Chapter 2: Policy Overview and Policy Impact Analysis
2.2 Summary of policy overviews for all EU Member States
The intention here is to summarise the main features of the problem of child poverty in each of the 27 Member States. These may be gleaned from an examination of the data available and of the policies that are being followed to tackle the problems. We focus on those policies that have been implemented in recent years and that, to a large extent, are not fully reflected in the available data, which mainly relate to the situation in 2006. The concern is predominantly with the risk of poverty (as indicated by the relative number of children living in households where the income is below 60% of the national median) and with the factors underlying this, though those policies that attempt to combat other aspects of the problem of child poverty and well-being are also summarised, insofar as information about these is readily available. This, accordingly, is intended to complement the 11 much more detailed case studies that have been undertaken.65
An important aim of this overview is to bring out the differences that exist across the EU as regards the nature of the problem, the underlying factors and the policies adopted to combat it, as well as the similarities. These similarities include a number of common characteristics:
• Children in most Member States are more likely to be at risk of poverty than other sections of the population.
• Children’s risk of poverty tends to increase as they get older.
• The risk is closely linked to the household structure, and children are much more likely to be at risk in nearly all countries if they live with a lone parent or in a large family.
• Children are also more likely to be at risk if they come from a migrant family – especially if their parents were born outside the EU.
• Whether or not their parents are in work (and, if they are, whether they work full time or part time) has a significant bearing on their risk of poverty.
The extent to which these general features apply, however, varies markedly across the EU, as do the social transfers that exist to support the families and children concerned and the effect they have on the risk of poverty.
The situation in each of the Member States is reviewed, in turn, below.
Belgium
General overview
Some 17% of children are at risk of poverty, slightly more than for the population as a whole (15%), though this is lower than the EU average (19%).
A relatively large proportion of children (15%) live with lone parents, and the risk of poverty is particularly high for them (40%). In consequence, such children make up over a third (35%) of all children at risk.
65 Full country case studies are downloadable from www.tarki.hu/childpoverty, while section 2.1 provides a summary of main results.
A relatively large proportion of children also live in jobless households (10% of the total), many of them with lone parents; they have an even higher risk of poverty (78%, well above the EU average). Children living in these households, therefore, account for almost half (47%) of all children at risk.
Some 10% of children have parents who were born outside the EU. The risk of poverty is relatively high among these children as well (48%), partly reflecting the fact that over half of the households concerned are jobless. Accordingly, migrant children make up almost 30%
of all children at risk of poverty.
The share of the social transfers that go to households with children is broadly in line with their share of the population, while the share of the transfers that go to low-income families is slightly greater than their share of children generally. Transfers have the effect of reducing the proportion of children at risk of poverty by 14 percentage points, the same as the EU average.
A relatively large share of transfers goes to children with lone parents, and these reduce their risk of poverty by 27 percentage points. A large part of these transfers, however, is not child-specific: they take the form mainly of unemployment benefits and minimum-income schemes, which do not necessarily depend on a child being present in the household.
Children living in jobless households and/or in migrant families are most at risk of poverty
Children living in jobless households
One child in 10 lives in a jobless household,66 and overall 78% of them are at risk of poverty, though the figure rises to 86% of children under 6, 91% of those in large families (of three or more children) and 92% of those with migrant parents born outside the EU.
Well over half (54%) of children who live in a jobless household live with a lone parent.
Some 28% of children in jobless households have parents born outside the EU.
A relatively large share of social transfers go to children in jobless households (over twice their share of children) and these transfers reduce the proportion at risk of poverty by 19 percentage points, only 10% of the reduction accounted for by child-related transfers.
Comparison with Germany:
In Germany, as in Belgium, a relatively large number of children live in jobless households (8%), but the proportion at risk of poverty is much lower (61% against 78%).
Much the same share of transfers, however, go to such households; but in Germany their effect is to reduce the proportion of children at risk of poverty by almost twice as much (36 percentage points) as in Belgium.
This may partly reflect the level of benefit paid; but probably of more significance is the larger amount of income in Germany that arises from other sources (especially from capital income), which raises the income of the households to closer to the poverty threshold.
Children living in migrant families
One child in 10 has parents who were born outside the EU. Almost half of these are at risk of poverty and they make up 28% of all children at risk of poverty.
More than a quarter of migrant children live in a jobless family, and 92% of these are at risk of poverty.
66 This result is based on the EU-SILC survey. The corresponding figure obtained from the LFS data is – as might be expected – slightly higher (11.8%), since the concept of ‘joblessness’ within the LFS is less restrictive than in the EU-SILC (no employment in the four weeks preceding the date of the survey, compared to no employment in the preceding year).
Social transfers to migrant households with children reduce the proportion at risk of poverty by 30 percentage points, two-thirds of the transfers being child related.
Comparison with Austria:
In Austria, 15% of children live in a household where both parents were born outside the EU. Their risk of poverty, however, is lower than in Belgium (35%, as against 48%). This reflects the fact that only a third as many children live in a jobless household in Austria (9%) as in Belgium (27%).
Adequacy of the policies in place
It is a policy objective in Belgium to reduce the proportion of children who live in jobless households from 10% to 7% by 2010 – an objective that will be hard to meet, thanks to the economic recession. The way in which this objective is pursued is largely through active labour-market policies to increase employability and to help the parents concerned into work. To be successful, however, it also requires jobs to be available.
Labour-market policies are combined with a planned extension of childcare places67 and the various options for parental leave, as well as ‘making work pay’ fiscal incentives targeted at low-income families. A number of studies have shown, however, that the use of childcare remains lower among low-income families and migrant households than among the rest of the population. The challenge for government is, therefore, to improve the access of such families to childcare, as well as to create new places (especially outside school hours).
The 2008 increase in family allowances paid to single parents with low income might also help to reduce the risk of poverty among jobless households, over half of which are lone parents. At the same time, an increase in benefits may reduce the incentive to find work, and so, in the longer term, have a detrimental effect.
Any policy that aims to help jobless households needs to take account of the specific case of children with migrant parents, given their relatively large numbers. So far, however, no concrete measure specifically directed at tackling the problem of child poverty among the migrant population has been implemented at the federal, the regional or the local level.
Bulgaria
General overview68
Some 30% of children are at risk of poverty – one of the highest figures in the EU, and much higher than for the overall population (22%).
The children who are particularly at risk of poverty are those living in large households (with three or more children): the rate is 71%, almost three times the EU average for such households and more than double the average national rate for children.
Children who live in jobless households are even more at risk: the rate climbs to almost 90% (as against an EU average of around 70%). These account for almost 13% of all children and close to 40% of those at risk of poverty.
Children who live in households where someone is employed but where work intensity is low are also at relatively high risk, the rate being around 63% (again much higher than the EU average).
67 The government target is to reach the objective defined in the context of the Lisbon strategy, i.e. to increase the number of children aged under 3 receiving childcare to 33% (the share was 28.4% in 2007).
68 Only a general overview is presented here: no detailed analysis of the EU-SILC data can be provided, because the data for this country were not available at the time of the analysis.
Conversely, when everyone in the household is in full-time employment, the risk of poverty is extremely low (3%, below the EU average), emphasising the wide disparity in income between people with jobs and those without.
Social transfers are relatively small, and reduce the proportion of children at risk of poverty by only 4 percentage points – less than a third of the EU average. The subsequent increases in the amount of transfers described below, however, should change this.
Adequacy of the policies in place
One of the priorities of the government is to reduce the intergenerational transmission of poverty and social exclusion. A strong focus is placed on early childhood initiatives to improve the quality of life of children. The aim is, on the one hand, to improve the situation of families with children (access to employment, reform of the social insurance system and family and social assistance) and, on the other, to extend community-based social services.
Moreover, specific objectives have been set to reduce the overall risk of poverty among children by 2010 (both in total and for those living in households with three or more children), as well as to cut the proportion of children living in jobless households.
In order to encourage female participation in the labour market, legislative amendments to protect the rights of mothers returning to work after pregnancy are planned, as is the introduction of paternity leave.
Employers hiring unemployed single parents with children under 4 already receive a subsidy for up to 12 months.
In 2007, the government introduced one of the longest periods of compensation for pregnancy and birth in the EU, increasing the duration from 135 days to 410 days (during which time mothers receive 90% of their average earnings in the six months preceding the leave). In 2008, the birth allowance was also increased significantly – to EUR 128 for the first child (25% more than in 2007) and to EUR 307 for the second child (a three-fold increase), while the rate for the third child (and subsequent children) was doubled.
There appears to be a marked geographical imbalance in the availability of childcare – partly as a result of migration from the countryside to the cities, which has led to the closure of pre-schools in small towns and villages and a shortage of places in larger cities.
The Social Investment in Children programme, introduced in 2007, is targeted at the poorest children (mainly of Roma origin), and provides families with social allowances, managed by a social worker, to cover school and pre-school fees and meals at school.
A national action plan for the integration of Roma (the Decade of Roma Inclusion 2005–15) was introduced a few years ago, but further measures are required in many areas (in particular employment, education, social services, childcare, healthcare and housing) if full integration is to be achieved. Various initiatives are planned in this regard, including the provision of services to improve working and family life, measures for the educational integration of children (the Centre for the Educational Integration of Children and School Children from Ethnic Minorities was created in July 2006), a special package of measures for women of ethnic minorities who did not complete their education and action to improve housing conditions.
Czech Republic
General overview
The at-risk-of-poverty rate for children – at 16% – is considerably higher than the figure for the total population (10%), but still lower than the EU average (19%).
As in other countries, the risk of poverty among children is very high among those children who live with a lone parent (45%), though also for those in large families (31%); such children together make up 57% of all children at risk (as against 25% of all children).
The risk of poverty is especially high for children with parents who have a low level of education (around 50%), but these represent a small share of all children (5% of all children, though 20% of those at risk of poverty). Many of these belong to the Roma community.
The risk of poverty is also very high for children living in a jobless household (84% of those children at risk) and, though these account for only 8% of all children, they make up 43% of those at risk.
The share of social transfers that go to households with children is around 21%, only slightly larger than the share of children in the population and broadly in line with the EU average. Some 30% of these, however, are targeted at children in families with income below the poverty line, i.e. almost twice their share of children, and one of the highest figures in the EU. Moreover, around two-thirds of these transfers go to children living with a lone parent or in large families (a third each).
Social transfers reduce the proportion of children in poverty by some 14 percentage points (which is in line with the EU average), though the figure is larger for those in single-parent households.
Children living in jobless households are the most vulnerable
Among children living in jobless households, the most vulnerable are those who live with a lone parent or in large families: together, these categories account for 83% of all children in jobless households. The risk of poverty is 83% for children in jobless single-parent households and 100% for those in jobless households with three or more children.
Around 22% of social transfers go to children in jobless households – almost three times their share of all children.
These transfers, however, are not particularly concentrated on children in those households at risk of poverty, with the result that the effect of transfers on the proportion of children in those households at risk is relatively small (reducing it by 14 percentage points, as against an EU average reduction of 23 percentage points).
Comparison with Estonia:
The risk of poverty among children living in jobless households is virtually the same in Estonia as it is in the Czech Republic, but the fact that the proportion of children living in such households is over twice as great in the Czech Republic as it is in Estonia means that these households represent a much larger part of the policy problem in the Czech Republic, accounting for 43% of all children at risk of poverty there, as opposed to just 18% in Estonia.
Adequacy of the policies in place
There is no specific strategy for combating child poverty and social exclusion.
Nevertheless, children at risk of poverty are the recipients of a relatively large share of social transfers, as indicated above.
This partly reflects the relative concentration of child benefits on children whose families have a relatively low level of income. In 2006 (the year to which the EU-SILC data cited above relate), child benefit was limited to families whose income was less than three times the minimum-income level. In January 2007, however, this was raised to four times the level.
The 2007–13 ‘pro-family package’ consists of the following measures:
• tax allowances for employers providing or subcontracting out care for the children of their employees;
• fiscal incentives to encourage employers to take on parents caring for children in part-time jobs;
• an allowance (of 70% of earnings) paid to fathers for seven days after the birth of a child, to encourage them to help care for the child.
To help support family responsibilities, parental benefits, payable to either parent taking care of a child on a full-time basis, were almost doubled in January 2007 (the standard rate up to the child’s 36th month is EUR 319 – i.e. 40% of the public sector average wage). (The birth allowance was also doubled in 2006 – to EUR 653.)
The government, however, is currently planning to reduce the amount and to change the structure of both the parental benefit and the birth allowance, in order to cut social expenditure and reduce the budget deficit. This move is likely to increase the number of children at risk of poverty.
In 2007, less than 3% of children under 3 years of age used formal care, reflecting the relatively high level of support given to parents taking care of their children. Once children pass the age of 3, most of them (76%) go to public pre-school.
Denmark
General overview
At under 10%, the proportion of children at risk of poverty in Denmark is the smallest in the EU (and is less than for the population as a whole (12%)).
The at-risk-of-poverty rates are highest among children living with single parents (17%) and in large families (15%), but the figures are still well below the EU averages.
As elsewhere, the risk of poverty is high among children living in jobless households, and these make up just over a third of all children at risk.
While children as a whole receive a much smaller share of social transfers than their share of the population (15%, as against 23%), the transfers that go to children are heavily concentrated on those with income below the poverty threshold (who receive almost twice as much as their share of all children).
The proportion of children at risk of poverty before social transfers is anyway relatively small (only around 24%), but transfers reduce this by a further 14 percentage points (similar to the EU average). Most of the transfers concerned, however, are not specifically child related (64%, twice the EU average proportion).
A high employment rate among women and generous social transfers are major factors behind the low risk of poverty among children
Only 7% of children live in jobless households, and only a further 3% live in households with work intensity of under 0.5. The at-risk-of-poverty rate in both cases, however, is relatively high, especially in the former (49%). A substantial proportion (40%) of children who live in workless households with income below the poverty line have parents who were born outside the EU. Nevertheless, a disproportionate share of social transfers goes to children in jobless households (almost four times their share of all children). These transfers serve to reduce the relative number at risk of poverty considerably (by 46 percentage points, twice the EU average for children in such households).
Over half of all children live in a household where everyone is in employment – twice the EU average (27%) and (with Slovenia) the highest figure in the EU.
Some 75% of children have a mother in employment, the majority in a full-time job. Again, this figure is among the highest in the EU. It applies to children under the age of 3, as well as to older children – the result of an extensive system of childcare.
The risk of poverty among children with a working mother is very low (only 3%), even if the mother works only part time (4%).
At the same time, the at-risk-of-poverty rate for children whose mothers are not in work (27%) is also well below the EU average (35%).
Comparison with Slovenia:
In Slovenia, as in Denmark, over half of children live in a household where everyone is employed full time. The proportion of children at risk of poverty is small in both countries (around 3–4%).
The risk of poverty among children in jobless households is, however, much higher in Slovenia (76%, as against 49%), which seems attributable to the lower level of social transfers. Perhaps partly as a consequence, fewer children live in such households in Slovenia, and consequently they account for a smaller proportion of the total at risk (27%, as against 35%).
Adequacy of policies in place
Childcare provision is extensive in Denmark: 63% of children under the age of 3 receive formal childcare, and almost all children aged 3–5 (96%) are enrolled in pre-school or day-care centres.
Maternity leave is payable for four weeks before confinement and for 14 weeks after, and benefit is calculated on the basis of the hourly wage and the number of hours worked per week (up to EUR 471 a week). Fathers taking paternity leave are entitled to payment for two weeks in the 14 weeks following birth. After the 14th week, both parents share paid leave of 32 weeks, which must be taken before the child turns 9. During parental leave, an amount equivalent to 60% of the unemployment benefit is payable.
Family allowances were increased significantly in 2008 (especially for children aged under 3). Single parents receive an additional allowance of EUR 52 a month.
Despite the high employment rate, a Tax Commission has been established by the government to consider ways of reducing taxes on earned income, in order to increase work incentives (though this will have no effect on the (few) households below the tax threshold).
Funds have been allocated to improve socially disadvantaged housing estates, while government efforts have also been made to achieve a more balanced composition of residents in such housing estates. Furthermore, a pilot scheme to provide financial support and permanent housing for people with social problems was made permanent in January 2009.
Germany
General overview
Some 14% of children are at risk of poverty – marginally below the figure for the population as a whole (15%) and well below the EU average (19%).
Around 14% of children live in single-parent households, well above the EU average (11%), and 39% of these are at risk of poverty. Such children, therefore, account for almost 40% of all children at risk.
Risk of poverty for children is increased if they live with mothers aged below 30 or have parents born outside the EU.
The share of social transfers that go to children is larger than their share of the population, and a relatively large proportion of those transfers goes to children at risk of poverty, as well as to those aged below 6 and single-parent families.
Social transfers reduce the risk of poverty among children by 16 percentage points, largely through child-related benefits.