February 25, 2020

High housing costs in New Zealand are a significant factor contributing to child poverty

High housing costs in New Zealand are a significant factor contributing to child poverty

According to new data, the cost of housing is a major factor contributing to the number of children living in poverty in New Zealand. The figures reveal that other big significant measures of child poverty haven’t changed significantly compared to the year before and the number of people going through material hardship is relatively stagnant. “Child poverty is a long term challenge that will take time to fix, but today's figures show that we've made a great start and are moving in the right direction,” Prime Minister Jacinda Ardern said in a statement. She remains confident the new child poverty targets will be met by the Government.

IZA World of Labor author Furio C. Rosati believes that cash transfers are a popular and successful means of tackling household vulnerability and promoting human capital investment. “Some […] cash transfer programs have focused on both safety net provision and active poverty reduction by including support for household income-generating activities through grants or loans to buy investment goods,” he notes in his article.

According to the figures Rosati consulted, there is also a clear link between poverty and child labor, and cash transfers can reduce child labor if structured well. “Countries with higher GDP per capita tend to have a lower incidence of child labor, while within countries children in the poorest households engage in economic activities at a substantially higher rate than children in higher income groups,” he adds.

The numbers provided by Statistics New Zealand reveal that housing costs contribute to child poverty in a major way. As a direct result of them, almost 67,000 more children live in poverty. In a statement released shortly after the figures were announced, Ardern said that: “Lifting children out of poverty is an important issue to me and to New Zealanders and while there are no silver bullets I will keep pushing for progress.” Officials from Statistics New Zealand have also highlighted that the data does not point to a single measure which can indicate if child poverty in the country is going up or down.

Read Furio C. Rosati’s article Can cash transfers reduce child labor?