Sunday, March 27, 2011

The "Mystery" of Child Poverty in Sweden.

Yesterday Håkan Juholt, the new leaders of the Social Democratic party, gave his opening speech to the party congress where he outlined the future direction of policies.

Juholts chief identified social problem and number one priority was child poverty. He stated:

"We will not be a country where several hundred thousand children live in child-poverty. It is a shame for Sweden...It only belongs in [conservative leader] Reinfeldt's Sweden, not in Social Democratic Sweden".

Child poverty is measured by non-profit group "Rädda Barnen", and is defined as either children in families who receive welfare ("socialbidrag") because they are below the poverty norm defined by the state, or children in families who live below the poverty norm but for various reasons do not receive welfare. I would therefore have been counted among the sample of poor children between 1989-1999 when we lived on welfare.

It is therefore a reasonable measure that approximates absolute child poverty (although welfare payments and these minimum norms increase slightly over time in real terms).

The standard critique of the right is that these measures are relative poverty which can give misleading results. For example with relative poverty the poverty rate could bizarrely rise even if when the real income of the poor increases, just as long as the real income of the rich increases even faster. However this critique is not valid here, since the measure is closer to absolute poverty. This is incidentally also true of the American poverty rate, which contrary to perception among many libertarians measures absolute poverty, not relative poverty.

First, let's note that child poverty has declined. In 1997 there were 432.000 poor children in Sweden, and in 2008 the number was 220.000 (so Juholt was technically wrong when he said "several" hundred thousand, but let's not be picky). In percentage terms child poverty went from 22.3% to 11.5%.

But Sweden has experienced rapid income growth in the last decade and a half. So why isn't child poverty declining more? Surely it must be due to the heartless neo-liberal policies of the right!

I think this graph can give us some a hint of what's going on.


In 2008 the child poverty rate of Native Swedish children was only one third of what is was in 1997, a massive reduction from 243.000 to 78.000. The only reason Sweden's' total child poverty rate has not declined more is that during these years politicians to the right and the left brought several hundred thousand poor immigrants to Sweden to swell the ranks of the impoverished. While first and second generation immigrants constituted 44% of the poor children in 1997, they were 65% of all poor children in Sweden in 2008.

Only 5% of native Swedish children live in poverty. For immigrant children with both parents born outside of the Sweden, the child poverty rate is 39%, a miserable number which may shock and should dishearten liberal Americans. The Swedish model appeared to produce amazing results as long as the country was completely homogeneous and full of Swedes. But the much admired welfare state was unable to deal with even moderate levels of ethic diversity (still far below the levels of the United States) without a collapse in social outcomes.

Demographic change, not economic policy, is what is preventing child poverty from declining (if it were the fault of economic policy the child poverty rate of ordinary Swedes would not have declined so much).

The leader of the Social Democrats said "Child poverty shall be combated every day and with all available means!"

One fool-proof method would be slowing the importation of tens of thousands of more poor people every year until he has solved child poverty among Swedes and immigrants already here. I am guessing however that this is not among theoretically possible "available means" in Mr. Juholt's universe.

18 comments:

  1. How does not letting refugees into the country make those refugee children any less poor? That kind of reasoning just moves the problem across the border and out of the swedish statistics to a place where the children probably have a much lower chance of getting out of their poverty.

    Real people and their economic and social possibilities is what matters, not whether the poor make us look bad by mucking up the swedish statistics.

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  3. Edvin:

    What you say is true, the poor children are better off, because they would be ever poorer in Afghanistan. But you should tell that to Mr.
    Juholt, not me. He is the one who portrayed this as a major problem, instead of cheering that Swedish welfare payments have reduced global poverty.

    In fairness, it appears that many people dislike having inequality in their community. Inequality in far away countries by contrast produces less negative social externalities for Swedes. Inequality aversion and altruism are therefore not always the same thing.

    Social Democrats have a moral right to care about the well being of themselves an their society, and not only the well being of everyone on the planet.

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  4. Tino - Great post as always. Keep it up!

    Edvin - You are absolutely correct. But perhaps you should also look up a thing called "realpolitik".

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  5. Tino: Great post, except in the para after the graph the second '2008' should be 1997.

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  6. Can you get poverty numbers on refugees vs immigrants ?

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  7. Fredrik:

    No that's not possible. There is a big difference between immigrants from Europe, but most people from outside of Europe are refugees or relatives of refugees.

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  8. Tino, you claim that both Swedish and American poverty metrics measure absolute (rather than relative) poverty. Could you explain this claim?

    I ask this because by most material measures, the material consumption of the poor in the US has increased dramatically. If poverty were measured in absolute terms, this shouldn't occur.

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  9. well written about relative and absolute poverty, and I think you are right about the explanation.

    But the following formulation:

    "during these years politicians to the right and the left brought several hundred thousand poor immigrants to Sweden to swell the ranks of the impoverished."

    seems strange. Were they actually brought to Sweden by the politicians? How?

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  10. Chris :

    The American poverty rate was originally determined as 3 times a food budget, determined by the department of agriculture, and tied to inflation. This was in the 1960s. It has since been modified only marginally.

    To answer your question, I think the reason the consumption of certain goods has risen is that the American poverty threshold is reasonably high (about $22.000 for a family), because the relative price of capital goods such as cars, television, washing machine etc. has fallen, and because we systematically overestimate inflation.

    Another reason is that the U.S (bizarrely) doesn't include most government subsidies in the poverty measure, including I believe subsidize housing, food stamps health care. These subsidies have gone up.

    However the ability of the poor to buy other goods such as college and health care whose relative price has gone up is less now than 1970.

    Bergh:

    They were brought here through political decisions that made it easy to immigrate to Sweden. Since Swedish politicians control who gets to come to Sweden, changing the population mix was a choice variable. The politicians could easily have decided not to allow more poor people to come to Sweden, until we had dealt with the problems already here, in which case Sweden today would have fewer poor people.

    Since you cannot assume away parts of reality you don't like, they decided that they wanted poverty and other social problem to increase.

    I think you know this, so I don't really understand why you ask.

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    1. "they decided that the wanted poverty and other social problem to increase."

      a truly bizarre way of twisting things. I think Swedish politicians, because they were GIVEN A MANDATE BY THEIR VOTERS, chose to be COMPASSIONATE. Reframing this as a willingness to increase poverty and social problems is just as bizarre as reframing Kurdish decisions to fight for more equality or independence as a willingness to get more Kurdish men, women and children killed.

      You also assume that:
      in the long run, it won't even out. Sweden had immigration from Finland and Poland, they did bad at first, but are now fully integrated.
      - having more immigrants is automatically causing poverty to rise
      These are not inevitable events.

      Also, you're kind of blaming the victims here. Yes, yes, you hide behind "right and leftwing politicians", but its pretty clear, believe you me.
      It's not the immigrants fault that they stayed poor. You should also be patient, their social status will improve the longer they are here. In any given situation, you should always blame the most powerful
      In cases of child abuse, you blame the parent, not the child who cries or is wilful.

      The more powerful actors are Swedes who discriminate against immigrants, politicians who impede their access to the labor market and media who essentially slander immigrants as poor lazy and innate criminals.

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  11. On the same topic - child povery as an example of "abstractional politics" - see:
    http://danne-nordling.blogspot.com/2011/03/juholts-barnfattigdom-ar-ett.html
    /DNg

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  12. The obvious cause to "child poverty" in Sweden of course is the former and the present gov's politics about migration without any borders. This lunacy will tear down all welfare systems in our country without any blink from the "gents" and "ladies" in the political top... There must be a stop and our only chance to get it is to vote on the Swedish Democrats (Sverigedemokraterna) the next election 2014!

    And folks, this isn't at all just a matter of economics. Voting on SD or any other party I'm sure is the diffrence between Sweden in the future still will be a democratic nation or a teocracy like Iran because the islamists are increasing and taking better positions. In our parlament too... Better to fix it NOW! The point of no return is nearer for evry day!

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  13. Great thoughts you got there, believe I may possibly try just some of it throughout my daily life.


    Child Care

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  14. As u pointe out, child poverty is mainly the result of unemployed immigrants. Sure, if we import child poverty it will rise!

    But the establishment are too stupid and dishonest to see and acknowlidge this. And we have terrible journalists in our country.

    I honestly beleive our journalists are stupid. Cos smart people have the ability to recognise the truth and the courage to say it. Its a chilling thought that most smart people only might see clearly in a special condusive environment. Dishonesty needs weak peple.

    So child poverty is more an issue of dishonesty than actual child poverty. The only REAL child poverty is the one thats NOT the result of immigration. Imported child poverty is actually an IMPROVEMENT for the immigrated children. Not a problem.

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  15. Hey,
    Check out my blog on poverty and give me some of your thoughts please :)
    http://politicalolivia.blogspot.se/

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