countries often rely on fortnightly, monthly or quarterly snapshot data and/or data for only a sample of social assistance recipients (e.g. Bradbury 2006, Gregory and Klug 2002, Platt 2006).

Longitudinal data based on administrative records data does have limitations, including:

* errors in reporting, recording and assembling data--although efforts are made to check and correct for errors, not all can be identified and accounted for

* limited variables for analysis--the data available are limited to information collected or created in the process of benefit administration, one consequence of which is that key socio-demographic information (such as the ethnicity of children included in a benefit) is not recorded

* limited population coverage--the data include no records for caregivers or children who had no contact with the benefit system, and we are required to estimate the size of this group in order to calculate the measures presented in this paper.

The method of analysis is to consider all children born between 1 January 1993 and 31 December 2007 who were included as a dependent child in a main benefit, grouped into calendar year birth cohorts. We calculate indicators of whether or not each of these children was included in a benefit at different ages, and calculate their total duration included in a benefit by given ages. (9) We then combine these calculations with estimates of the total population in these birth cohorts potentially able to be included in benefits to estimate measures of the prevalence and persistence of benefit receipt for the cohorts of children overall (including those not receiving a benefit). The approach we take to this varies depending on the specific measure, and is documented in the text and in notes to the tables and figures presented.

FINDINGS

The Proportion of Children Included in a Benefit at Birth Has Fallen

Figure 2 shows the estimated proportion of children in each cohort included in a main benefit at...