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Social Transfers, Changing Family Structure and Low Income Among Children

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  • Garnett Picot
  • John Myles

Abstract

Our aim in this paper is to resolve a paradox. Despite declining real earnings among young adults, there has been no secular rise in child poverty. We show that the relative stability in child poverty is a result of two factors. First, the decline in market income in young families with children has been offset by rising transfers. Since the 1970s, social transfers have replaced earnings as the main source of income among low-income families with children. Second, changes in the fertility and labour market behaviour of young adults have sharply reduced the risk of young children growing up in low-income households. Thus, the upward pressure on low income among children stemming from the labour market has been offset by social transfers, changes in family formation, and the labour market behaviour of young adults. Whether these offsetting patterns will continue in the late 1990s remains to be seen.

Suggested Citation

  • Garnett Picot & John Myles, 1996. "Social Transfers, Changing Family Structure and Low Income Among Children," Canadian Public Policy, University of Toronto Press, vol. 22(3), pages 244-267, September.
    • Handle: RePEc:cpp:issued:v:22:y:1996:i:3:p:244-267
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    References listed on IDEAS

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    1. Steven J. Davis, 1992. "Cross-Country Patterns of Change in Relative Wages," NBER Chapters, in: NBER Macroeconomics Annual 1992, Volume 7, pages 239-300, National Bureau of Economic Research, Inc.
    2. David Card & Richard B. Freeman, 1993. "Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States," NBER Books, National Bureau of Economic Research, Inc, number card93-1.
    3. Rebecca M. Blank & Maria J. Hanratty, 1993. "Responding to Need: A Comparison of Social Safety Nets in Canada and the United States," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 191-232, National Bureau of Economic Research, Inc.
    4. Card, David & Freeman, Richard B. (ed.), 1993. "Small Differences That Matter," National Bureau of Economic Research Books, University of Chicago Press, number 9780226092836, Febrero.
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    Cited by:

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    2. Nezih Guner & John Knowles, 2000. "Marriage, Fertility And Divorce: A Dynamic Equilibrium Analysis Of Social Policy In Canada," Computing in Economics and Finance 2000 352, Society for Computational Economics.
    3. Zyblock, Miles & Lin, Zhengxi & Zhengxi, Lin, 1997. "Trickling Down or Fizzling Out? Economic Performance, Transfers, Inequality and Low Income," Analytical Studies Branch Research Paper Series 1997110e, Statistics Canada, Analytical Studies Branch.
    4. Thomas F. Crossley & Lori J. Curtis, 2006. "Child Poverty In Canada," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(2), pages 237-260, June.
    5. Michael Haan, 2005. "The Decline of the Immigrant Home-ownership Advantage: Life-cycle, Declining Fortunes and Changing Housing Careers in Montreal, Toronto and Vancouver, 1981-2001," Urban Studies, Urban Studies Journal Limited, vol. 42(12), pages 2191-2212, November.
    6. Wen-Hao Chen & John Myles & Garnett Picot, 2012. "Why Have Poorer Neighbourhoods Stagnated Economically while the Richer Have Flourished? Neighbourhood Income Inequality in Canadian Cities," Urban Studies, Urban Studies Journal Limited, vol. 49(4), pages 877-896, March.
    7. Pierre Lefebvre & Philip Merrigan, 1998. "Family Background, Family Income, Maternal Work and Child Development," Cahiers de recherche CREFE / CREFE Working Papers 78, CREFE, Université du Québec à Montréal.

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