Economic Downturn and Child Poverty in New Zealand

1. Research Focus

This report explores New Zealand’s socio-economic data. Based on initial findings, it focuses on how the economic downturn has affected child well-being—particularly poverty.

2. Overview of Analytical Workflow

3. Summary of Key Findings

• The higher the unemployment, the more children fall into poverty—this is true across all poverty levels.
• Children in the poorest households (40% threshold) are consistently affected when unemployment rises.
• In families closer to the poverty line (50% and 60%), the connection between job loss and child poverty goes up and down more, likely affected by external factors such as policy, economic shifts, or support programs.

4. Key Findings

Long-Term Unemployment and Child Poverty

Research Question
How does long-term unemployment influence child poverty across different poverty thresholds?

Lagged correlation analysis was conducted between the long-term unemployment rate and child poverty rates under three poverty thresholds (40%, 50%, 60% of median income):

Key Insights

• Positive correlation: Child poverty increases as long-term unemployment rises, across all poverty thresholds.
• Deeper poverty is more sensitive: The lower the poverty threshold, the stronger the correlation.
• Interpretation: Economic shocks affect the poorest families most severely, increasing the likelihood of children falling into deep poverty.

Figure 1. Lagged Unemployment and Child Poverty Rates (2012–2020)

Table 1. 1-Year Lag Correlation: Unemployment and Child Poverty

Poverty Line	1-Year Lag Correlation with Unemployment
40% Median	0.79 (strongest)
50% Median	0.67
60% Median	0.61

Temporal Trends in Correlation

Research Question
How does the correlation between the long-term unemployment rate and the three child poverty rates vary over time?

Key Insights

• The 40% poverty line shows a stable and strong correlation with long-term unemployment.
  → Suggests that children in deep poverty are consistently affected by unemployment, with fewer external disruptions.
• Correlations for the 50% and 60% poverty lines fluctuate more, possibly due to various external factors such as policy, economic shifts, or support programs.

In short: When the economy worsens, children in the deepest poverty are the most reliably and persistently affected.

Figure 2. Rolling Correlation of Unemployment and Child Poverty (2013–2020)
Note: Calculated using a 3-year rolling window. Correlation reflects delayed effects of unemployment.

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📌 Full Analysis Available
This summary is based on a complete analysis using real-world datasets.
🔗 View the full Jupyter Notebook and analysis on GitHub