Single-Parent Family Poverty in 24 OECD Countries: A Focus on Market and Redistribution Strategies

Abstract

Single-parent families and their high poverty rates remain a genuine concern in OECD countries. Much of the research has focused on “redistribution” through income taxes and transfers as an effec- tive strategy to reduce poverty. We adopt this traditional approach, and then push forward a focus on “market” strategies that facilitate single parents’ labor market participation.

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Single-parent families and their high poverty rates remain a gen-
uine concern in OECD countries. Much of the research has focused
on “redistribution” through income taxes and transfers as an effec-
tive strategy to reduce poverty. We adopt this traditional approach,
and then push forward a focus on “market” strategies that facilitate
single parents’ labor market participation.
Throughout this research brief, we define single-parent families
as households in which a parent lives with one or more of her or his
children, but without a partner. People other than the partner can
live in the household too. We do not empirically differentiate be-
tween single mothers and single fathers, mainly because the num-
ber of single fathers is relatively small. In our data, 15% of all single
parents (in our pooled data) were fathers1, ranging from a low of 8%
in Estonia, up to 22% in Norway and 35% in Hungary2. It should
be emphasised that single parenthood is very much a gendered phe-
nomenon: the overrepresentation of single mothers (rather than fa-
thers) means that women are disproportionally affected by the risk
of single parenthood. Also, it means that the disadvantaged posi-
tion of women in the labour market (e.g. in terms of the gender
wage gap, of lower employment, and employment in lower paying
jobs) influences and compounds the vulnerable position of single-
parent families.
In Figure 1, we show the poverty rates of single-parent families
across countries, using techniques commonly used by researchers
in the field - including the first LIS Center Research Brief (Gor-
nick and Milanovic, 2015).3A household was identified as living
in poverty if it had an income below the poverty line of 50 percent
of the median equivalized household income in that country. For
each country, the poverty rate was calculated based on their mar-
ket income (the income from employment and from capital, “before”
taxes were paid and transfers were received) and on their disposable
household income (market income “after” taxes and transfers). 4
Two key findings emerge from Figure 1:
•Poverty rates of single-parent families based on market in-
come are high in most countries. The longer bars represent
poverty rates based on income “before” taxes and transfers;
these vary from a low of 26% in Hungary to a high of 61% in
Ireland, and on average 42%. In the United States, this poverty
rate was 49% percent, ranking 6th among these countries.
2

Figure 1: The Effect of Redistribution On Reducing Poverty for
Single-Parent Families
Authors’ calculations based on LIS data (Wave VIII). All data on 2010, except Hun-
gary (2012) and Japan (2008).
49
33
41
29
50
27
47
26
42
23
43
23
54
22
61
22
42
21
26
21
38
20
38
20
39
20
51
19
31
18
27
17
45
17
41
16
48
16
57
13
39
11
36
10
28
9
37
8
United States
Israel
Germany
Canada
Japan
Estonia
Australia
Ireland
France
Hungary
Spain
Greece
Czech Republic
Iceland
Italy
Slovenia
Poland
Luxembourg
Netherlands
United Kingdom
Norway
Finland
Slovak Republic
Denmark
0 25 50 75
Poverty
Disposable Household Income Market Income
3

•Redistribution is an effective strategy to reduce poverty
among single-parent families. The shorter bars represent
poverty rates “after” taxes were paid and transfers received.
The difference between the two bars represents the reduction
in poverty by redistribution through progressive taxation and
transfers. Many of these countries have reduced their poverty
rates by half or more. In the United Kingdom, the poverty rate
significantly decreased from 57% to 13% (a total of 43 percent-
age points). The average poverty reduction was 23 percentage
points. In the United States, the poverty rate decreased to a
much lesser degree from 49% to 33% (a total of 15 percentage
points). In the U.S., the high poverty based on market income
is close to the average; however, the high poverty based on
disposable household income is quite exceptional.
The finding that poverty rates based on disposable household
income as well as the level of redistribution varies across countries
are clear and consistent throughout the literature. Now, we focus
on strategies affecting the market income of single-parent families,
for this has received much less attention. Cross-national variation
in poverty is not only based on the effectiveness of redistribution,
but also on market inequalities. Atkinson brought this issue to the
fore in his recent book advocating for “the importance of measures
to render less unequal the incomes people receive before government
taxes and transfers” (2015, p. 113).
We take a closer look at market-income strategies that facilitate
the employment of single parents. We examine specifically how fam-
ily policies - paid parental leave and public childcare and preschool
services - facilitate the labor market participation of single parents,
thus affecting (in)equality of market income, as well as policies such
as child benefits that affect inequality of disposable household in-
come through transfers or tax benefits.
Figure 2 shows the association between single-parent employ-
ment rates and family policies that facilitate their employment.5We
highlight two findings:
•Single-parent employment rates are high. The percentage
of single-parent families in which at least one member earns
a market income ranges from a low of 58% in Ireland to a
high of 90% in the Slovak Republic. The average single-parent
employment rate is 79%.
4

Figure 2: Single-Parent Employment Rates are High in Countries
with National Policies on Paid Leave and Child Care Stimulate Em-
ployment
Authors’ calculations based on LIS data (Wave VIII). All data on 2010, except Hun-
gary (2012) and Japan (2008).
●
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Australia
Czech Republic
Germany
Denmark
Spain
Finland
France
Greece
Hungary
Ireland
Iceland
Italy
Japan
Luxembourg
Netherlands
Norway
Slovak Republic
United Kingdom
United States
60
70
80
90
0 25 50 75
Number of weeks paid leave (full−time equivalent)
Percent of single parents employed
A. Paid Leave
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●
●
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●
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●
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●
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●
●
Australia
Czech Republic
Germany Denmark
Spain
Finland
France
Greece
Hungary
Ireland
Iceland
Italy
Japan
Luxembourg
Netherlands
Norway
Slovak Republic
United Kingdom
United States
60
70
80
90
2000 4000 6000
Public spending per child on childcare and preschool services, US$ PPP
Percent of single parents employed
B. Childcare and Preschool Services
5

•Single-parent employment rates are higher in countries
with policies that facilitate parental employment.6In the
literature, very long periods of leave (compared to moderate du-
rations of leave) are often found to be associated with reduced
female employment rates, particularly if unpaid (Gornick and
Meyers, 2003; Nieuwenhuis, 2014). Here, we do not find any
added benefit of leave durations beyond about 50 weeks for
single-parent families; neither did we find a negative effect of
further increases. Compared to countries with (almost) no paid
leave, countries providing longer periods of paid leave (upper
panel), such as Hungary, Germany, France and the Nordic
Countries show higher employment rates among single par-
ents. This finding also holds for countries with high levels of
government spending (per child) on childcare and preschool
services, mainly in Norway, Denmark, Finland and Iceland.
The United States presents an unusual case with high em-
ployment rates (82%) and little (federal) support for parental
employment.
Still, questions remain as to whether single-parent employment
does have the expected effect of reducing poverty. We investigate
this point in further detail. Figure 3 shows the association between
employment and poverty rates of single-parent families. Few single-
parent families have access to more than one earner, however; there
may be additional earners that financially contribute to and reside
in single-parent families, including other relatives and grandpar-
ents, but not partners.
•Employment significantly reduces the poverty rate among
single-parent families. For instance, in France, among single-
parent families without an earner 57% are poor, with one earner
13%, or with a second (or more) earner 3% are poor.
•The Working Poor: even with employment, many single-
parent families are poor. Employment does not offer suffi-
cient protection against poverty for all. Among single-parent
families with one earner, on average 16% are poor, ranging
from a low of 6% in Denmark to a high of 29% in the United
States. Even among those households with a second earner
11% are poor in the U.S.
6

Figure 3: Employment Reduces the Poverty Rate of Single-Parent
Families, But Even With Employment, Many Single-Parent Families
are Poor
Authors’ calculations based on LIS data (Wave VIII). All data on 2010, except Hun-
gary (2012) and Japan (2008).
78
29
11
59
28
5
31
27
6
32
27
3
40
20
5
25
19
3
47
15
4
50
15
1
44
14
3
57
13
3
36
13
12
68
11
5
55
10
2
37
10
2
37
10
2
32
7
5
44
7
4
25
7
3
23
6
2
United States
Germany
Japan
Iceland
Netherlands
Luxembourg
Spain
Czech Republic
Italy
France
Greece
Hungary
Australia
Norway
Slovak Republic
Finland
Ireland
United Kingdom
Denmark
0 25 50 75
Poverty
2 Or more earners 1 Earner 0 Earners
7

Why is this the case, that even with employment many single-
parent families are poor? Single-parent families have dispropor-
tionately high rates of low-wage employment. Low-wage employ-
ment, using one common measure, is defined as earning less than
two thirds of the median wage. In the U.S., 35% percent of single-
mother families were low-wage and low-income workers from 1979
to 2011 (Albelda and Carr, 2014, p. 11). In fact, the U.S. generally
has a very large low-wage labor market, with a quarter of all work-
ers in low-wage employment. The OECD average is 17% (OECD,
2015, p. 290). The U.S. has a low minimum wage, weak collective
bargaining, and does not have active labor market policies that help
workers advance their skills for higher pay jobs.
The prevalence of working poor among single-parent families
suggests that market-income strategies focused on facilitating more
employment, will only partially reduce poverty. Hence, we revisit
disposable household income strategies and examine redistributive
family policy, with a particular focus on financial transfers to fami-
lies with children.7
In Figure 4, we compare poverty rates based on disposable house-
hold income to poverty rates based on household income before
child-related transfers. This provides an assessment of poverty re-
duction by child-related transfers. We highlight one key finding:
•Many countries have child-related transfers that signifi-
cantly reduce poverty among single-parent families. Child-
related transfers, on average, decreased poverty by 6%-point,
ranging from 27 percentage points in Ireland (from 49% to
22%) to little or no reduction in for instance Poland, Spain
and Greece.The United States does not have child allowances
and, although policies such as Temporary Assistance for Needy
Families (TANF) and the Earned Income Tax Credit (EITC) re-
duce poverty with 5 percentage points. Still, among these
OECD countries, the U.S. poverty remains the highest
8

Figure 4: The Effect of Child-Related Transfers On Reducing Poverty
for Single-Parent Families
Authors’ calculations based on LIS data (Wave VIII). All data on 2010, except Hun-
gary (2012) and Japan (2008).
39
33
37
27
25
23
38
22
49
22
26
21
25
21
20
20
20
20
21
20
23
19
18
18
25
16
22
16
34
13
19
11
18
10
10
9
19
8
United States
Germany
Japan
Australia
Ireland
France
Hungary
Spain
Greece
Czech Republic
Iceland
Italy
Luxembourg
Netherlands
United Kingdom
Norway
Finland
Slovak Republic
Denmark
0 25 50 75
Poverty
Disposable Household Income Income Before Child−Related Transfers
9

Conclusion
First of all, our findings suggest that the U.S., as compared to other
OECD countries, is quite exceptional in its inadequate redistributive
strategies for single-parent families. This is a well-known finding.
We then focused on market-income strategies that facilitate the
employment of single parents, motivated by our finding that poverty
rates based on market income differ widely across countries (Atkin-
son, 2015). We present new evidence that shows: (1) single-parent
employment rates are higher in countries with longer periods of paid
leave and higher expenditure on public childcare and preschool ser-
vices, and that (2) employment significantly (but not fully) reduces
poverty.
Even with the focus on market-income strategies, our findings
showed that the U.S. is still an exceptional case due to its lagging
policy to address the labor market inequalities. The point being
that the U.S. does not have national policies for paid leave and child
allowance, and provides little public expenditure on childcare and
preschool - all consequential to reducing poverty.
In the end, we returned to both redistributive and market in-
come strategies. We find that in addition to the above findings
that are market-income strategies, single-parents families remain
in poverty. Therefore, we find (3) that child-related transfers help
further reduce poverty. Our findings suggest that, to reduce poverty
among single-parent families, policy solutions should aim to both
bolster their market income and to increase the effectiveness of re-
distribution.
10

Notes
1This was calculated as a weighted cross-country average based on our pooled
dataset.
2We were surprised by the high share of men among single parents in Hungary;
we are exploring that in subsequent work.
3We identified single-parent families using the HHTYPE (household type) vari-
able in the LIS data. Single-parent families were defined as a household in which
a parent lives together with her/his child(ren), but without a partner. Other peo-
ple can live in the household too, but would not be the partner of the head of the
household.
4Market income was measured using the FACTOR variable, and disposable
household income using the DHI variable. Sampling weights were applied.
5The policy indicators used in Figure 2 originate from the OECD, and were ob-
tained from Thévenon (2011). Leave represents the number of weeks fully paid
(“full time equivalent”) maternity and parental leave. Childcare and preschool ser-
vices represent government expenditure (in US$ PPP) per child. Leave was mea-
sured in 2007 and childcare in 2005, ensuring that the policy measures precede
their presumed outcomes. In Figure 2 a few countries are missing due to missing
data on the family policies.
6Evidently, no causal claims can be made based on these bivariate associations.
In addition, these associations are not perfectly linear, and at each level of policy
provision substantial variation in single-parent employment exists. This suggests
that other factors play a role as well, as well as that paid leave and childcare can be
complementary. More detailed analyses on longitudinal data, presented elsewhere,
reached similar conclusions (Maldonado and Nieuwenhuis, 2015; Nieuwenhuis
and Maldonado, 2015). This research also highlighted the fact that all families
with children benefit from longer periods of paid leave, and that by facilitating
employment paid leave reduces the poverty gap between single-parent and two-
parent families. Unpaid leave was found to be ineffective.
7These transfers include universal measures, such as child allowances, trans-
fers that are targeted towards low income families, and tax related benefits such
as the Earned Income Tax Credit (EITC)
11

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