Why do children move into and out of low-income: Changing labour market
conditions or marriage and divorce?
by Garnett Picot, Myles Zyblock and Wendy Pyper
Business
and Labour Market Analysis Division
Analytical Studies Branch research paper
series, No. 132
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:
- changes in marital status of the parents of children,
or
- changes in the parent's labour market conditions (i.e. job loss or
gain, changes in hours of work or wages).
The results show 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 marital 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, in the aggregate, flows of children into
and out of low-income are associated almost equally with family compositional
changes and changes in parents' wages and hours worked.
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