Poverty could afflict more than one-in-five children in State by year end

More than one-fifth of children could be left living in poverty in Ireland if the economy fails to recover swiftly from the Covid-19 pandemic, a study by the Economic and Social Research Institute (ESRI) has indicated.

The think tank’s research estimates the impact of large-scale job losses arising from the outbreak and subsequent shutdown on the child poverty rate here, defined as the percentage of children living in households whose income is less than 60 per cent of the national median.

In the worst-case scenario, which assumes no economic recovery and widespread job losses persisting until the end of the year, the poverty rate among children increases from 16.6 per cent at the beginning of the year to 21.1 per cent by the end of 2020.

The more benign scenario assumes a rebound in the economy in the second half of 2020 with 61-82 per cent of workers who were laid off during the lockdown returning to employment by the end of September.

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Income support

In this case, the percentage of children living below the poverty line would rise to 18 per cent by the end of the year.

Both scenarios assume the Government’s income-support measures, the pandemic unemployment payment (PUP) and the temporary wage subsidy scheme stay in place for the entirety of 2020.

“Child poverty is a concern for policymakers as poverty has negative short-run effects on children and can also induce long-run negative effects that persist into adulthood,” the ESRI’s report said.

“There has been extensive research on the negative consequences of child poverty across a wide range of domains, from academic outcomes to health, socialparticipation and socio-emotional outcomes,” it said.

The study noted that after the 2008 financial crisis children in Ireland suffered the worst outcomes on all poverty measures.

Deprivation rates

While headline income poverty rates did not change dramatically – because the national median income fell sharply – basic deprivation rates, the inability to afford basic goods and services, soared.

Basic deprivation levels of children rose substantially, from 16 per cent in 2008 to 32 per cent by 2013, it said, while children in one-adult households or in households where the head of the household was unemployed experienced the highest rates of deprivation, exceeding 60 per cent at the peak of the previous recession.

"Emergency income support measures, such as the pandemic unemployment payment and the temporary wage subsidy scheme, have supported families during the pandemic," the report's author Mark Regan said.

“However, even with these measures in place for the remainder of 2020, we can expect to see child poverty levels rising by an average of one-quarter in the absence of some economic recovery.”