A new report on poverty in New Zealand says that children who grow up in poverty are likely to end up in poverty as adults themselves.

The study, by the conservative Auckland think tank, the Maxim Institute, will be reinforcement for the Government’s social investment approach to social policy which is said by Beehive sources to be a major focus of this year’s Budget.

The researcher, Kieran Madden found that low family income during childhood was associated with

  • Later lower educational achievement
  • Poorer economic circumstances
  • Higher rates of criminal offending
  • Higher rates of mental health problems
  • Higher rates of teenage pregnancy.

Mr Madden says the relationship between low family income and both lower educational achievement and poorer economic circumstances in adulthood, while diminished was significant.

“This indicates that growing up in a poor family poses a barrier to future educational and academic success independently of the child’s academic ability and family context.”

The study found that educational achievement and economic advantage went up as childhood family income rises suggesting “an intergenerational transmission of educational and economic privilege in which increasing childhood family income was associated with increasing educational and economic privilege.”

As far as Government interventions went, the most effective was when children were young.

“Parental income received while children are younger appears to have more impact than later in life, when children reach their teenage years.”

Mr Madden says parental educational attainment is one of the greatest predictors of a child’s educational outcomes.

“Of the 7 percent of children living in households with no formal qualifications, just over half of these households are in poverty. “


The study says worklessness and low earnings are the primary drivers of poverty for families now.

“Low parental qualifications; drug and alcohol dependency; parental and child health problems; and family size and instability” all contribute to and mediate this pathway.

“Jobs, particularly full-time, stable, and for both parents remain the surest route out of poverty for families.

“As such, policy should continue to encourage work for those who can (and need to), while at the same time balancing this imperative with the importance of nurturing children, particularly while they are younger.”

The report concludes that the social security system serves most New Zealanders well, but is deeply failing to help those suffering persistent and intergenational poverty, who face a number of challenges and have complex needs.

“We need imagination to discern policies that go beyond more money, collaboration to work across sectors and ideological divides, and the political will and bravery to pursue long-lasting change.

“It is our responsibility, as researchers and policy-makers, to help forge and refine a policy environment where these families have the opportunities and skills they need to flourish and participate in society, alongside hope that their lives can change for the better.

“More effective employment and education policies are the key to making this a reality.”