America’s children are the silent victims of the Great Recession

http://economistsview.typepad.com/economistsview/2013/10/americas-children-are-the-silent-victims-of-the-great-recession.html

http://milescorak.com/2013/10/08/americas-children-are-the-silent-victims-of-the-great-recession/

October 8, 2013

The Great Recession has disrupted the lives of families and their children in an unprecedented way.

It has changed everyday life in some ways that can be measured by money, but in others that cannot, and at the extreme it has even led to a six-fold increase in the risk children will be physically abused.

Lost jobs, falling incomes, and foreclosures will likely compromise the capacity of children to become all that they can be, with the effects of the recession echoing not just across years, but also across generations.

Recessions do not normally figure into the way economists think about the factors determining the adult prospects of children. Unemployment spells are usually short, temporary events. In gauging the capacities of families to invest in and promote the capabilities of their children, it is important to look past the changes in incomes that result, and focus on the long-term, more permanent, resources available to parents.

Family income measured in any single year is, for example, not a good predictor of the adult incomes of children, but an average over, say, 10 years offers a better picture of family wealth, and is much more strongly associated with adult outcomes.

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The loss in income matters, but so do the other accompanying changes that will also influence the way they lead their lives. The Great Recession has certainly caused major, long-term income losses for many families, but this matters all the more because it was associated with the bursting of a housing bubble that unleashed an unprecedented number of foreclosures.

This means some children are not only living in poorer families, but that they also face the disruptions associated with changing schools, neighbourhoods, and even cities. Frequent moves and a repeated loss of friends and networks lowers high school graduation rates, and the adult incomes kids will ultimately earn.

The Great Recession didn’t just deplete bank accounts and disseminate home equity; it also ushered in a major crisis of confidence. Family life, even among those who did not experience job loss, is much more stressful, making parenting a bigger challenge.

Children benefit most from a so-called “authoritative” parenting style, a loving and warm relationship that also offers clear expectations of behaviour and accomplishment. But financial strain, whether subjective or not, taxes the energies of parents, and raises the likelihood of “authoritarian” behaviour, which involves strict adherence to rules, and unfair punishment to enforce them.

A telling, if extreme, example is a recent finding that during the Great Recession children have been more likely to fall victim to physical abuse.

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