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Children in poor households to soar by up to 86 million due to COVID-19

By Oliver Fiala (Save the Children) & Enrique Delamonica (UNICEF)

We have updated these estimates with revised projections of economic growth for 2020 and 2021: Coronavirus' invisible victims - Children in monetary poor households 

 

The coronavirus pandemic is triggering an unprecedented social and economic crisis, and while everyone of us is feeling its consequences in our everyday lives, it will be the world’s children who risk being the greatest victims. A joint analysis by Save the Children and UNICEF reveals that without urgent action, the number of children living in monetary poor households across low- and middle-income countries could increase by 11-15 per cent or 63-86 million children by the end of the year. In this blog, we want to share the key results with you and provide a short overview of the methodology we have used.

Children suffer poverty differently from adults. As they are not supposed to earn a living, it is important to assess directly their material shortcoming and deprivations rather their income – in other words measure their child poverty multidimensionally. But in the context of the current pandemic, as parents lose their jobs and source of income, we should also understand what happens to children living in monetary poor and impoverished families.

Up to 672 million children could live in families that cannot make ends meet

Based on our estimates, 586 million children – almost 1 out of 3 children in low- and middle-income countries – have lived in monetary poor households before the pandemic hit. Two thirds of those children live in Sub-Saharan Africa and South Asia.

Without urgent action to protect families from the financial hardships caused by COVID-19, the total number of children living in households that cannot make ends meet in low- and middle-income countries could reach 649-672 million by year-end, an increase by 63-86 million children. Countries across Europe and Central Asia could see the most significant increase, up to 44 per cent across the region albeit from a relative low level. Latin America and the Caribbean could see a 22 per cent increase in the worst-case scenario.

The wonky bit – how did we analyse the impact of COVID-19?

Poverty can be measured in many ways. In our analysis, we estimate poverty as it is defined by national governments (considering the local costs of a minimum basket of goods – national poverty line). In a first step of our analysis, we measure the number of children living in poor households before the pandemic, taking into account the fact that poor families have in most countries more children than richer families. In a second step, we want to estimate how the economic fallout due to COVID-19 impact the number of children living in poor families. We see two main paths:

1. Income effect: We expect severe declines in per capita income due to the economic downturn. We calculate this using country-by-country estimates of decline in total output by the IMF and various regional World Bank assessments, as well as population growth. Various estimates of GDP growth rates give us a range of possibilities for the average income effect per person.

2. Distribution effect: Changes in economic outputs will not impact all people equally and averages hide wide disparities underneath. In the current situation, it is safe to assume the decline in income is worse for the lowest end of the income distribution, an assumption which is strongly supported by recent evidence on the effects of past pandemics on inequality. We use historical trend data on income distribution from the UN WIDER World Income Inequality Database to model various scenarios of income distribution change. This information – accompanied by some sensitivity analyses and robustness checks – gives us a range of possible changes to the income distribution. (More information can be found in the technical note)

As we mentioned above, when looking at child poverty we usually take a multidimensional perspective, looking at children’s material shortcomings and deprivations. During the next few weeks, we will shift our focus there and analyse the impact of the coronavirus pandemic on multidimensional poverty – stay tuned.

Our call to action

To address and mitigate the impact of COVID-19 on children in poor households, Save the Children and UNICEF call for a rapid and large-scale expansion of social protection systems and programmes including child and family benefits and other forms of social transfers such as school feeding – all critical investments that address immediate financial needs and lay the foundation for countries to prepare for future shocks.

Governments must also invest in other forms of assistance, including employment and labour market interventions as well as broader fiscal policy to support families. This includes expanding universal access to quality healthcare and other services and investing in family friendly policies, such as paid leave and childcare. There will need to be a range of policies to support families to safely rebuild their livelihoods after the pandemic.

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