Combating Child Poverty in OECD Countries: Is Work the Answer?

Abstract

Child poverty is on the policy agenda in all OECD countries. One of the main issues in the debate about child poverty is the appropriate balance between the “tax and benefits strategy” (increasing the adequacy of benefits for low income families with children) and the “work strategy” (promoting policies to increase employment among poor families). This article assesses the extent to which child poverty is associated with the work status of parents. It is found that child poverty rates are significantly higher for jobless families than for families with at least one parent in employment, and are significantly higher in single earner families than in two-earner families. The analysis finds, however, that in most OECD countries only a minority of poor families with children are jobless. Nevertheless, jobless families are nearly everywhere the most disadvantaged among the poor, and all countries with very low child poverty rates (less than 5%) have low levels of family joblessness. The article assesses the extent to which child poverty can be reduced by policies which successfully promote higher parental employment, identifying wide variations across countries in the effectiveness of different policy approaches.