Families, Time and Well-Being in Canada

Economics and the Well-Being of Canadian ChildrenPeter Burton and Shelley PhippsDepartment of EconomicsDalhousie University

MotivationEconomics has paid relatively little attention to children

Generally looks at investing in children

Should also study their well-being now, while they are children

What can Economics say about Child Well-Being?Inputs (Access to Resources)Family IncomeParental Time

Outputs Future (Educational Attainment)Present (Childrens Self-Assessed Well-being)Child Well-Being Cant Be Understood Apart from FamilyLimited agency: not economic actors themselves

Rely on sharing of family income

Non-market goods/services very important

Depend on parents for care and cookies

Depend on community for healthcare, parks, etc

Changing Resources Available to Canadian Children, Snapshots from 1971-2006Child poverty has made the news

Changes in Income for Families with Children 1971-2006DecileChanges in Parental Paid Work Hours, 1971 - 2006Consider total parental paid hours (mother + father)

Usual hours per week (most relevant for experience of time crunch)Time and Money PackagesIllustrate for 1971 and for 2006

Curves show average combinations of paid work time and family income for each decile in given yearTime/Money TrajectoriesCurves trace paid-hour/disposable income combinations across time for selected decilesLone MothersHours increased dramatically, now like married mothers in 6th decileMean income like that of two parent families in 2nd to 3rd decile (adjusted for family size)Implications for Child Well-Being?Direct: Smaller Resource Packages (except for richest families)

Indirect: Diminished Parental Well-BeingTime Crunch IndexConstructed from yes / no answers to ten questions, such as:When you need more time, do you tend to cut back on your sleep?Do you feel that youre constantly under stress trying to accomplish more than you can handle?Do you feel that you just dont have time for fun anymore?

Index ranges from 0 to 10 (maximum time stress).

Multivariate AnalysesParental time stress increases with paid work hours and decreases with income

Results hold after controlling for major changes in last decades, age, education, family size, presence of pre-school aged child, immigrant status, region, urban/rural status Parental Life SatisfactionSatisfaction with life as a whole right now, from 1 (very dissatisfied) to 10 (very satisfied)

Only available for 2005

Multivariate Analysis: Parental life satisfaction increases with income but decreases for high hours

Simulation with Multivariate ResultsAn increase from 2 full-time jobs to 2 high-hours jobs requires family income 2/3 higher to avoid lower life satisfaction

Between 1994 and 2006, families in 4th decile working 80+ hours increased from 13 to 21%, average real income growth was only 18%

Summary: Snapshots over TimeTotal paid hours supplied by parents have increased across the income distribution

Largest increases in paid hours for modest income families; no matching increases in real income

Relative growth in time stress and reduced life satisfaction for modest-income parents

Income Histories of Individual Children (with Lihui Zhang)Not just snapshots at a point in time

Follow family incomes over 10-year span

Children 4 to 5 when we first observe them; 14 to 15 by last period

3 cohorts of Canadian children 1994-2004; 1996-2006;1998-2008

Stuck at the Bottom: Secure at the Top?What percent of children who start in bottom quintile when they are 4-5 are again in bottom quintile at age 14-15?

What percent who start in the top stay at the top?29Bottom Quintile 14-152nd Quintile 14-153rd Quintile 14-154th Quintile 14-15Top Quintile 14-15Bottom Quintile, 4-50.490.280.100.080.052nd Quintile, 4-50.290.280.240.140.063rd Quintile, 4-5 0.110.240.290.240.134th Quintile, 4-5 0.070.150.240.340.21Top Quintile, 4-50.050.060.130.200.55Source:NLSCY30Lenses What happens during intervening years?How many children are ever exposed to a position of low income?How many children are always (in all six cycles) in a position of low income?31Source:NLSCYEarly life characteristics associated with always in bottom quintile (probit analysis):In order of size of association, a child is at greatest risk if he/she:Lives in a lone-parent familyHas a parent with no paid workHas a parent who is non-whiteHas a parent with less than university educationLives in a high-unemployment region/time period

33Which changes are associated with movements up or down?Estimate fixed effects models for change in percentile position Explanatory variables are now changes (so ethnicity and immigrant status dropped)34Percentile position changes (in order of magnitude)Becomes a single parent family (22 points)Parent loses paid employment (7 points)Parent becomes a student (3 points)An additional sibling (3 points)Parent gets a university degree (1.8 points)

Provincial unemployment (0.9 points per 1%)Summary: Income HistoriesUse longitudinal data tracking cohorts of Canadian children from 4 to 5 until 14 to 15

Stickiness of relative income position

High level of ever exposed to low income

36Largest starting point risks: parental marital and employment status, regional unemployment, and ethnicity

Largest movements up/down the distribution: changes in parental marital status, employment status, and provincial unemployment rateChild OutcomesWell-being in future (investment)

Well-being nowWhat are the Long-Run Consequences of Growing Up Poor?Children with poor (rich) parents are more likely to be poor (rich) adults. 1/3 of Canadian children born to low-income parents become low income adults (Corak 2006).Compare educational for children who were rich versus poor ten years earlierChild-completed survey privately (at least 12)Subjective Well-Being of Children NowLarge literature on adult happinessRelatively little work on children Economics of Adult HappinessHas focused on association between income and well-being (e.g., Easterlin, 2001; Barrington-Leigh and Helliwell, 2009)

Less attention to time though another major theme is that social interactions are key to well-being (e.g., Helliwell and Putnam, 2004)What about children?Can children assess their own well-being?For example, can they answer a question like: How satisfied are you with your life in general?Psychologists say answers meaningful from about age 8 (Huebner, 2004)Correlated with but distinct from other mental health outcomes; stable over time; predictive of future outcomes

What matters for child happiness?

Mostly similar things matter for parent/kidsHealth/disabilityRelationships (teachers, parents getting along, belonging)Income

TeensParentsLife Satisfaction for Low versus High Income: Summary: Child Well-Being NowIncome matters for both parents and children but larger association for parentsHigh paid work hours of parents associated with lower child happiness (as well as higher parental stress and lower parental life satisfaction)Children greatly affected by relationships within the family/ parents getting along

Policies that Could HelpFamily Resources: IncomeMarket Earnings (problem = stagnant earnings in middle and bottom)Minimum wage policiesSupporting collective bargainingMaking part-time/casual jobs better jobs (in terms of wages, benefits, job security etc)

Government TransfersCanadian Child Tax Benefits helpful, but some countries do better

Poverty Rates for Families with Children in International Context Source: LIS Family Resources: TimePolicies to Help with Time Crunch Remove part-time penaltyQuality/flexibility of daycare/afterschool programmesFlexibility in use of parental leave; compassionate care benefits E.g., Child sick days in European countries

Mediating the impacts through universal public institutions High Quality

Available to all children, regardless of income

Example:Health-careChild-care/After-SchoolEducation

Math Score Below Average at Age 12-14 by Income Quintile at Age 2-4 Source: NLSCY/NLSYHigh-School Not Completed at Age 19-21 by Income Quintile at Age 9-11Source: NLSCY/NLSYChildren in Private School, Percent Age 10 to 17 Source:NLSCY/NLSYSummary/ConclusionsChanges in Family ResourcesSince 1970s stagnant incomes and increasing paid hours in middle/bottom of income distributionIncreasing time stress and lower life satisfaction for parents in middle/bottom of income distribution

Long-term Child OutcomesStickiness of early life income position

Rich/poor differences in aspirations evident by early teens and later educational outcomes

Child Subjective Well-Being NowChild happiness lower in low-income families or when parent work long hours

But, particularly significant channel through parental stress, family functioning, parents getting alongPolicies to helpImproving market earnings for families with modest wagesIncreased redistribution via government taxes and transfersHelping with time crunch Continued excellence in public institutions (healthcare, education, childcare/after-school care) Thank-you!