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Why Do Children Move into and out of Low Income: Changing Labour Market Conditions or Marriage and Divorce

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  • Picot, Garnett
  • Pyper, Wendy
  • Zyblock, Miles

Abstract

Child poverty is high on the government's agenda. In order to reduce the rate of low-income among children, one has to either reduce the number of children flowing into low-income, or increase the number flowing out. But what is behind such movement? Most analysts would immediately think of job loss among the parents, but obviously divorce and remarriage can also play a role. In order to favourably alter the flows, one has to have some understanding of what is driving them. This paper asks to what extent this movement of children is determined by (1) changes in family status of the parents of children, or (2) changes in the parent's labour market conditions (i.e. job loss and gain, changes in hours of work or wages). We find that for an individual child, a divorce or marriage can have a tremendous influence on the likelihood of entering or exiting low-income. At the level of the individual, changes in family composition (when they occur) are more important than changes in jobs held by parents. However, changes in family status are relatively infrequent compared to labour market changes. Parents are much more likely to lose or find jobs, and experience changes in hours worked or wages, than they are to marry or divorce. When this is accounted for we find that, in the aggregate, flows of children into and out of low income are associated roughly equally with family compositional changes and changes in wages and hours worked.

Suggested Citation

  • Picot, Garnett & Pyper, Wendy & Zyblock, Miles, 1999. "Why Do Children Move into and out of Low Income: Changing Labour Market Conditions or Marriage and Divorce," Analytical Studies Branch Research Paper Series 1999132e, Statistics Canada, Analytical Studies Branch.
  • Handle: RePEc:stc:stcp3e:1999132e
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    References listed on IDEAS

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    1. Stevens, Ann Huff, 1994. "The Dynamics of Poverty Spells: Updating Bane and Ellwood," American Economic Review, American Economic Association, vol. 84(2), pages 34-37, May.
    2. Mary Jo Bane & David T. Ellwood, 1986. "Slipping into and out of Poverty: The Dynamics of Spells," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 1-23.
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    Citations

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    Cited by:

    1. Martin Dooley & Ross Finnie, 2008. "Welfare Policy, Language Group, and the Duration of Lone Motherhood Spells," Canadian Public Policy, University of Toronto Press, vol. 34(1), pages 37-64, March.
    2. Myles, John & Picot, Garnett, 2005. "Income Inequality and Low Income in Canada: an International Perspective," Analytical Studies Branch Research Paper Series 2005240e, Statistics Canada, Analytical Studies Branch.
    3. Signe-Mary McKernan & Caroline Ratcliffe, 2005. "Events that Trigger Poverty Entries and Exits," Social Science Quarterly, Southwestern Social Science Association, vol. 86(s1), pages 1146-1169.
    4. Burton, Peter & Phipps, Shelley, 2009. "The Prince and the Pauper: Movement of Children Up and Down the Canadian Income Distribution, 1994-2004," CLSSRN working papers clsrn_admin-2009-39, Vancouver School of Economics, revised 26 Jun 2009.
    5. Jenkins, Stephen P. & Schluter, Christian, 2001. "Why are child poverty rates higher in Britain than in Germany? a longitudinal perspective -working paper-," ISER Working Paper Series 2001-16, Institute for Social and Economic Research.
    6. Lisa Kaida, 2015. "Ethnic Variations in Immigrant Poverty Exit and Female Employment: The Missing Link," Demography, Springer;Population Association of America (PAA), vol. 52(2), pages 485-511, April.
    7. Andrew Heisz & Andrew Jackson & Garnett Picot, 2001. "Distributional Outcomes in Canada During the 1990s," The Review of Economic Performance and Social Progress,in: Andrew Sharpe, Executive Director & France St-Hilaire, Vice-President , Research & Keith Banting, Di (ed.), The Review of Economic Performance and Social Progress 2001: The Longest Decade: Canada in the 1990s, volume 1 Centre for the Study of Living Standards;The Institutute for Research on Public Policy.
    8. Kapsalis, Constantine & Tourigny, Pierre, 2002. "Profiles and Transitions of Groups at Risk of Social Exclusion: Lone Parents," MPRA Paper 25751, University Library of Munich, Germany.
    9. Lethbridge, Lynn & Phipps , Shelley, 2006. "Income and the Outcomes of Children," Analytical Studies Branch Research Paper Series 2006281e, Statistics Canada, Analytical Studies Branch.

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