Reflections and Recommendations | Pathways into and out of poverty
Reflections and Recommendations
A clearer understanding of how poverty “works” helps to guide a better, more dynamic response for struggling New Zealand families. We simply cannot afford to “fly blind” for any longer; the costs, both social and economic, are too great. These costs are intergenerational, which means our solutions need to be too. Because the wellbeing of one generation is to some extent bound by decisions and events of those who have gone before, we need to start making wiser, more-informed decisions in the House and in our homes for our children and our children’s children.
The relationship between poverty and negative outcomes both now and in the future is established and clear, but untangling the causal factors and direction has proven to be a much more difficult task. Structural and individualistic factors conspire together: people’s decisions—wise and unwise—are shaped and made in a particular context. “We are all sedimentary creatures,” writes Law Professor Robert Fishkin, “our abilities and disabilities, our preferences and values, and our character traits all arise through layer upon layer of dynamic interaction between self and environment that build us, gradually over time, into the people we are.” Because of this complexity, the picture that is painted from the evidence is more impressionist than realist. We would do well to avoid over-simplifying or over-exaggerating the nature and causes of poverty in public discourse—hyperbole, false dichotomies and blame games tend to lead us further away from the truth, and subsequently, further away from successful solutions.
This paper has shown how incredibly dynamic poverty is in New Zealand, both within lifetimes and across generations. Over time, poverty touches many more lives than one might expect—more than the prominent point in-time figures would suggest. The apartment building and the hospital ward illustrations serve to show how poverty is a “seeming paradox,” as the OECD describes it, “simultaneously fluid and characterised by long-term traps.” Most families’ experience of poverty is short with limited consequences (in large part thanks to the ameliorating effect of the benefit system) but, sadly, many remain trapped for extended periods of time. Those trapped in persistent poverty are left with the greatest scars.
Uncovering the roots of poverty is only a first step, getting at them through policy is next. The complex nature of the problem combined with the exploratory nature of this paper means that the recommendations that follow are more broad principles and suggested directions than specific policy solutions. These principles and directions both challenge how we—as policy-makers and researchers—have done things in the past, and offer us some direction as to how we might respond in the future.
Challenges for policy-makers
Because persistent poverty leaves the greatest scars, preventing families from falling into long-term spells of poverty and helping them out if they are there should be the primary focus of poverty-alleviating policy now. Minimising the extent that poverty is passed on from one generation to the next—intergenerational poverty persistence—should be the focus for poverty in the future.
Our policy priorities should be backed by solid evidence, not attention-grabbing headline figures or ill-considered causal theories. The substantial streams flowing into and out of poverty need to be understood clearly by policymakers, alongside a greater appreciation for the relative influence of the myriad different factors causing it. A simplistic cross-sectional, one-size-fits-all approach to those in poverty doesn’t reflect reality by ignoring the large proportion of families shifting into and out of poverty, which can lead to ineffective—and potentially harmful—interventions that will likely fail to make a longterm dent in persistent poverty figures. Similarly, a failure to make clear distinctions between the causes and indicators of poverty can lead to poorly-targeted policies that don’t get to the root of the problem. Prioritising the most disadvantaged means we need to reduce persistence and increase upward mobility at the bottom of the income spectrum.
Work and education
From the evidence considered, a renewed focus on improving the lives of struggling families now and in the future through work and education should make an appreciable difference towards this end. The focus on struggling families is important as policies should be targeted and tailored to those in, or at risk of, persistent poverty. Broad policy solutions may benefit the majority of families, and in some cases, just the better-off, but fail to reach and help those who face a number of challenges and have complex needs.
Our recommendations fall broadly under the domains of work and education. Findings and policies that focus on the nature and role of family are critical too, and are intertwined throughout both domains.
Recommendations – work
Worklessness and low earnings are the primary drivers of poverty for families now. As poverty is about a lack of resources (mainly income), and work is the primary means of attaining resources in a market economy, it makes sense that a lack of work or low earnings is a significant causal factor. “Low parental qualifications; drug and alcohol dependency; parental and child health problems; and family size and instability” all contribute to and mediate this pathway. Jobs, particularly full-time, stable, and for both parents remain the “surest route out of poverty” for families. As such, policy should continue to encourage “work for those who can” (and need to), while at the same time balancing this imperative with the importance of nurturing children, particularly while they are younger.
Job retention is key
Getting parents into work, keeping them there, and ensuring the work is stable and sustainable is crucial. Research by the OECD suggests that getting more parents into work would result in the greatest reductions to the child poverty rate. Bolstering labour market outcomes should remain a policy focus, with particular emphasis on families with a larger number of children and young parents given their high relative risk. Because losing work is the most prominent trigger event for families falling into poverty, policy should not solely focus on getting people off benefits or into jobs as it has tended to in the past. Job retention is a critical yet often-overlooked area: making sure the work is sustainable with decent hours and wages should also be a priority to safeguard against re-entry into poverty.
A renewed focus on up-skilling
Finding work is harder for some, particularly parents with low skills and poor qualifications—those most likely to be unemployed and in poverty. As Director of Centre for Research in Social Policy in the UK Donald Hirsch writes: “[w]here parents have to make a choice between low income and long hours, it is difficult to give children good life chances.” Policy areas for focus could include skills development and investigating ways to give parents in this situation preference in the active employment system. When those less skilled do find work, they tend to be on lower wages. Raising the minimum wage is unlikely to be effective as only around twenty percent of families with a worker earning the minimum wage have children, and because most of those that do are on benefits, abatement rates mean that the difference in take-home income will likely be negligible. Programmes that boost skills are a more sustainable, longer-term solution, but will take time to gain traction. Businesses have a role to play to improve job prospects and wage levels within the organisation with training and paths of career advancement, and affording more flexible working hours where appropriate.
Getting behind sole parents
Sole parents are also of great concern in New Zealand when it comes to unemployment. Losing a worker is much more likely to plunge families with children into poverty than other factors. While New Zealand has an above-average female employment rate internationally, the sole parent employment rate of 50 percent is one of the lowest in the OECD and significantly trails behind the OECD average of 69 percent. The chance of exit from poverty for sole parent families when contrasted with couple families is also low when compared internationally. Decisions “to work or not to work” were found to be more important than changes to hours worked for sole parents already in work, meaning work itself rather than wages is key. Issues like additional travel and childcare costs, sick children and school holidays will need creative solutions. Again, investigation into more flexible working hours and improving availability of affordable, quality childcare solutions for these parents are potential ways forward here. Expanding paid parental leave is likely to have little effect on persistent poverty as parents in that situation are unlikely to have the kind of stable work where leave is an entitlement.
Strengthening families should also be a priority. As the Brookings Institution researcher Isabell Sawhill writes, “social policy faces an uphill battle as long as families continue to fragment and children are deprived of the resources of two parents.” Indeed, the EAG claims that “[p]art of New Zealand’s comparatively mediocre child poverty performance is almost certainly due to the higher than average rate of sole parenting,” with 21 percent of New Zealand children living in sole-parent families compared to the OECD average of 16 percent. Historically, government policies that attempt to promote stable relationships or delay parenthood have had mixed results. This may reflect that changes to family structure over time are more the result of cultural rather than legislative forces. Family, counselling and relationship support have the potential to reduce conflict, improve family functioning, stability, and overall well-being and so these measures deserve greater attention. More serious evaluation of their effectiveness is also required, however, as many of the programmes in New Zealand have not been subject to rigorous, evidence-based review.
Supporting non-resident parents
Supporting non-resident parents (overwhelmingly fathers) ought to be subject to increased policy focus, an aspect usually neglected in discussions on policies aimed at getting sole parents into work. Around a third of child support payments are missed or delayed, according to the IRD, putting sole parents at risk. To reduce poverty and the associated damaging inter-parental conflict, both improving employment incentives and opportunities for non-resident parents to better support their children financially and encouraging relationship and counselling support to promote emotional involvement where possible should be investigated. The broader objectives underpinning the current child support system in New Zealand have been described as “a dog’s breakfast” and require review as well.
Balancing work and benefits
While the focus here is on work as it is the most effective pathway out of poverty, the tax and benefit system also plays a significant role in determining the extent that work matters for family’s outcomes. The increase of the poverty rate for sole parents following the reforms of the early 1990s is a stark example of this. The gap between income from the labour market and benefits has grown over the past few decades, in large part due to benefits not being linked to average wages like New Zealand Superannuation is. While the Government has recently increased benefits through the Child Hardship budget package, an ongoing indexation to median wages should be considered. Policies that seek to reduce unemployment also “need to be formulated in ways that prevent the growth of working poverty.”
A balance also needs to be struck regarding the relative policy focus and timing of employment and benefits. Boston and Chapple recommend that a benefit strategy be given weight when children are younger, and an employment strategy as they grow older. This makes sense, with the growing body of evidence surrounding child development supporting this approach. In the long run, however, international evidence tends to reinforce that policies designed to improve “adult economic independence in any kind of family type show higher effect on reducing poverty risk in the short to longterm than those focused on the family income as a whole.” Because of our levels of unemployment and market income poverty, reducing poverty primarily through raising benefits rather than reducing parental unemployment is relatively costly and inefficient for New Zealand when compared with many other countries and as the OECD points out, would do little to increase skills and productivity.
Given the “strong relationship between parental income, early employment, and future earnings,” focus should also be placed on supporting the transition from school to work to build a strong economic foundation for families of the future. Early contact with the benefit system has been shown to be a strong predictor of future long-term benefit receipt. The employment participation rate for 15-24 year olds in New Zealand has also dropped relative to other age groups over the past decade—signifying a weakness in this area. Apprenticeships, on-the-job training, and professional partnerships are potential avenues for further exploration. Education lies at the heart of intergenerational mobility, particularly at the bottom of the spectrum.
Recommendations – education
It is also no surprise that children’s low educational attainment is the primary driver of poverty for families in the future. New Zealand and international evidence suggests that educational attainment explains a large proportion of intergenerational income mobility and therefore intergenerational poverty. The link across the life course between education and eventual employment is strong and well-established—a child who struggles at school will likely have low skills and qualifications when they grow up, making it harder to get and keep a stable and well-paid job in the modern, service-oriented economy and eventually, provide for their family. “Low parental qualifications, parental ill health, child ill health, the home environment, children’s non-cognitive skills and childhood poverty itself” all contribute to and mediate this pathway.
A greater focus on disadvantaged children
The pathway between education now and work in the future depends in large part upon how effective the educational system is at pushing against socio-economic barriers; otherwise it can simply perpetuate and sometimes amplify inequalities. Education should not just be a means for those with advantaged backgrounds to get further ahead. Unfortunately, unlike countries like Canada, Finland, Japan and Korea, comparatively, New Zealand’s system is notoriously bad at improving outcomes for disadvantaged children. Understanding why this is and doing something about it should be another policy priority, as it is a crucial aspect to breaking intergenerational cycles of poverty in New Zealand
Improving skill formation key
A significant proportion of factors that influence children’s development and educational attainment— some claiming up to eighty percent—lie outside of school grounds, however. Early experiences of poverty, for example, particularly before the age of five, have consequences for future educational and behavioural success. Family background and early life circumstances are crucial for a child’s development and school-readiness. An enriched home environment with healthy, well-functioning parents who are engaged and invested in their children supports this process. As James Heckman and Flavio Cunha write:
Skill formation is a life cycle process. It starts in the womb and goes on throughout life. Families play a role in this process that is far more important than the role of schools. There are multiple skills and multiple abilities that are important for adult success. Abilities are both inherited and created, and the traditional debate about nature versus nurture is scientifically obsolete.
These skills not only have the potential to help children to develop cognitive skills like literacy and numeracy and form the foundation for educational attainment, but to enhance employment opportunities as well. Employers are increasingly valuing non-cognitive character or “soft skills” for workplaces of the future. Recent findings from the US suggest that while short term improvements to achievement and behaviour at school from early childhood education tend to fade as time goes on, there appear to be long-run improvements on adult employment outcomes. This could suggest that social and emotional skills fostered early on largely lay dormant through school where “hard” literacy and numeracy skills are accentuated, only to be eventually re-awakened in the workplace. Therefore, a “whole of child” development strategy that promotes character skills alongside academic achievement should be a complementary policy focus to help improve school readiness, performance and eventual economic success for those on low incomes. Policies could work at several levels across the life course: in early years through parental education that targets parenting style and the home learning environment, early childhood education, and later, in primary and secondary schools. There is evidence that programs that aim to develop these skills in the early years can be effective.
Two-generation models and family hubs show potential
Families need to be helped as families. A promising and relevant area of work is the “two-generation” model or mechanism, an approach that seeks to develop and assist both parents and their children simultaneously. One potential policy direction that flows from this model is to establish and bolster “family hubs” where services that seek to improve child development and school readiness, parenting aspirations and parenting skills and child and family health are met with “antenatal and postnatal services, information on childcare, employment and debt advice and relationship support,” for example. Schools, in partnership with other businesses and organisations could also form “hubs” for holistic, intergenerational support services.
Income, family background and policy across generations
Boosting family income important yet insufficient
A surprising finding from the intergenerational research was the relatively small to modest effect family income has on a child’s later outcomes—both economic and social—once family background and early life circumstances had been taken into account. As Susan Mayer put it, all else being equal, “the things that change when income increases have only a modest effect on outcomes, while the things that have a large effect on outcomes change only a little when income increases.” The challenge for policy is that the things that aren’t income are difficult to influence.
While income may play a lesser role than we might have expected, sophisticated statistical techniques show that there is still an independent effect on future outcomes. There are several possible explanations for the limited observed effect of income. It may be that the low hanging policy fruit has already been picked—benefits, active employment and education policies already do significant work to reduce poor outcomes for families and each additional dollar of income they receive is subject to diminishing returns. It may also be that the effect is spread and accumulated across a whole range of outcomes and mediated through a vast number of pathways. Income-based policies are necessarily “multi-purpose policies” that target multiple outcomes in multiple ways, but because each effect is relatively small it makes it difficult to detect the full contribution of income change. Small changes across many domains can make big cumulative differences in children’s lives.
Towards a broad portfolio of solutions
And yet, while policies that seek to boost family incomes still have value, the research is crystal clear that they are not “a silver bullet” for improving children’s outcomes now and in the future. If we are to invest in children now to improve their lives in the future, we therefore need a broad “portfolio” of interventions. From a policy perspective, we need to address both causes and consequences. As Professor David Fergusson recommended:
“[T]he optimal policy mix for addressing the linkages between income inequality in childhood and later outcomes will require a judicious combination of policies that includes those targeted specifically at reducing income inequalities and policies aimed at addressing the range of social and family problems that occur at a higher frequency in low income families.”
Income-based strategies not long-term solutions
It is theoretically true that if the government just provided more income support for low-income families in a way that didn’t change the median income, then poverty could be eliminated at that point in time. But the intricacies of dynamics and inheritance within and across generations highlighted in this paper show that this would not be a steady-state equilibrium, that social and family problems (while minimised from the effects of income) will eventually contribute to problems in the future.
If we hold that redistributive efforts beyond the current policies will have limited effect, addressing the host of family background and early life circumstances likely experienced by children in poor families is important. Heckman, again, urges that:
“It is premature to advocate income transfer policies as effective policies for promoting child development…we find that the importance of these factors [the timing of income and lack of resources] in shaping child outcomes has been exaggerated in the recent literature compared to the importance of parenting and mentoring. Untargeted cash transfers are unlikely to be effective in promoting child skills.”
Striking the right balance
Since many of the family background and early life circumstances for these families cannot be changed directly through policy—the boat for parental educational attainment or family stability has likely sailed, for instance—policies should aim to mitigate the consequences of these risk factors on families now and to seek to address the root causes for the future. Ensuring that parents have sufficient resources when their children are at their youngest and most responsive to support should remain a policy goal. Yet raising in work benefits, for example, needs to be complemented with parenting programs and so on.
From a practical and functional perspective, there are few levers that government can pull to address wideranging social and family problems. Increasing parenting skills or improving schools requires a lot more effort, but the evidence suggests this is where the lion’s share of our work—and potential impact—lies. Increasing incomes through the tax and benefit system, on the other hand, is a much easier lever for government to pull. Getting the institutional balance right here is one of the greatest challenges facing anti-poverty policy.
But because the causes are multidimensional, with no one particular pathway standing out as dominant, solutions need to be tailored to meet families’ complex needs. Risk factors are cumulative and tend to cluster over time and become too overwhelming for a family to overcome. This suggests a need for better coordination across and within government and non-government organisations and an increased role for organisations that are better suited to deal with many overlapping problems at once. The Productivity Commission’s recent inquiry into More Effective Social Services lays out several possible solutions, including a focus on shifting resources and responsibility to organisations closer to families and increased collaboration and innovation across agencies. While not without its flaws, recent developments on the “investment approach” to benefit reform have helped shift policy discourse to be more forward-looking and focussed on persistence within and across generations. The questions currently being asked and approaches being taken by the Government are good ones—they are on the right track when it comes to seeking better evidence for policy and targeting to those who need it most. This should be commended, encouraged, and refined over time.
Challenges for researchers
“As our island of knowledge grows,” physicist John A. Wheeler remarked, “so does the shore of our ignorance.” There is still so much we don’t know, particularly in New Zealand. As one researcher put it, “it is easier to say what is not important than to put the finger on the decisive causal mechanisms.” Most of the statistical models referenced in this paper explained, at best, around only half of the effects of potential causal pathways, and even then, conclusions remain tentative. This is, in part, because people are beyond measurement; the knowledge reaped by the social sciences is partial at best and misleading at worst. Sociologist Christian Smith urges researchers to shift questions from “what variables tend to be associated” like those driving the regressions referenced in this paper, toward “what is real in social life, and how do its parts work causally to generate outcomes of importance.” This means moving beyond, say, education causes intergenerational poverty, towards exploring the mechanisms that mediate that relationship such as the home environment. While we need more of the former, the latter is where the real gains are to be made.
More qualitative, experimental, and evaluative research is needed. Qualitative research is crucial for understanding transitions into and out of poverty as well as for extending the imagination as to what to include in statistical analysis to yield a better explanation of reality. It could also explore core issues like choice, hopes, aspirations, and expectations that are more difficult to access quantitatively. Additionally, conducting experimental studies like randomised control trials in New Zealand would help shed light on the causal mechanisms and the results of policy changes unique to our context; lessons from overseas research are instructive but there are severe limitations with transferring conclusions across international borders. Rigorous evaluations of programmes like those designed to improve parenting skills, for example, would also be of benefit. We have limited our investigation primarily to proximate causes here—this needs to be paired with analysis of broader structural causes as well.
Longitudinal, integrated, and clustered data should also become the new benchmark and deserves more investment than is currently being undertaken. We have seen how much clearer the picture becomes when we can track resources and outcomes over time. Research that identifies clusters of disadvantage should also be a focus, to better understand vulnerable groups and tailor policy more effectively. Treasury’s recent work harnessing Integrated Data Infrastructure (IDI) represents a promising future for collaborative and innovative use of data to drive policy. The Finance Minister recently discovered, for example, that while it is commonly acknowledged across government that supporting parents for the first few years of their child’s life is critically important, “serious money doesn’t get spent until children turn three…it’s been a serious revelation…the way we spend the money doesn’t match the rhetoric that policy-makers have.” Better evidence made this revelation possible.
To pinpoint worklessness/low earnings and low educational attainment as key areas to investigate is one thing, but they are only steps in a longer journey. Next steps need to go deeper. With respect to employment, what happens to parents who get a job? How long does the work last for? Which policies can improve job retention? How can we improve the job prospects and wage levels of those with low skills? How can we increase wages for low-skilled jobs? With respect to education, what factors are most important within the family for a child’s development? How are these transmitted across generations? Which policy interventions are effective at targeting these factors, if any? What has been done overseas and can it be replicated here? Great work has already been done in these areas, but there is still a long way to go. The stark realities faced by struggling New Zealanders underscores the urgency of this work; the scale and complexity of the challenge means we need to collaborate well if we are to make a real difference.
A comprehensive, deeper understanding of the factors influencing poverty in families now and across generations will better inform decisions toward a future where New Zealanders have enough resources to participate in and contribute to society; that they might flourish. Families need more opportunities to succeed and the skills to grasp those opportunities, but this isn’t enough. They also need a sense of optimism and hope that better lives for parents and their children are not only possible, but also achievable. Overwhelmingly, New Zealand parents with low incomes want to put family first, and deeply want the best for their children. It is our responsibility, as researchers and policy-makers, to help forge and refine a policy environment where this has the best chance of happening. “Tinkering with the system won’t help the most needy,” as the Productivity Commission argued, so alongside better evidence, political will, vision, and bravery are imperative for policy change that will actually change lives.
Maxim Institute’s future research agenda will continue to build upon this work and change the way we think about and respond to poverty in New Zealand. Better evidence is our piece of the puzzle. Given the findings from this paper, we will focus on investigating policies to address worklessness and low earnings to give hope for families now, and low educational attainment and earnings to give their children hope for the future. This is our challenge, and one that we believe will go some way towards turning intergenerational cycles of despair into intergenerational cycles of hope.
This is an extract from Kieran’s research series “The Heart of Poverty | Uncovering Pathways into and out of Disadvantage in New Zealand” Discussion Paper. (Released 2016)
 For more on the costs of child poverty, see Boston and Chapple, Child Poverty in New Zealand, 55-58.
 Glen Elder Jr., Life course dynamics: trajectories and transitions 1968-1980 (1985), 40.
 Fishkin, Bottlenecks.
 OECD, OECD Employment Outlook 2001 (2001), 37.
 Ballantyne et al., Movements Into and Out of Child Poverty in New Zealand, 40.
 Ballantyne et al., Movements Into and Out of Child Poverty in New Zealand, 40.
 See Productivity Commission (2015), More Effective Social Services
 UK Department of Work and Pensions, An evidence review of the drivers of child poverty for families in poverty now and for poor children growing up to be poor adults, 6.
 Smith and Middleton, A review of poverty dynamics research in the UK, 86.
. EAG, Child Poverty in New Zealand, evidence for action (Office of the Children’s Commissioner, 2012) 31.
 For data on longer-term employment outcomes for people moving from a benefit to work, see Sylvia Dixon and Sarah Crichton, “The longer-term employment outcomes of people who move from a benefit to work,” Social Policy Journal of New Zealand 31 (2007). The authors write that “[e]mployment retention rates were found to be moderately high in the two-year follow-up period, but at any given time around one-third of those with jobs were earning less than $1,500 a month, indicating that they probably were not employed full-time or for a full month. Jobs also tended to be short in duration. More than half of the study group returned to a benefit during the follow-up period.”
 Donald Hirsch, Experiences of poverty and educational disadvantage (JRF, 2007) 3.
 New Zealand Treasury, Analysis of the Proposed $18.40 Living Wage (2013), 3.
 See, for example, the Warehouse’s introduction of the Career Retailer’s Wage: Claire Rogers, “Warehouse adopts ‘career retailer wage’,” accessed 20 October 2015, http://www.stuff.co.nz/business/industries/8641343/Warehouse-adopts-career-retailer-wage.
 OECD, OECD Family Database, “LMF2.3 The distribution of working hours among adults in sole-parent households,” accessed 20 October 2015, www.oecd.org/els/ family/database.htm. Note: the latest available data was from 2013.
 Ballantyne et al., Movements Into and Out of Child Poverty in New Zealand, 29-30.
 Gordon Dahl et al., What is the case for paid maternity leave? (National Bureau of Economic Research, 2013); Willem Adema and Peter Whiteford, Babies and bosses: reconciling work and family life: A synthesis of findings for OECD countries (2007) cited in Boston and Chapple, Child Poverty in New Zealand, 149.
. Isabel Sawhill, Generation Unbound: Drifting Into Sex and Parenthood Without Marriage (Brookings Institution Press, 2014), iv.
 EAG, Working Paper no.3 Life course Effects on Childhood Poverty, 3.
 Manning et al, Healthy marriage initiative spending and U.S. marriage & divorce rates, a state-level analysis (Bowling Green State University, 2014); Adam Sonfield, Kinsey Hasstedt, Megan L. Kavanaugh and Ragnar Anderson, The social and economic benefits of women’s ability to determine whether and when to have children, (2013).
 New Zealand programmes that target “at-risk” families include Well Child, Early Start, Family Start, Whanāu Ora, Incredible Years, and HIPPY.
 Boston and Chapple, Child Poverty in New Zealand, 229.
 Boston and Chapple, Child Poverty in New Zealand, 176.
 For a literature review on the causes and consequences of parental separation on children, see Ross Mackay, “The impact of family structure and family change on child outcomes: A personal reading of the research literature,” Social Policy Journal of New Zealand 24, no. 4 (2005): 111-133.
 See Boston and Chapple, Child Poverty in New Zealand, 167-178 for a raft of recommendations to improve Child Support in New Zealand.
 Boston and Chapple, Child Poverty in New Zealand, 42-43.
 Perry, Household incomes in New Zealand.
 Susan Singley and Paul Callister, “Work poor or working poor? A comparative perspective on New Zealand’s jobless households,” Social Policy Journal of New Zealand (2003): 151-152.
 Boston and Chapple, Child Poverty in New Zealand, 96-98.
 Stock et al., Personal Relationships and Poverty: An Evidence and Policy Review, 5.
 Willem Adema and Peter Whiteford, What Works Best in Reducing Child Poverty: A Benefit or Work Strategy, OECD Social Employment and Migration Working Papers No. 51 (OECD, 2007). See Tables 9 and 10 for simulations that compare work and redistribution strategies.
 Blanden, Gregg and Macmillan, “Accounting for Intergenerational Income Persistence,” 18.
 Ministry of Social Development, Taylor Fry Valuation of the Benefit System for Working-age Adults As at 30 June 2014.
 Statistics New Zealand, “New Zealand social indicators – Labour market, Labour force participation rate,” accessed 21 October 2015, http://www.stats.govt.nz/ browse_for_stats/snapshots-of-nz/nz-social-indicators/Home/Labour%20market/lab-force-particip.aspx.
 UK Department of Work and Pensions, An evidence review of the drivers of child poverty for families in poverty now and for poor children growing up to be poor adults, 95.
 UK Department of Work and Pensions, An evidence review of the drivers of child poverty for families in poverty now and for poor children growing up to be poor adults, 8.
 Corak, Do Poor Children Become Poor Adults.
 OECD, Economic Surveys: New Zealand 2015, 46.
 Ian Snook & John O’Neill “Poverty and Inequality of educational achievement,” in Sue Osborne ed., Twelve thousand hours: Education and poverty in Aotearoa New Zealand (2014) 24-25.
 Duncan, Magnuson and Votruba-Drzal, “Boosting Family Income to Promote Child Development,” Greg J. Duncan, Kathleen M. Ziol-Guest, and Ariel Kalil, “Earlychildhood poverty and adult attainment, behavior, and health,” Child development 81, no. 1 (2010): 306-325. See also Almond and Currie, “Human Capital Development Before Age Five.”
 Flavio Cunha et al., “Interpreting the evidence on life cycle skill formation,” Handbook of the Economics of Education 1 (2006): 697-812.
 David Deming, The growing importance of social skills in the labor market, (National Bureau of Economic Research, 2015), James Heckman and Tim Kautz, “Hard evidence on soft skills,” Labour economics 19, no. 4 (2012): 451-464.
 Mark Lipsey, Dale Farren and Kerry Hofer, A Randomized Control Trial of a Statewide Voluntary Prekindergarten Program on Children’s Skills and Behaviors through Third Grade, (2015). The authors argue that: “scaling up pre-k programs quickly could lead to badly run programs that might, in fact, be worse than doing nothing.”
 Waldfogel and Washbrook, Income-Related Gaps in School Readiness in the United States and the United Kingdom.
 Ron Haskins, Irwin Garfinkel and Sara McLanahan, “Introduction: Two-Generation Mechanisms of Child Development,” Future of Children, Volume 24, no.1 (2014).
 Centre for Social Justice, Fully Committed? How a government could reverse family breakdown (2014), 48. Early-years Service Hubs are the closest programme in New Zealand, see Ministry of Social Development, “Early Years Service Hubs,” accessed 24 October 2015, http://www.familyservices.govt.nz/working-with-us/ programmes-services/early-intervention/early-years-service-hubs.html.
 Mayer, The influence of parental income on children’s outcomes,
 See Poverty Reduction Efficiency (PRE) figures in Stephens, Waldegrave and Frater, “Measuring Poverty in New Zealand.”
 Mayer, The influence of parental income on children’s outcomes, 69.
. Chapple and Richardson, Doing better for children, 168.
 Steve Aos, Washington state’s family integrated transitions program for juvenile offenders: Outcome evaluation and benefit-cost analysis (Washington State Institute for Public Policy, 2004): 105-114 cited in Chapple and Richardson, Doing better for children, 184.
 Fergusson, Horwood and Gibb, “Childhood family income and later outcomes,” 27.
 For an online tool that shows how this is possible, see the “first ‘solution’” in Joanna Mack, “Income threshold approach,” accessed 20 September 2015, http://www. poverty.ac.uk/definitions-poverty/income-threshold-approach.
 Heckman and Mosso, The economics of human development and social mobility, 39, 57.
 Chapple and Richardson, Doing better for children, 168-9.
 Gibbons and Jo Blanden, The persistence of poverty across generations, 34-35
 For cogent critiques of the forward liability investment model, see Simon Chapple, “Forward liability and welfare reform in New Zealand,” Policy Quarterly 9, no. 2 (2013): 56-62 and Bill Rosenberg, “The ‘Investment Approach’ is Not an Investment Approach,” Policy Quarterly 11, no. 4 (2015).
 Cited in John Horgan, “The New Challenges,” Scientific American 267, no. 6 (1992).
 Anders Björklund and Markus Jäntti. “How important is family background for labor-economic outcomes?” Labour Economics 19, no. 4 (2012): 465-474.
 Christian Smith, To Flourish or Destruct (University of Chicago Press, 2015), 21.
 Smith and Middleton, A review of poverty dynamics research in the UK, 43. The longitudinal data captured in the Growing Up in New Zealand research is also promising in this respect and offers hope for the future.
 Gareth Thomas, “Data shows where bleak future beckons,” RNZ, accessed 22 October 2015 http://www.radionz.co.nz/news/national/291739/data-shows-placeswhere-bleak-future-beckons.
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