Household Economic Exclusion among Danish Children: Evaluating Independent and Joint Risks of Income Poverty and Parental Labor Market Exclusion

Abstract

Low household income and social exclusion increase children’s risk for unsuccessful transitions to adulthood. Yet we know little about children’s cumulative risk of experiencing poverty and parental labor market exclusion during childhood and to what extent these circumstances co-occur. We estimate annual separate and joint cumulative period risks for experiencing living in a household with income below the Organisation for Economic Cooperation and Development poverty line (poverty) and a low-work intensity household (labor market exclusion) for children in Denmark from 2003 to 2018. Both indicators identify similar children, with the largest overlap between the joint indicator of both poverty and labor market exclusion (economic exclusion) and the income poverty indicator. Furthermore, considering estimates produced from poverty and labor market exclusion measures, as well as from a combined measure, helps us demonstrate the role of business cycle volatility in each: procyclical with respect to poverty and countercyclical with respect labor market exclusion.