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Family Matters No. 83 - October 2009

Overview: Hard times

Ben Edwards

Abstract

In the context of an economic downturn, where the disadvantaged are more likely to be adversely affected, social inclusion becomes even more important. Articles in this issue address the interaction of policies, services and institutions, and the vulnerable with the employment prospects of those in out-of-home care; the economic consequences for single-parent families of the changes to the child support and the Welfare-to-Work reforms; and how the Victorian legal system has responded to family violence.

When this issue of Family Matters was conceived, the Australian economy was predicted to go into recession. The Treasury predicted unemployment to rise to 8.5% by 2010-11, and the 2009 labour force figures from the Australian Bureau of Statistics had unemployment at a seasonally adjusted 5.8%, up 1.9% from its lowest point in February 2008. Given the unemployment rate was steady from June to July 2009, there is still some uncertainty about Australia's future economic circumstances, the Reserve Bank has now suggested that the effects of the global economic downturn will not be as severe as first anticipated. Despite this, there are likely to be long-term effects from the economic slow-down - with unemployment and long-term unemployment continuing to rise - that will have significant social costs for Australian families. Two of the articles in this issue (Gray, Edwards, Hayes, & Baxter; and Kalil) directly address the potential of the global recession to affect Australian families, while another (Edwards, Baxter, Smart, Sanson, & Hayes) addresses the impact of financial disadvantage on children's readiness for school. While these articles suggest that addressing the needs of the long-term unemployed will be critical, another important lesson is that the vulnerable and disadvantaged are likely to be disproportionately affected by the economic downturn. The provision of quality services such as education and child care may be required to mitigate the effects of long-term unemployment on vulnerable families and children and to reduce the negative intergenerational impacts of this economic downturn. Historically, particular geographic areas have also been more vulnerable to economic downturns, so area-based interventions to address unemployment and the social needs of families and their children may also prove to be useful.

A key focus of the social inclusion agenda is the unintended consequences of how institutions, policies and services can operate to exclude disadvantage groups in society (Hayes, Gray & Edwards, 2008). In the context of an economic downturn, where the disadvantaged are more likely to be adversely affected, social inclusion becomes even more important. Articles in this issue address the interaction of policies, services and institutions, and the vulnerable with the employment prospects of those in out-of-home care; the economic consequences for single-parent families of the changes to the child support and the Welfare-to-Work reforms; and how the Victorian legal system has responded to family violence.

Gray et al. provide a broad-ranging review of the potential impacts on Australian families of the global recession. To provide some context, the paper provides information on the rates of unemployment and long-term unemployment since 1980 to the present day. Gray et al. then point out that several demographic changes mean that this economic downturn will be different for families than in previous years. Women are now engaged in the labour force at much higher rates than previously and, as a consequence, there are more dual-income families. They also point out that single-parent families may be particularly vulnerable in difficult economic times, given their reliance on a single income. Surprisingly, there is little direct evidence of the effect of unemployment in economic downturns on families, but there is fairly good international evidence on the impact of unemployment on families more generally. Gray et al. summarise evidence on the scarring effect of unemployment, and the impact of unemployment on mental and physical health, crime, family functioning and children. Also discussed is the impact of economic downturns on broader contextual factors, such as the geographic concentration of unemployment and disadvantage, housing, and social exclusion. There have been some substantial falls in asset values, particularly in the stock market, and this has flowed through to superannuation balances. Gray et al. suggest that this may have an impact on families, as older workers may delay their retirement.

Kalil also reviews the effects of joblessness, but with a more specific focus on family relations and children's development from a US perspective. She highlights theories that are relevant to investigating child development and family relationships in the context of an involuntary job loss. She reports that large-scale longitudinal studies generally find adverse effects of parental job loss on children's education and long-term employment prospects. Kalil also discusses the implications of mothers' and fathers' joblessness for family relationships and child development, and for families with different ethnic backgrounds.

Edwards, Baxter, Smart, Sanson, and Hayes examine the consequences of living in financial disadvantage on children's school readiness and the role that other risk and protective factors play. The paper is part of a large project commissioned by the Smith Family in 2008. In this paper, the authors report that children from low-income families have lower cognitive and learning skills. When other child, parental and community factors are taken into account, language skills are significantly lower for children from disadvantaged families, but not pre-literacy or pre-numeracy skills. A wide range of risk factors are associated with low school readiness and these are likely to underpin the links between financial disadvantage and school readiness. Children living in financial disadvantage have a greater number of risks for low school readiness than their more advantaged counterparts. The findings make clear that children from financially disadvantaged families are at greater risk of poor school readiness, due to the much higher rates of risk factors evident among this group and the total number of risks experienced.  

Mendes reviews studies examining the employment outcomes of young people leaving state out-of-home care. Employment programs designed to support young people leaving care are described in the United Kingdom, North America and Australia. While these young people are a population that is small in number (there were 4,448 15-17 year olds in out-of-home care at 30 June 2008; Australian Institute of Health and Welfare, 2009), the available research evidence suggests that they may be left with a "legacy of disadvantage" when compared to children growing up in more stable family environments. The current evaluations examining what works in improving employment outcomes of care leavers have some limitations, but they suggest that there are some things that can be done to support this vulnerable group of young people to get a job.

Patulny reports on a study of social contact among retired men and women. He finds that retired men spend less time with family and friends outside of the household than men who are not retired. For retired women the opposite pattern emerges, as they report spending more time with family and friends who live outside of the household compared to women who are not retired.

Judith Peirce, a former Commissioner of the Victorian Law Reform Commission, provides an historical account of factors that have led to the development of the Victorian Family Violence Protection Act 2008. She discusses some of the limitations of the previous legislation and recent developments to establish a more responsive family violence system in Victoria.

Together these articles provide some insights into how the economic downturn and institutions, policies and services can operate to exclude or include the marginalised in society. It is hoped that the lessons in how the vulnerable and disadvantaged may be affected can be used to inform future policies, interventions and practices designed to assist them.

References

  • Australian Institute of Health and Welfare. (2009). Child protection Australia 2007-2008 (Child Welfare Series No. 45). Canberra: AIHW.
  • Hayes, A., Gray, M. C., & Edwards, B. (2008). Social inclusion: Origins, concepts and key themes. Canberra: Social Inclusion Unit, Department of the Prime Minister and Cabinet.