Why Do Children Move into and Out of Low Income: Changing Labor Market Conditions or Marriage and Divorce?

Statistics Canada Analytical Studies Working Paper No. 132

32 Pages Posted: 26 Aug 1999

See all articles by Garnett Picot

Garnett Picot

Statistics Canada

Myles Zyblock

Government of Canada - Demand and Labour Analysis

Wendy Pyper

Statistics Canada

Date Written: April 1999

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 favorably 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 labor 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 labor 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.

JEL Classification: J12, J13

Suggested Citation

Picot, Garnett and Zyblock, Myles and Pyper, Wendy, Why Do Children Move into and Out of Low Income: Changing Labor Market Conditions or Marriage and Divorce? (April 1999). Statistics Canada Analytical Studies Working Paper No. 132, Available at SSRN: https://ssrn.com/abstract=165472 or http://dx.doi.org/10.2139/ssrn.165472

Garnett Picot (Contact Author)

Statistics Canada ( email )

Ottawa, Ontario
Canada
613-951-8214 (Phone)
613-951-5403 (Fax)

Myles Zyblock

Government of Canada - Demand and Labour Analysis

Ottawa, Ontario K1A 0G5
Canada
613-951-5132 (Phone)
613-992-5773 (Fax)

Wendy Pyper

Statistics Canada

Ottawa, Ontario
Canada
613-951-0381 (Phone)
613-951-5403 (Fax)

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