07 May 2009 – Publication of DWP research report 577: “The living standards of families with children reporting low incomes”
This study examines the living standards of children from households who report low incomes, with a particular focus on whether their parents are employed, self-employed, or out of work. The risk factors for being in income poverty, living standards hardship, or both together, are analysed. Longitudinal data is also used to look at the effect of work status, and spells in and out of work, on income poverty and living standards.
The research was carried out by Mike Brewer, Cormac O’Dea, Gillian Paull and Luke Sibieta from the Institute for Fiscal Studies. It uses data from the British Household Panel Survey, Expenditure and Food Survey, Families and Children Study, and Family Resources Survey.
Key findings
- On average, the lowest living standards are found amongst children in households reporting incomes of £100 to £200 per week, which corresponds to approximately 30 per cent to 50 per cent of median income. This represents 11 per cent of all children.
- The one per cent (approximately) of children in households with weekly incomes below £50 have average living standards comparable to those with weekly incomes of £300 to £500 per week, depending on the measure of living standards used.
- The variation in average living standards is greater towards the bottom of the income distribution than towards the top. This means that significant numbers of children in households reporting low incomes have very low, or very high, living standards.
- Some families with children have characteristics with opposite impacts on the risk of income poverty and living standards hardship. For example (when controlling for other family characteristics such as employment status) children in lone parent families have a lower risk of income poverty, but a higher risk of living standards hardship, than children in couple families.
- On average, self-employed families with children have higher living standards than employed families with similar incomes, who in turn have higher living standards than workless families with similar incomes.
- Some, but not all, of these differences are explained by the length of time each group had spent in income poverty.
- Analysis of longitudinal data shows that just under one-fifth (18 per cent in the Families and Children Study, and 19 per cent in the British Household Panel Survey) of children in poverty were in transitory income poverty, when this is defined as not being in poverty the year before, or after, the survey recorded them as being in poverty.
- Transitory poverty is not an important explanation why some families with children who report low incomes have higher living standards than their income suggests. The proportion of children in hardship rises with poverty duration for most of the hardship measures, but not to a substantial degree: a considerable proportion of families remain out of any type of hardship even during prolonged periods of poverty.
Notes to Editors
- This report is published on 7 May 2009 in the DWP research report series (report number 577). It can be found on the internet at http://research.dwp.gov.uk/asd/asd5/rrs-index.asp.
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