Parental Joblessness, Financial Disadvantage and the Wellbeing of Parents and Children

Despite the strength of the Australian economy and the relatively low rate of unemployment, joblessness among families with children remains high in Australia relative to many other OECD countries. Australia also has one of the highest rates of part-time employment among OECD countries, and this is particularly prevalent among employed mothers. Gaining a better understanding of the effect on families with dependent children of joblessness or working only short part-time hours on families with dependent children is important for child policy and service delivery - to the extent that any negative effects on a family’s economic resources and social connectedness, and on the psychological wellbeing of the parents, may negatively affect the wellbeing of children. This report uses data from the first four waves of data from the Longitudinal Study of Australian Children (LSAC) to analyse the links between joblessness/short part-time hours of employment and the wellbeing of parents and their children. Key findings: Joblessness and short part-time employment - According to the LSAC data for children aged 0 to 10-11 years, over the first four waves of LSAC, at the time of the interviews: • Of the children living in couple-parent families 93 per cent had a parent working full-time/long part-time hours, 2 per cent had a parent working short part-time hours (parental employment of 20 hours or less per week) and 4 per cent lived in jobless families. • Of the children in single-parent families 31 per cent had a parent working full-time/long part-time hours, 20 per cent had a parent working short part-time hours and one-half were living in jobless families. Jobless families had on average a lower socioeconomic status (educational attainment, health, unemployment rate in the area of residence, safety of neighbourhood and access to basic services) than families working full-time/long part-time hours. Families working short part-time hours had a socioeconomic status somewhere between that of jobless families and those working full-time/long part-time hours. Single-parent families had on average lower levels of educational attainment and were less likely to come from a non-English speaking background than couple-parent families. Economic circumstances and financial wellbeing: A strong relationship between parental employment and financial wellbeing was found. For both couple- and single-parent families, those in short part-time employment had a lower weekly income than those in full-time/long part-time employment. It was noted that the increase in income in going from jobless to short part-time hours was less than in going from short part-time hours to full-time/long part-time hours. The equivalised parental incomes of jobless couple- and single-parent families were similar, indicating that jobless couple- and single-parent families had similar incomes after adjusting for differences in the costs of living associated with the different composition and size of the families. The overall picture was similar when the number of financial hardships experienced was examined. While there was some reduction in the experience of hardships when moving from being jobless to working short part-time hours, the biggest reduction in the experience of financial hardships came from moving from short part-time hours to full-time/long part-time hours. Analysis of how changes in employment or relationship status related to changes in income revealed quite large increases in income associated with increased parental employment: movements from joblessness, to having some employment, especially to full-time/long part-time hours, and movement from short part-time hours to longer hours were associated with increases in income. Shifts from being a single- to a couple-parent family were also associated with increases in income. Incomes declined when a couple-parent family changed to being a single-parent family and went from working full-time/long part-time hours to fewer or no hours. Social capital: Having strong social connections, participating in community activities and being able to get support and help (social capital) are increasingly recognised as important indicators of wellbeing in the context of socioeconomic advantage or disadvantage. In general, jobless families had the lowest levels of social capital, while families working full-time/long part-time hours had the highest. There was some variation in the level of social capital among those with short part-time hours of employment, although it was usually somewhere between the two other groups. However, once differences in financial wellbeing were held constant, there was no clear pattern in the relationship between parental employment and social capital. Mental health: There was a strong association between parents’ employment and their mental health. The key finding was that jobless parents experienced worse mental health (as indicated by higher levels of psychological distress) compared to parents working full-time/long part-time hours. The difference in mental health between parents working short part-time hours and parents working full-time/long part-time hours was smaller and, when explored further, was explained by other factors, such as financial hardship. There was a significant difference in mental health between single and couple mothers: single mothers, on average, experienced higher levels of psychological distress than couple mothers, irrespective of employment level. Further, it was apparent from the longitudinal analyses of changes in mental health that changing from being partnered to being single was associated with a decline in mental health (that is, an increase in psychological distress), and changing from being single to being partnered was associated with improvements in mental health (declines in psychological distress). Child wellbeing and developmental outcomes: Children living in a jobless family had poorer cognitive and social-emotional outcomes compared to children in families working full-time/long part-time hours. Children living in families working short part-time hours also had poorer developmental outcomes than those in families working full-time/long part-time hours, but the differences in developmental outcome between these groups of children were smaller than the differences when comparing jobless families and those working full-time/long part-time hours. About half of the difference in developmental outcome between children in jobless families and those in families working full-time/long part-time hours was explained by differences in financial wellbeing. Once financial wellbeing was taken into account in the statistical modelling, there were no significant differences in the cognitive or social-emotional wellbeing of children between families working short part-time hours and families working full-time/long part-time hours. The remaining differences in outcomes between jobless families and those working full-time/long part-time hours appeared to be related to differences in the underlying characteristics of families. Child cognitive outcomes did not vary significantly by parental employment once detailed controls for social capital, sociodemographics and local area information were included in the statistical models. While the poorer developmental outcomes for children of jobless families and those working short part-time - compared to full-time/long part-time - hours can be partially explained by parental characteristics such as education level, joblessness does appear to have an effect on developmental outcomes through its impact on financial wellbeing, parental mental health, nature of the neighbourhood, and parenting style. Taken as a whole, the analyses in this report suggest that joblessness and, to some extent, short part-time hours of employment are associated with lower levels of wellbeing for parents and for children, compared to families working full-time/long part-time hours. Lack of parental employment affects children by having consequences for their parents’ finances and mental health. The remaining differences in outcome between families who are jobless or work short part-time hours and families working full-time/long part-time hours are explained to some extent by existing socioeconomic differences that characterise parental employment, which also increase the chances of poorer developmental outcomes for children, compared to families in full-time/long part-time work.