To prepare the Rapid Evidence Review, MSD analysts conducted an international literature search and came up with the following:
‘[Blair & Raver (2016)] concluded that in “supporting children’s physiologic reactivity, cognitive control, and self-regulation through parenting- and classroom-based interventions, prevention scientists, policy makers, and practitioners are essentially working hard to alleviate the costs of poverty for human development. Yet it is equally imperative to work further upstream—to lower parents’ and children’s exposure to poverty and associated stressors in the first place.” They suggested two avenues of policy development - supporting families to build higher levels of human capital so as to increase earnings, and to increase income and non-income transfers to families so that they are less likely to be poor.’
Ever-cynical I had a look at the Blair & Raver paper. The quote is accurate but incomplete. Blair & Raver’s concluding sentence is omitted. It reads:
"Two avenues of policy innovation include supporting families in building higher levels of human capital so as to increase earnings and increasing federal and state income and non-income transfers (such as the Earned Income Tax Credit or Section 8 housing subsidies) to families so that they are less likely to be poor."
Do you see what the MSD policy wonks have done? There is a world of difference between a welfare benefit and an Earned Income Tax Credit, so the 'suggestion' was manipulated. They could have left the quote complete and allowed the reader to mentally substitute the In Work Tax Credit. But the IWTC isn't a welfare benefit either.
To be fair, the following finding from Heckman & Mosso (2014) was included in the brief:
"There is little support for the claim that untargeted income transfer policies to poor families significantly boost child outcomes. Mentoring, parenting, and attachment are essential features of successful families and interventions that shape skills at all stages of childhood."
But this was described as being in "sharp contrast" to the "more nuanced conclusion" of Blair & Raver. The conclusion they manipulated.
Unsurprisingly the preordained policy preference was conveniently supported by the evidence brief, and benefit payment rates began their inexorable rise. By March 2024 a sole parent with two or more children was receiving a total average income of $1,107 per week.
But what did the brief omit that might have cautioned against increasing benefits? Only actual New Zealand research.
Commissioned by MSD in 2002, Susan E. Mayer of the University of Chicago wrote an 80-page report, The Influence of Parental Income on Children’s Outcomes, and concluded:
"Research on the source of income consistently shows that welfare income is negatively associated with children’s outcomes. Most (but not all) studies also show that even after controlling for total family income, welfare receipt is still negatively associated with children’s outcomes. This is true for research in New Zealand, Canada and the US. It implies that, although the additional income from welfare may improve children’s outcomes, either parental characteristics associated with welfare receipt or behavioural changes due to welfare receipt hurt children’s outcomes."
Mayer's report is listed in the evidence brief bibliography but never quoted from.
Other highly relevant NZ research derived from Statistics New Zealand’s Household Economic Survey (HES) and the Ministry of Social Policy’s 2000 Survey of Living Standards, Children in poor families: does the source of family income change the picture? was completely overlooked:
"To summarise, the findings show that poor children reliant on government transfers, when compared with poor children reliant on market incomes, have lower living standards and a number of compounding shortfalls that can be expected to place them at greater risk of negative outcomes. The findings suggest a need for policies that have a wider focus than just income support. Such an expanded policy focus would incorporate recognition of the multiple sources of disadvantage of many of these children, and would explore mechanisms designed to connect parents and children to services directed at reducing the likelihood of negative child outcomes."
So more than just a shortage of money is negatively affecting children in benefit-dependent homes. If poor children in working households have better outcomes, then increasing parental employment would be a better strategy than increasing benefits.
I occasionally wonder if Ardern, who claimed to have studied child poverty for six years, read the wealth of material produced by MSD during the late nineties and early 2000s. Had she done so she may have reached the same conclusion as her Labour predecessor, Prime Minister Helen Clark, that work was the best way out of poverty, for parents and their children.
Oddly, the Welfare Expert Advisory Group never asked for advice about whether "increasing the adequacy of welfare benefits" would lead to more children relying on them.
It did. In the six years to September 2024 the number of children dependent on a benefit grew by more than 50,000.
And there's also more violence against children, more school absenteeism, lower childhood immunisation (heaven help the poorest communities if there is a measles outbreak), and lower pre-school attendance ... all mere correlations of course.
Sources
https://www.academicpedsjnl.net/article/S1876-2859(16)00026-7/fulltext
https://www.annualreviews.org/content/journals/10.1146/annurev-economics-080213-040753
https://www.msd.govt.nz/about-msd-and-our-work/publications-resources/journals-and-magazines/social-policy-journal/spj18/children-in-poor-families18-pages118-147.html
https://www.msd.govt.nz/documents/about-msd-and-our-work/publications-resources/research/influence-parental-income/influence-of-parental-income.pdf
https://www.msd.govt.nz/documents/about-msd-and-our-work/publications-resources/research/benefit-system/total-incomes-annual-report-2024.pdf
https://www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/benefit/index.html
Lindsay Mitchell is a welfare commentator who blogs HERE.
4 comments:
Jacinda and MSD are only interested in research that supports their political ideology and preconceptions. That ideology is that everyone should be either a public servant or a beneficiary while "capitalists" and "neo-liberals" are evil. For evidence of that just listen to Jacinda's "comrade speech".
Lindsay is compleling reading. But depressing in many ways. I retired at that sort of income; at the time generous, considerably above a tradesman wage. Where rents fit in is the major factor.But i suspect if the frugality practised by the typical worker family in the 50s was applied, living would be at least equally comfortable. Yet utcome s for children at the time were far better than now.
Robert outcomes were considerably better in the 50s because we still had an excellent education system with effective teaching methods, knowledge based learning with rote learning of the basics , sensible discipline and a strong Work Ethic. All of these have been ridiculed and cancelled along with other traditional values like frugality and it being shameful for being on welfare if you were capable of working.
It was considered similar to stealing since it took from the state monies needed for helping genuine cases of neediness.
Our progressive schools are largely but not entirely responsible for producing work shy people as well as unemployable ones because they lack even the basics of the 3Rs. Before welfare my great grandfather died leaving my grandfather and his mother and several other siblings destitute on barely one meal a day. Education got my grandfather out of poverty giving him prospects of a better life and ability to support the family as a teenager. If you don't work you don't eat was the biblical directive but that has been so ridiculed by 'kind' and 'empathetic ' people who think they are so much wiser. It is actually cruelty .
Lindsay Mitchell- There is a huge issue that needs to be addressed for balance . You quote a solo maother with two children receives a "total average income of $1,107 .00 per week".
IS THE PAYENT FROM GOVERNMENT PRE TAXATION OR TAX PAID?
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