Child Poverty and Policy - A Comparison of New Zealand and Scandinavia

This thesis provides a comparative analysis of poverty among children in New Zealand, Norway and Sweden using the most recent available income data from year 2000. By comparing different countries with different levels of poverty, and differing policies it attempts to say something about the causes of child poverty and evaluate the importance of policy as a remedy. This is done within one theoretical framework and understanding of what poverty is and why it is important. More specifically, the purpose is to explore to what extent policy in the form of benefits (and taxes) explain the differences in child poverty, in this case why children in New Zealand are so much more likely to be poor than those in Norway and Sweden. This is in part done by a process of elimination, where poverty levels before and after taxes and transfers are compared in various sectors of the population divided by demographic, ethnic, educational, employment status and other factors. Even though the picture formed by the findings is complex and far from straight forward, and policy differences cannot explain all the differences, policy variables are fundamental in explaining the differences in child poverty levels. In order to summarize the findings in a more accessible way the last part of the thesis puts together findings from previous chapters by asking a counterfactual 'what if?' question, based on the statistics in chapter 4 and 5. It estimates what the impact would have been on child poverty levels in various groups in the New Zealand community if its policy had achieved the same rate of poverty reduction as the equivalent groups experience in Scandinavia. In the counterfactual chapter the importance of differences across the countries in demographic composition and market income (i.e. the income before government intervention through taxes and benefits) are also tested for. This way of presenting the findings further reinforces the image of complexity with few straightforward causal mechanisms. However, while the thesis shows that many variables play a role in explaining the variation in outcome across the countries, it leaves little room for doubting that much of this variation must be explained by government intervention. There is, in other words, scope for governments to reduce poverty more than the New Zealand policies did in year 2000.