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Children in times of economic crisis: lessons from the past and policies for the future

Written by Caroline Harper, Nicola Jones

By Caroline Harper, Nicola Jones, Jessica Espey

How do economic shocks, in particular the current economic downturn, affect the wellbeing of children? And what can be done to minimise harm? Recent research by the Social Development Programme, in partnership with UNICEF and Chronic Poverty Research Centre, has explored these questions and, drawing on lessons from the past , has drawn out  some initial policy implications. We highlight that, in the context of economic crisis, it is often hard for governments and policy makers to prioritise long-term investment and to maintain social expenditure. But, given that a major share of the cost of the financial and economic crisis will be borne by hundreds of millions of people who have not shared in the benefits of recent growth (like poor women, children and young people) , focussing on  these vulnerable groups is vital, particularly as evidence from past crises shows  us that children are severely affected by economic shocks.

The outlook
New estimates from the World Bank suggest that slower economic growth owing to the current economic crisis will trap 46 million more people than expected on less than US$1.25 a day. The World Bank also estimates that an additional 1.4–2.8 million children will die between now and 2015 if the crisis continues unaddressed. But child and infant mortality is not the only danger. Experience from previous economic crises (such as the 1997 East Asian Financial Crisis, Peru in the late 1980s, the Argentine crisis of 2000 etc.), suggests  there are likely to be increases in: child illness; child labour and exploitation; violence against children, women and other forms of abuse. Alongside this are: declines in school attendance and the quality of education; nurture, care and emotional wellbeing.

Irreversible effects?
All the above not only affects the individual and household, but also feeds back into the economy and society as a whole, especially when individuals cannot recover – and there is evidence that frequently they cannot. Nobody can dispute the benefits of higher levels of education on labour markets, fertility, participation in society and women’s empowerment, among other factors. Policy is critical to recovery: in part because of the policy choices adopted, South Korea and Indonesia both recovered quickly from the Asian crisis. Substantial national social protection systems were put in place to cushion populations from future economic shocks. These responses, plus a range of economic and social policy interventions (even if not that well targeted), helped protect many households (especially children) from the worst impacts of the crisis.

Recommended responses
Obviously the changing macro-economic environment affects the scope and scale of the policy response governments can put in place. National governments have, broadly speaking, four clusters of policy choices available to them through which to tackle rising poverty and vulnerability: fiscal stimulus; social protection and investment labour and aid policies. To address the specific nature of child vulnerabilities, it is critical that the various policy instruments selected by governments and donors are approached with an acute awareness of  gender and child-related issues  Our recent research suggests that the following are the best means by which governments can protect children from the crisis:

  • Fiscal stimulus packages. These need to include not only investment in education, health, nutrition, water and sanitation, but also programmes to support parents and communities to care for and protect children from violence and neglect.
  • Social protection measures are vital to address vulnerability and inequality. In this regard, cash transfers, although still very small scale and not always well targeted in low-income countries, remain a vital measure.
  • Social health insurance. This is particularly important given the severity of children’s vulnerability to infant mortality and morbidity in these contexts.
  • Child protection measures can be effectively integrated into existing social protection programmes. These should be seen as a priority, going well beyond orphans and vulnerable children to include all children living in poor and vulnerable households.
  • Food-related measures require effective monitoring to ensure availability and visibility, with specific targeting of those most at risk, including pregnant women and nursing mothers. But focusing on nutrition alongside health, sanitation and water services is also critical.
  • Labour market policies must be made more socially responsive in order to take into account the changing working patterns of parents in the wake of the economic crisis. Well-managed subsidised crèches, after-school care and flexible working all help support poor families.  
  • Aid flows must be maintained and a focus on social expenditure prioritised. Managing this in the context of multi-donor budget support needs urgent consideration and more consistent monitoring and knowledge management.

Last, but not least, it is important to recognise our moral duty to act. 2009 is the 20th anniversary of the United Nations Convention on the Rights of the Child. If we are to honour this anniversary - and renew our commitment to uphold the rights of children - we need to start by implementing protective measures and by proving for their future wellbeing in the face of economic crisis.