Changes in Poverty Status and Developmental Behaviours: A Comparison of Immigrant and Non-Immigrant Children in Canada - August 2000

2.1 Child poverty in Canada

In 1998, almost 1.3 million or 18.8% of children in Canada under 18 years of age were living in poor families¹ (Statistics Canada, 2000). The rate of children living in poverty fluctuated during the past two decades. The rate was 21.9% in 1973. By 1989, it had been reduced to 15.2%. Then it climbed once again to 21.3% by 1996 before turning downward in 1997 (Statistics Canada, 2000; Zyblock 1996).

Several forces influence child poverty trends in Canada. Economic growth or recession is a driving force affecting fluctuations in the rates of poverty. Government transfers and income taxes also influence changes in poverty rates. In addition, poor families tend to be families headed by young parents or lone mothers (Hatfield 1996; Sharif and Phipps 1994). Demographic changes, including decreasing family size, increasing average age and educational level of parents, and growing number of earners per family, tended to push the overall poverty rate downward (Dooley 1994; Picot and Myles 1996). However, increases in the proportion of children living in lone-parent families offset the benefits of economic growth and demographic changes (Dooley 1994; Zyblock 1996).

At the individual level, changes in family composition tended to have a stronger impact on transitions into and out of lower-income status than did changes in family incomes due to labour market events (Statistics Canada 1998). However, income changes were more frequently due to transitions in parental labour force activities than to family compositional changes. An empirical study found that between 1993 and 1994, for the population of children as a whole, both factors contributed almost equally to the shift of children across the low-income line (Picot, Zyblock and Pyper 1999).

The increase in dependency on government transfers as a source of income for poor families has been dramatic (Zyblock 1996). Since the 1970s, government transfers have replaced market earning as the major income source of poor families (Picot and Myles 1996). For instance, the

proportion of income from social transfers increased from 59.7% in 1975 to 71.3% in 1992 for poor, lone parent families, and from 26.7% to 42.9% for poor two parent families (Zyblock 1996).

2.2 Poverty and child development

A substantial body of literature documents the detrimental effects of poverty on children's physical and mental health, academic achievement, and other developmental outcomes. Poverty compromises access to material necessities, as well as the fulfilment of basic developmental needs such as safety and stability. Poor parents often have difficulty supplying their children with the best foods, with adequate clothing and housing, with appropriate child-care alternatives when parents are out working, with good education, with stimulating experiences such as books, toys, and outings, and with safe and pleasant residential neighbourhoods (Schor and Menaghan 1995). Poverty also brings with it a high risk of exposure to harmful environmental conditions and stressful events (McLeod and Edwards 1995). Children in poor families often experience high residential mobility; frequent relocations of schools disturb children's academic routines, while the loss of familiar neighbourhoods may give rise to disturbances in peer relationships (McLoyd and Wilson 1991).

Empirical studies suggest, however, that, net of the effect of child and parental characteristics, poverty exerts a relatively small impact on children's development (Duncan et al. 1994; Gotlib and Avison 1993; Smith et al. 1997). This may be accounted for, to a certain degree by government interventions. In Canada and the United States, most poor families can meet basic material needs for food, housing, and health care through governmental transfers and programs, although homeless and hunger still affect some Canadian children. Nevertheless, relatively few poor children suffer the extremes of material deprivation which cause physical or social disadvantages (Canadian Council on Social Development 2000; Mayer 1997).

Although poverty is a risk factor for children's health and well-being, not all poor children succumb to mental illness and developmental problems. Researchers have developed various frameworks to examine why some children in poor families are hit harder than others. In particular, developmental psychologists are interested in factors that moderate or mediate the impact of poverty. Sociologists and economists pay more attention to variations in the chronicity and severity of poverty, and to contextual influences on children in poverty.

Some developmental theorists focus on the functions of child and familial resources in mitigating the impact of poverty (Brooks-Gunn and Furstenberg 1987). Social support, coping behaviour, the socio-economic status of parents, family structure -- all of these may be considered important resources that help to explain resilience in the face of adverse circumstance (Brooks-Gunn et al. 1995). Others propose that poverty exerts its effects through the presence of multiple associated risk factors, such as stress, severe marital discord, and poor maternal mental health (Biederman et al. 1995; Rutter 1990; Sameroff and Seifer 1995). Recent developmental studies have tended to employ a process model according to which poverty initially affects parenting behaviours, parental mental health, and family function, and, through these mechanisms, affects children (Elder, Nguyen and Caspi 1985; Huston 1991).

Parenting has been identified as an important link between poverty and children's developmental behaviours (Elder, Nguyen and Caspi 1985; Huston 1991; Lempers, Clark-Lempers and Simons 1989). Halpern (1990) has suggested that poverty has an "organizing influence" on child-rearing by creating personal, situational and systemic obstacles that undermine attentive and nurturant parenting behaviours (p.8). Empirical studies have shown that impaired parenting can explain a large proportion of the total correlation between economic hardship and children's mental health (Conger et al. 1992; Dodge, Pettit and Bates 1994; McLoyd 1995).

Parental psychopathology is another important causal pathway linking socio-economic disadvantage to children's mental health. Through a combination of financial strain, exposure to stressful life events, scarce social resources, and weak social supports, poverty jeopardizes the mental health of adults (Adler et al. 1994). In turn, parental psychopathology adversely affects the mental health of children (Downey and Coyne 1990; Gotlib and Lee 1990; Schor and Menaghan 1995).

A theoretical framework linking initial exposure to economic stress to consequent parental distress, then to disturbances in parenting and ultimately to deleterious consequences for children's mental health has guided a number of recent investigations (Downey and Coyne 1990; Goodman and Brumley 1990; Conger et al. 1992; McLoyd et al. 1994). Several studies demonstrated a connection between maternal stress and maternal distress leading, in turn, to poor parental discipline practices and an increased risk of children's antisocial behaviour, compromised school achievement, and poor peer relationships (Conger, Patterson and Ge 1995; Snyder 1991).

In addition to ineffective parenting and parental psychopathology, intra-familial hostility might be another mediator linking economic adversity and children's mental health. Empirical studies demonstrate that socio-economic disadvantage increases marital dissatisfaction, and raises the levels of irritability, conflict and aggression within families (Robinson and Jacobson 1987; Voydanoff 1990; Lime and Liem 1990). A number of investigations of poverty and children's mental health have utilized family functioning as a mediating variable. Using this paradigm, empirical studies have demonstrated significant associations between poor family functioning and children's mental disorder (Gotlib and Avison 1993; Amato and Keith 1991; Conger et al. 1994; Grych and Fincham, 1990).

Social-economic studies highlight the importance of distinguishing the effects of chronic and transient poverty. According to one study (Duncan et al. 1994), poor children tended to have lower IQs and more internalizing difficulties than never-poor children; however, persistent poverty had a stronger negative effect than occasional poverty. McLeod and Shanahan (1996) observed more detrimental mental health outcomes among children with histories of persistent poverty than among transiently poor or non-poor children.

Social-economic studies have suggested that the source of family income may affect child outcomes. While employment income tends to generate positive impacts, welfare participation appears to have strong negative effects on children (Hill and O'Neil 1994). However, the effect of welfare utilization may simply reflect the severity of poverty: income effects may be strongest for the very poor (Lefebvre and Merrigan 1998; Mayer 1997). Varying impacts of different sources of income may also be related to what some economic research has attempted to estimate as the "true" effect of income, given that some sources of income may be more strongly related to parental traits that both affect the parents' income and children's outcomes (Blau 1999; Mayer 1997).

In summary, many psychological studies focus on pathways, such as parenting, parental mental health, and family function, through which poverty and children's development are linked. On the other hand, social-economic studies emphasize the nature of poverty and contextual determinants of children's responses to poverty. This study will integrate both approaches by examining the effects of movement into or out of poverty, the amount of change in family income, and sources of such changes on family pathways and children's developmental behaviours.

2.3 Differential effects of poverty by immigrant status

Studies of the effects of poverty on immigrant and receiving-society children suggest a paradox. Although immigrant families are typically more poor than their receiving country counterparts (National Council of Welfare 1998; US Department of Health and Human Services 1998), children in immigrant families are, on the whole, at least as healthy as majority culture children, and often out-perform them in school (Beiser et al. 1995; Hernandez 1999; Klimidis et al. 1994; Chang et al. 1995; Zhou 1997). Furthermore, evidence from many U.S. studies, and a previous study using cycle 1 data of the NLSCY (National Longitudinal Study of Children and Youth), suggest that relative health status tends to decrease from foreign-born children, to native-born children of immigrant parents, to children of non-immigrant parents, even though poverty rates also decrease in the same direction (Hernandez 1999; Hernandez and Charney 1998; Beiser, Hou, Hyman and Tousignant 2000). These results suggest the possibility that immigrant status protects children, at least temporarily, from many of the deleterious health consequences of poverty (Harris 1999; US Department of Health and Human Services 1998).

In previous studies using cycle 1 NLSCY data, our research group found that poverty had different concomitants in immigrant and receiving society families. Among poor majority culture families, there were higher rates of parental depression, single-parent status, and hostile parenting than among either non-poor families in the general population or among immigrant families, whether poor or not. Poor immigrant children may have a mental health advantage over their receiving society counterparts because they have a more supportive family environment (Beiser, Hou, Hyman and Tousignant 1998, 2000). Some US studies found that poverty in immigrant families was not necessarily associated with single parent status, a large number of siblings, and low rates of father's labour force participation that were repeatedly found in poor non-immigrant families (US Department of Health and Human Services 1998)

Immigrant poverty is primarily due to unemployment and underemployment in the first few years of resettlement. After an initial period of high unemployment, immigrants in Canada eventually achieve higher rates of labor force participation and higher employment income than native-borns (Beiser et al. 1997; deVoretz 1995). Thus, poverty may be a transient feature of resettlement. For many receiving country families, however, poverty is probably not part of an unfolding process, but the end stage of a cycle of disadvantage. Among the majority culture, the concomitants of poverty include not only financial burden, but, in addition, social isolation and compromised self-esteem (Beiser, Johnson and Turner 1993).

2.4 Study objectives and hypotheses

Using the cycle 1 and cycle 2 NLSCY data, this study has the following objectives and hypotheses:

1. To compare the changes in parenting behaviours, family function, parental mental health, and children's developmental behaviours in four types of families: in poverty at both cycles, changed from poor to non-poor, from non-poor to poor, and not in poverty during both cycles. We hypothesize that the persistently poor will have the worst outcomes in family environments and children's developmental behaviours, followed by those who recently became poor.
2. To examine the effects of the amount and sources of changes in family income on children's developmental behaviours. We hypothesize that the amount of income change may moderate the effects of changes in poverty status: the larger the increase in income associated with movement out of poverty, the better children's developmental outcomes; the larger the decrease in the amount of income associated with movement into poverty, the worse the developmental outcomes. Furthermore, the effects of income changes may not be as profound as those of changes in family structure and employment status -- the two primary sources of income changes
3. To examine how family environment variables such as parenting, family functioning, and parental depression mediate the effects of change in poverty status on children's developmental outcomes. We hypothesize that change in poverty status affects children's developmental outcomes at lease partially through family environment variables. Thus, the direct effects of change in poverty status will be significantly reduced once controlling for family environment variables.
4. To compare the effects of changes in poverty status on children's developmental outcomes among immigrant and receiving society families. Previous studies suggest that many immigrant families experience temporary poverty which can be gradually overcome as they adjust to the labour market in the receiving country. Furthermore, poverty affects immigrant children primarily through material deprivation rather than disadvantages in family environment that are often associated with poverty in non-immigrant families. Based on these findings, we hypothesize that immigrant families are more likely to move out of poverty, mainly through employment and increases in market earning, than are receiving society families. We also hypothesize that immigrant children will experience greater improvement in developmental behaviours once their families move out of poverty.

• ¹Based on Statistics Canada's low income cutoffs (LICOs, 1992 base) for before-tax income. The number was 0.9 million when LICOs were calculated using after-tax income. The 1998 rate was 13.8% based on after tax income (Statistics Canada, 2000).