Family matters

Family structure is linked, for example, to poverty. The risk of poverty is higher among cohabiting than among married couples; divorce and separation are linked to movements into poverty, especially for women; single-parent families with a working adult generally have higher poverty rates than two-parent households in which only one parent is in employment; young people living with their parents face a substantially lower poverty risk; and children in single-parent families face an elevated risk of poverty (Harkness, 2011).

The data suggest that the next 20 years are likely to see a continuation and even acceleration of changes in household and family structures and if the underlying associations continue to apply, the projected changes in household and family structure suggest quite significant challenges in the future. The expected increase in single-parent families or in the numbers of cohabiting couples could lead to more such families facing a higher risk of poverty; the rising number of single-adult households coupled with growing numbers of elderly people implies that the significant proportion of elderly people among society’s poor will persist in coming years; the increase in childless-couple households, divorce rates, remarriages and stepfamilies may weaken family ties and undermine capacity for informal family care; the growing numbers of single-adult households will put increased pressure on housing and the increase in the share of households in which women are employed diminishes their potential to provide informal care to their children or elderly.

The economy and the future economic setting remain perhaps the most critical factor in determining to a large extent which family and household groups are affected, and how. Long-term stable growth, ample employment opportunities, sound public finances, etc will clearly affect family/household outcomes differently to a longterm unstable economy with high structural unemployment and poor public finances. In either case, some households and families will thrive, while others will see their vulnerability grow. Policy can mitigate such inequalities and ease the situation especially of those who are the most in need.

According to the latest mediumterm forecasts most countries appear to be only beginning to emerge from one of the worst recessions in decades. Indeed, it seems unlikely that GDP growth will be back on pre- 2007 track anytime soon. In addition to the slow recovery, two broad factors will shape the macroeconomic environment in ways that could impact heavily on families. Firstly, many countries face a period of quite severe fiscal retrenchment as they tackle the fall-out from the financial crisis and rein in deficit-spending items introduced to mitigate the effects of the downturn. The second broad trend is rising unemployment rates.

The combination of changes in family-household structure, broader macro trends, and the uncertain outlook for economic growth and public finances mean that countries need to plan ahead, anticipate change and, in the case of many countries, begin to re-think how they can help families through a range of policy approaches in the coming years.

Broadly speaking, the challenge for all will be to design and introduce a robust, sustainable framework of policies capable of withstanding the pressures, and adapting to the changes, that lie ahead. Hopefully we will see some of these reflected in the TT economic plan and forthcoming budget.