Globe and Mail

Income prospects equal for children, study finds

Tuesday, June 4, 2002  Print Edition, Page A19
The Globe and Mail

Children who grow up poor in Toronto's middle-income areas do not earn more as adults, and are no less likely to need welfare than their counterparts from the city's poorer neighbourhoods, a Statistics Canada report released yesterday reveals.

In spite of assumptions that children living among more affluent neighbours would reap the benefits of improved public services, better role models and more valuable social networks, University of California, Berkeley, graduate student Philip Oreopoulos has found instead that "neighbourhood quality does not make much difference to a youth's chances for labour market success."

Mr. Oreopoulos studied residents in public-housing units scattered throughout Toronto. He believes that using such subjects -- who have no choice as to where they live, but still inhabit a wide variety of residences -- allows him to break new ground with his research.

He noted significant differences between the large projects built in the early days of public housing and the smaller and more widely spread projects built since the early 1970s.

These smaller projects, often built in suburban areas against the objections of neighbours, may well be more pleasant and safer, he conceded, but they are not more likely to produce financially successful people.

He pointed out that differences in income, likelihood to rely on social assistance, extent of schooling and employability measure small enough as factors to be insignificant. They are "robustly measured close to zero," he writes.

Much more influential, he found, are as-yet unexplained differences within families, leading to some people earning far more than their siblings.

As such, attempts to improve prospects for low-income children would do better to address "household distress and family circumstance" than to try to improve residential conditions, he concludes.

The residents of lower-income areas were found to have an average income of $20,950, marginally lower than the average $21,461 earned by children who grew up in middle-income areas.

Also only slightly different were the number of low-income-area people who have turned to social assistance. The report found that between 1993 and 1996, 32 per cent of those from poorer neighbourhoods needed welfare for at least one year. Thirty-one per cent of those who grew up in middle-income areas used welfare for at least one year during that period.

Similarly consistent was the number of years these people had spent in school. The people in low-income areas spent on average 12.3 years in school, slightly higher than those from middle-income areas, at 12.2 years each.

City Councillor Olivia Chow -- whose ward includes some of the country's richest and poorest residents and who sits on the board of the Toronto Community Housing Corporation -- was not surprised to hear about Mr. Oreopoulos's findings.

"One of the things that we are finding is that education is a great equalizer," she said.

The school board has for decades used an index to rate schools across Toronto's neighbourhoods and has allocated extra money to those in needy areas, she said. "I suspect [these findings reflect] 30 years of this program having an impact."

Housing location found to be irrelevant

Part of this study included comparing the characteristics of the head of the household from both the largest and smallest public housing projects.

  All households Households
with children
No high school diploma 47.2% 44.0% 47.1% 44.3%
BA or greater 6.5% 7.0% 6.2% 6.1%
Median income $10,583 $13,272 $12,589 $14,160
Percent on public assistance 53.8% 45.2% 57.9% 54.1%
Number of households 923 770 529 479

Source: Statistics Canada

Copyright © 2002 Bell Globemedia Interactive Inc.