August 25, 2009
Every Child Counts has just released a report written by Infometrics entitled The nature of economic costs of child abuse and neglect in New Zealand.
The New Zealand Government has substantially increased its investment into the prevention of child abuse and neglect in recent years. In the 2004 Budget departmental appropriations for education and preventative services for children amounted to just $16.1m, or 3% of the Child, Youth and Family appropriation in 2004/05. In the 2008 Budget this commitment had risen to $166m.
However, adapting international cost estimates to the New Zealand situation suggests that every year child abuse and neglect generates a long term bill that is equivalent to around $NZ2bn (or over 1% of GDP).
Based on US studies, just 32% of this cost is likely to be the direct consequences of child abuse and neglect (eg health care, child welfare service, and justice system costs). A further 36% of costs relate to ongoing health, education, and criminal consequences for child abuse victims in later life. The final 32% of costs result from a decline in productivity as victims fail to meet their potential (Wang and Holton 2007).
The growing focus on prevention is a welcome development that reflects the current understanding of child development and the biological underpinning of this development process:
- The architecture of the brain and the process of skill formation are both influenced by an inextricable interaction between genetics and individual experience.
- Both the mastery of skills that are essential for economic success and the development of their underlying neural pathways follow hierarchical rules in a bottom-up sequence such that later attainment build on foundations that are laid down earlier.
- Cognitive, linguistic, social, and emotional competencies are interdependent, all are shaped powerfully by the experiences of the developing child, and all contribute to success in the work place
- Although adaptation continues throughout life, human abilities are formed in a predictable sequence of sensitive periods, during which the development of specific neural circuits and the behaviours they mediate are more plastic and, therefore, optimally receptive to environmental influences.
Brain development is continuous over many years. For children at unusually high risk, neuroscience provides a compelling argument for beginning intervention programmes at birth, if not prenatally. Developmental research shows that children master different skills at different ages, which suggests that opportunities for a variety of effective interventions are present throughout early childhood.
Looking forward the critical issues that still need to be resolved are:
- Is the current level of government spending on preventing child abuse and neglect sufficient?
- How can one ensure that the appropriate level of resourcing is attained and maintained?
- What institutional arrangements will encourage the delivery of effective preventative services?
Answering the first question will require further New Zealand specific research, and this will also contribute to debate about the level of public commitment to the issue. Grunewald and Rolnick (2006) suggest an elegant approach to ensuring public commitment is maintained and which can foster innovation in the delivery of services aimed at reducing the incidence to child maltreatment: the creation of a public endowment. Grunewald and Rolnick consider the benefits of such an approach are that:
- It encourages private, innovative, and targeted provision of early childhood services (small scale, high quality interventions have demonstrated greater social returns than broad-based publicly provided schemes).
- It represents a permanent commitment and allows leverage of resources from public and private stakeholders.
- A permanent commitment sends a market signal to service providers that they can expect a consistent demand for their product.
- By drawing up a business plan that demonstrates it can win service provision contracts, a prospective provider can leverage funds for capital expansions as lenders will be assured by the stability of the early childhood development endowment.
This report covers the consequences of child abuse and neglect, the case for preventative intervention, and policy issues related to the promotion of a preventative approach to child abuse and neglect.
Download The nature of economic costs of child abuse in New Zealand.
June 4, 2009
The cost of child maltreatment is staggering, yet our willingness to live with the consequences suggests that we remain in a state of denial. The consequences of child maltreatment include:
- Human costs to victims: child fatalities, child abuse related suicide, medical costs, lower educational achievement, pain and suffering.
- Long term human and social costs: medical costs, chronic health problems, lost productivity, juvenile delinquency, adult criminality, homelessness, substance abuse, and intergenerational transmission of abuse.
- Costs of public intervention: child protection services, out-of-home care, child abuse prevention programmes, assessment and treatment of abused children, law enforcement, judicial system, incarceration of abuse offenders, treatment of perpetrators, and victim support.
- Costs of community contributions by volunteers and non-government organisations.
Translating overseas estimates of the costs of child abuse and neglect to the New Zealand context suggests that it imposes long term costs in the vicinity of $2 bn per year, ie in excess of 1% of GDP every year. Roughly one third of this cost relates to dealing with immediate consequences (eg health care, child welfare service, and justice system costs). Another third relates to ongoing health, education, and criminal consequences for child abuse victims in later life. The final third results from a decline in productivity as victims fail to meet their potential.
Reducing the incidence of child maltreatment would not only have a profound impact on the quality of life for potential victims but, by reducing our need to support victims, it will also materially improve the wellbeing of the rest of society.
Prevention is more effective than correction. The main reason for this is that maltreatment has lifelong impacts on the victims. The trauma of maltreatment can inhibit brain development in ways that mars intellectual, communication, social, and emotional abilities. Victims of child abuse face a greater risk of failing at school and of being emotionally alienated from society. That so many victims of maltreatment go on to lead essentially normal productive lives is a testament to the general resilience of human nature. But these victims have done it tough. Life could have been so much better and productive if their formative years had been less stressful. And then there are the walking disaster areas who go on to impose huge costs on themselves and the rest of society.
Abusive behaviour is not constrained by socio-economic status, but research has identified a number of risk factors that increase the potential for child abuse. Key markers of child maltreatment include:
- Parental age and education, eg young or uneducated parents might not be naturally as well equipped to deal with the stresses of parenthood.
- Parental mental health problems such as depression.
- Social deprivation, in particular a lack of wider family support.
- Alcohol or other drug dependency issues.
- Past exposure of parents to interpersonal violence or abuse.
Poverty might exacerbate these pressures, but it is not clear that it is a root cause.
In New Zealand, agencies such as Barnardos, Plunket, Preventing Violence in the Home and many others play a critical role in supporting families to do their best for children.
Also the government’s commitment to preventing child maltreatment has increased considerably in recent years. Child, Youth and Family’s appropriation for education and preventative services for children increased from $16m in the 2004 Budget to $166m in the 2008 Budget. This increased spending has the potential to reduce the incidence and therefore the future cost of child maltreatment. But is it sufficient? Will services provided be effective? And what guarantee have we that the current commitment will be maintained?
A common problem with government sponsored programmes is their top-down, planned design. Large-scale programmes may miss the factors that made small-scale programmes a success or have difficulty obtaining success in different environments. Large programmes also have a propensity for diverting resources away from children and their families into running the bureaucracy and creating an overarching infrastructure.
Large-scale programmes can succeed if they have the following three features:
- The programmes focus on at-risk children and encourage direct parent involvement.
- There is a long term commitment to reducing the incidence of child maltreatment, including changing attitudes about physical punishment.
- The programmes reward successful outcomes in order to encourage high quality and innovative practices.
A way of maintaining commitment would be to create a public endowment that would fund the provision of child and parent support services. A fund would clearly signal an ongoing commitment to reducing the incidence of child maltreatment, a focus on service rather than bureaucracy, a reassurance to service providers that there will be consistent demand for their services, and a willingness to fund effective, specialised and innovative services.
David Grimmond, Senior Economist, Infometrics Ltd
