Child Poverty in Armenia - CRRC-Armenia

77 Pages·2006·0.45 MB·English

This survey was conducted through the CRRC Fellowship Program – a program of
the Caucasus Research Resource Center–Armenia (Eurasia Foundation), with
financial support from Carnegie Corporation of New York.

REPORT

CHILD POVERTY IN ARMENIA

Submitted to: CRRC-Armenia
Submitted by: Gohar Jerbashian, MS, MBA
Grant No: C05-7105

Contacts: 20 Saryan Street, Apt. 43, Yerevan,
Tel: 58-48-11 (home), [phone] (mobile)
e-mail: [email protected],

Yerevan - 2006
Acknowledgment

I would like to express my appreciation to my son Areg Jerbashian (a research team member) for
his hard and productive work in the research project. I would like also to extend my deep
gratitude to Mr. Bruce Jackan for his valuable comments and suggestions that enriched the
report.

Abstract:
In terms of indicators of human development, Armenia remains behind many developing and transitional
countries. According to statistics, every third resident of our country is poor and about 7.5 percent of the
population lives below the minimum subsistence level. The transitional period has left its greatest
negative impact on those in the population unable to earn a basic income due to various social risks.
Unemployment of parent(s), loss of a breadwinner, large families and other social risks result in a
desperate situation for numerous children. Children are at the greatest poverty risk especially in
developing countries with poor economies. Poverty is a blight denying poor children the opportunities
that others quite often take for granted. Recognizing that a poor child with no future prospectus is a huge
loss for the society and nation, reducing child poverty and laying ground for building up human capital
should be at the focus of state and society attention.
For the purposes of developing policies to eradicate child poverty the report touches different aspects of
child poverty, including negative consequences of poverty on intellectual development of children, access
to health and educational attainments, influence of early childhood development programs on better
prospectus, juvenile crime, and child labor. The report analyzes the social-economic conditions of
households with children, brings some measures of child poverty and social costs of childhood passed in
poverty. In general, the report stresses that poverty is not just lack of money and investing not enough in
child development might binging about persistence of poverty.

sa Classification Codes:
1939 adolescence & youth
2700 studies in poverty
SOPODA Classification Codes:
6141 poverty & homelessness
7200 social planning/policy

The statements made and views expressed are solely the responsibility of the author.
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CONTENT
EXECUTIVE SUMMARY................................................................................................................................4
1. CHIP CHILDREN AND PERSISTENCE OF POVERTY...........................................................................6
Poverty Is Not Just Lack Of Money.......................................................................................11
2. MEASURING CHILD POVERTY........................................................................................................14
Child Poverty: the Case of Armenia.......................................................................................17
3. CHILD RIGHTS AND CHILD PROTECTION IN ARMENIA.................................................................23
Poverty Family Benefit System..............................................................................................26
Child Protection Programs Implemented by International and Local Organizations.............30
4. HUMAN POVERTY: HEALTH AND EDUCATION..............................................................................32
HEALTH................................................................................................................................32
Access to Health Care...........................................................................................33
Life Expectancy....................................................................................................39
EDUCATION.........................................................................................................................41
5. JUVENILE CRIME.............................................................................................................................46
6. CHILD LABOR...................................................................................................................................53
CONCLUSIONS AND RECOMMENDATIONS................................................................................................57
LITERATURE..............................................................................................................................................60
ANNEXES....................................................................................................................................................63
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EXECUTIVE SUMMARY
Multi-children households are the most vulnerable groups in every country and in Armenia, in particular.
Children are the most vulnerable segment of Armenia’s population. Quite secure families after losing
their breadwinners fall into suffering and experience hardships in tackling numerous problems of raising
children and survival.
Government spending on health care and education remains low. For many poor families, the only way to
ensure that their children receive the neccessary healh care, nutrition, and education (free of extra pay) is
place them in special boarding schools or orphanages. School enrolment rates in Armenia are relatively
high, but so are absenteeism and dropout rates especially in high classes.
The poverty level of children under 7 was the highest among other age groups: in Armenia 35.5 percent
of preschool age children were poor and 7.4 percent very poor, in 2003 (correspondingly 36.6%/13.1% in
2002). The second highest level of poverty was in age group 7-16 for which the poverty incidence was
42.8 percent and extreme poverty rate was 11.5 percent in 2003 (accordingly 40.5%/17.1% in 2002).1
Social Snapshot and Poverty in Armenia, Statistical Analytical Report, on the basis of Integrated Living
Conditions Surveys (ILCS) of 1998/99 and 2004, presents improvements as it relates to poverty of
population in 2004 as compared to 1998/99. In 2004 as in 1998/99 as well as in 2002-2003, children
under 5 constituted the group most vulnerable to the risk of poverty. Despite the noticeable progress, 41.9
percent of children under 5 are poor and 8.0 percent were extremely poor, being the largest cohorts in
each category in 2004.2
Why so many children are poor? The main reason of this rests upon the fact that the poor families usually
have more children than average families. Additionally, poor families being unable to sufficiently invest
in education and health of their children expose them to high risk of persistent poverty as their earning
capacity is suppressed due to poor human capital accumulation.
Taking into account that poverty in childhood results in malnutrition, loss of health, and termination of
education, all of which are strong causes for everlasting and deepening of poverty, the probability of
poverty defeat is extremely low for those who experience poverty in childhood. The risk of persistence of
poverty is very high.3 Malnutrition can begin in-uteri and have life-long consequences on health
including cognitive development. In general, physical environment, parental styling, cognitive
stimulation, heath at birth, childhood health, child care quality are factors affecting the child’s intellectual
development.4 Child poverty includes not only material deprivations, but also, which is much more
important, loss of opportunities for human development. Each poor child is a potential lost “human
capital” for a country. Because of lesser life expectancy (due to higher mortality rates) and lower level of
literacy (because of higher drop out rates) poor children lack the opportunity to accumulate knowledge
and skills enough to sustain them in the future. This urges authorities and the society take necessary steps
to support the poor families as long-lasting poverty may result in spreading the scourge and deterioration
of human capital, which is a basement for progress.
Child poverty is recognized as a severe problem also in devloped coutnries: nearly one in five children
under age six lives in poverty in the United States. Many developed countries, for example Germany,
Canada, and the United Kingdom, have alreasy developed and adopted National Action Plans to a society
free of child poverty. Child poverty eradication programs were adopted by many developed International
experience demonstrates that providing with a high quality Early Childhood Development (ECD) has a
substantial payoff for governments and taxpayers in the future. As those children grow up, costs for
remedial and special education, criminal justice, and welfare benefits decline.5

1 Social Snapshot and Poverty in Armenia, NSS, 2003, p. 120
2 Social Snapshot and Poverty in Armenia, NSS, 2004, p. 47
3 Omer Moav, Cheap Children and Persistence of Poverty, p. 1
http://micro5.mscc.huji.ac.il/~melchior/cheap.pdf#search='Omer%20Moav,%20Cheap%20Children%20and%20Per
sistence%20of%20Poverty'
4 Guo Guang and Kathleen Mullan Harris, , The Mechanisms Mediating the Effects of Poverty on Children’s
Intellectual Development, Demography, V. 37, No.4, 2000, pp. 431-447, p. 437
5 Robert G. Lynch, Exceptional Returns, Economic Policy Institute, Washington, 2004, p. viii
4
The strategic approach in fighting child poverty should combine direct government involvement in
mitigating the negative influence of poverty on children with measures to advocate people lift themselves
out of poverty through work. In the case of child poverty, covering poor children with quality state
funded early childhood development programs as well as raising lone parent employment are especially
essential. The programs should assure that all children have the best possible start in life and to provide
equal opportunity so that each child can fulfill his/her potential.
The Research Project supported by Carnegie Corporation of New York and the Eurasia Foundation
(through CRRC-Armenia) intends to investigate Child Poverty in Armenia. The proposed research aims
at highlighting and suggesting ways of addressing the widespread, yet under-acknowledged, problem of
child poverty in Armenia.
Child poverty besides its purely “measurable” status that is possible to describe by some quantitative
indicators like income level and housing conditions, also reflects the condition of social activity/inclusion
of a child in socially acceptable activities and hence requires analysis of some qualitative indicators, like:
access to quality health care, educational attainments, as well as access to and attainment of some goods
and services that are customary for a given society. The research is based on the analysis of the CRRC
Data Initiative and Poverty Family Benefit datasets, as well as findings of integrated household surveys
in Armenia of different years and other data sources.
Section 1 of the analytic report summarizes content analysis of some scientific research papers
investigating different aspects of child poverty. Particularly, the sector presents on how not investing in
child “quality” improvement may result in persistence of poverty, and presents the mechanisms through
which poverty affects a child's intellectual development, the sector stresses also that poverty is not just
lack of money.
Section 2 investigates child poverty assessment approaches and measurement indicators utilized in the
UK as well as other developed countries. The second part of this section makes an attempt to assess child
poverty in Armenia based on the available data. For this purpose general poverty and inequality
indicators as per HH Surveys were analysed. CRRC Data Initiative databases and Poverty Benefit System
(FPB) recipients’ databases were analysed.
Armenian government has been trying to address children’s issues through ratifying conversion on “Child
Rights” and joining many international treaties, adopting and amending great many laws and normative
acts. Selective articles and provisions from international treaties and Armenian national legislation
aiming at child rights are presented in section 3. It presents also state funded Poverty Family Benefit
System and child protection and human capital development programs (mostly pro-poor oriented)
implemented by international and local organizations.
Sector 4 focuses on two global dimensions of non-income poverty that have crucial influence on shaping
the future of a child, namely health and education. Poor health and low level education can be the result
and reason of poverty. Poor people are in a vicious circle: because of lack of means they have fewer
opportunities to make sufficient investments in health and education due to which their ability to work or
chances to get well paying jobs reduces and the person becomes poorer.
Sector 5 focuses on juvenile crime which not only harms adolescent individuals but also hampers the
country’s social and economic development, and brings damage to the most important societal values.
Juvenile crime has specific causes and tackling those through targeted social policies before children
come into contact with the law is clearly in the best interests of the child, and of the whole society.
Sector 6 presents analysis of the child labor that is quite spread among school age children first of all in
expense of schooling and health: nearly 8.0 percent of working children work more than 56 hours a week,
which is too much even for adults. Nearly all employed children work on oral agreement due to which
their labor or social rights are not protected. Meanwhile, we strongly believe that early employment with
non attainment of necessary knowledge and skills ultimately will weaken working children’s (mostly
performing non-qualified work) opportunities to attain competitive edge in the labor market in the future.
The final section summarizes the findings of the analysis and presents some recommendations aiming at
reducing (as a short and mid term plan) and eradicating (as a long-term plan) child poverty in Armenia.

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1. CHIP CHILDREN AND PERSISTENCE OF POVERTY
The title of Omer Moav’s paper, discussed below, is taken as the title of this section as the it
conveys the main notion that we would like to support in this report: if not enough invest in
child development then a child is at high risk of falling in persistent poverty.
Taking into account that poverty in childhood results in malnutrition, loss of health, and termination of
education, all of which are strong causes for everlasting and deepening of poverty, the probability of
poverty defeat is extremely low. Even more, the passage of poverty from generation to generation is
almost unavoidable.6 Child poverty includes not only material deprivations, but also, which is much more
important, loss of opportunities for human development. They are more likely than non-poor children to
experience a number of adverse outcomes including poor health and death, failure in school, out-of-
wedlock births, and violent crime. Each poor child is a potential lost “human capital” for a country.
Because of lesser life expectancy (due to higher mortality rates) and lower level of literacy (due to
highest drop out rates) poor children have the highest “negative” input in Human Development Index.
This urges authorities and the societies take necessary steps to support the poor families as long-lasting
poverty may result in spreading the scourge and deterioration of human capital, which is a basement for
progress.
The term “culture of poverty” was introduced by anthropologist Oscar Lewis.7 While policy analysts
and other population researchers believed the poor to be crude and irresponsibly self-indulgent, he
revealed that poverty itself generated a way of existence that constituted a unique “culture of poverty”.
Lewis and his proponents assert that the poor are poor because they perpetually misbehave and they
refuse to adopt the middle-class values and goals that would guide them out of poverty, their disorganized
hedonism was both an indicator of poverty and the reason poor were chained to poverty, generation after
generation. Politicians and policymakers allege that it is “futile and wasteful to mount public policy
initiatives to ameliorate the lives of the poor because the culture of poor people themselves mandates
endemic and enduring poverty.” They came to the conclusion that poverty is something more than just
lack of material resources. As it turned out, living in chronic need develops special sets, values and stable
behavior patterns which are passed on "as inheritance" and which in their turn promote the
intergenerational poverty. The analysts however, rejected considering the roles of education, substandard
housing, poor health, inadequate medical care, job opportunities, and racism8 in generating and
prolonging poverty. In the contemporary world social exclusion also should be taken into account for
dealing with the poverty, especially if it relates to child poverty.
Omer Moav in his paper “Cheap Children and Persistence of Poverty” develops a theory of fertility
(resulting in the quantity of children) and child educational choice (influencing quality of children) that
offers an explanation for the persistence of poverty within and across countries. Key assumption that was
made for the study was that individuals’ productivity increases with their own human capital. Therefore,
this assumption generates a comparative advantage for the poor in child quantity, whereas high wage
(educated) individuals have a comparative advantage in raising quality children. In contrast to poor
households that as a rule choose relatively high fertility rates with relatively low investment in their
children’s education, as a result of which their offspring are poor as well, high-income families choose
low fertility rates with high investment in education of their offspring, and therefore, high income persists
in the dynasty. In addition, “the high fertility rates in poor economies dilute physical capital accumulation
and amplify the effect of child quality choice on economic growth.”9 For low wage earners, the
opportunity cost of time is low, and hence children are “cheap” and the relative price of child quantity
increases with the wage rate. Despite the normality of people’s demand for children, the relationship
between the quantity of children and income can be negative: while the increase in income has a direct
positive effect on the quantity of children, it also increases the demand for their quality and thus their

6 Omer Moav, Cheap Children and Persistence of Poverty, 2003, p. 1
http://micro5.mscc.huji.ac.il/~melchior/cheap.pdf#search='Omer%20Moav,%20Cheap%20Children%20and%20Per
sistence%20of%20Poverty'
7 La Vida: A Puerto Rican Family in the Culture of Poverty, San Juan and New York,
https://secure.college.hmco.com/passkeyauth/college_loginandregister.html
8 Instead of racism we can think here as any kind of social exclusion.
9 Omer Moav, “Cheap Children and Persistence of Poverty , 2003, p. 2
6
cost, negatively affecting their quantity. In general, the cost of an additional child increases with the
desired level of child quality.10
Evidence suggests that parents’ education positively affects children’s education, there exists a trade-off
between quantity and quality of children, fertility is negatively correlated with education, and there is a
strong negative correlation between women’s schooling and fertility, a strong positive effect of parental
schooling on children’s schooling, and schooling affects on fertility mainly through increased investment
in child quality.11 In addition, mother’s education is more influential on offspring educational attainments
than that of father’s.12 The decline in fertility as incomes grow is the result of the rising opportunity cost
of well educated women’s time, who as a rule prefer career advancement.
The author state that “dynasties within a country can converge to one of the two equilibria; either a low
education - high fertility equilibrium, or a high education - low fertility equilibrium.” Given the negative
cross-country relationship between fertility and growth and the positive cross-country relationship
between education and growth, countries can converge to two different levels of income per capita. I
general the high-income steady state is characterized by high levels of physical and human capital per
capita and low rates of fertility, in contrast to the low-income steady state.13
The author concludes that individuals with a high level of human capital would invest highly in their
offspring’s education, even in poor economies and poverty can persist in wealthy countries, and wealthy
(educated) individuals can exist in the long run in the poor countries.14 Research confirms that a rise in
the rate of technological progress increases the rate of return to human capital, encouraging parents to
prefer child quality to child quantity.15 Technological progress brings about a demographic transition and
an opportunity to escape from a poverty trap even in low income countries.
Manasyan and Jrbashyan through investigation of relationships between the rates of growth and total
factor productivity growth, physical and human capital accumulation, institutional change along with the
initial conditions, concluded that since the 1970s productivity growth is attributable to growth in
educational attainments and sustainable economic growth for Armenian is possible only through human
capital accumulation. Labor force qualification (manifestation of human capital quality) growth is
16
critical for Total Factor Productivity (TFP) growth.
An investigation (conducted by Guang and Harris17) of the multiple mechanisms through which poverty
affects a child's intellectual development highlight the most critical factors that shape the child’s
intelligence. The analysis revealed five latent factors (cognitive stimulation, parenting style, physical
environment, child's ill health at birth, and ill health in childhood) that along with child care mediate the
effects of poverty and other exogenous variables on the intellectual development of children. The
intellectual development of children was measured by four cognitive tests administered to the
respondents of the National Longitudinal Survey of Youth (NLSY), which included 12686 youths age 14-
21 (1979).
The authors conclude that the influence of family poverty on children's intellectual development is
mediated completely by the intervening mechanisms measured by the above noted latent factors. Second,
the analysis indicates to “cognitive stimulation in the home, and (to a lesser extent) to parenting style,
physical environment of the home, and poor child health at birth, as mediating factors that are affected by

10 IBID, p. 3
11 IBID, p. 1
12 Irina Shurygina, Poverty Is Not Just Lack of Money, Women Plus… (Social Educational Magazine), #1, 1999
(Èðèíà Øóðãèíà, Áåäíîñòü – íå ïðîñòî íåäîñòàòîê äåíåã) http://www.owl.ru/win/womplus/1999/bedn.htm
13 Omer Moav, Cheap Children and the Persistence of Poverty, p. 1
14 IBID, p. 3
15 IBID, p. 5
16 Heghine Manasyan and Tigran Jrbashyan, Explaining Growth in Armenia: Pivotal Role of Human Capital, GDN,
2002, p. 11, GDN, http://www.gdnet.org/pdf/draft_country_studies/Armenia_final.pdf
17 Guang Guo, Kathleen Mullan Harris, The Mechanisms Mediating the Effects of Poverty on Children's Intellectual
Development, Demography, Volume 37, No. 4, November 2000,
http://muse.jhu.edu/demo/demography/v037/37.4guo.pdf, p.
7
lack of income and influence children's intellectual development.”18 Understanding the mediating
processes through which poverty affects children’s intellectual development, might be useful in
disclosing the ways through which poverty puts forth its influence on intellectual development of
children and hence might be useful in developing policies that would contribute to reducing the negative
effect of poverty, which would assist them in overcoming poverty through human capital accumulation.
Table 1-1. Three Mediating Factors
Factor 1. Factor 2. Factor 3.
The Items of the NLSY Preschool HOME Cognitive Parenting Physical
Stimulation Style Environment
How often mother reads to child 0.63
Number of children’s books child has 0.60
Child has a record/tape player 0.42
How often child is taken to museums per year 0.39
Number of magazines family receives 0.37
Mother conversed with child twice or more 0.71
Mother answered child’s questions verbally 0.65
Mother’s voice showed positive feeling toward child 0.52
Mother hugged and kissed child 0.36
Home interior is reasonably clean 0.87
Home interior is minimally cluttered 0.66
Play environment appears safe 0.39
Home interior is not dark or monotonous 0.35
Proportion 0.50 0.33 0.18
Number of Items 5 4 4
Source: Guang, Harris, The Mechanisms Mediating the Effects of Poverty on Children's Intellectual Development,
p. 438
Studies demonstrate that “quality of child care contributes to cognitive development, children’s
perceptions of their own competence, and social development.” The authors argue that the effects of
poverty on intellectual development of children are mediated more by quality of child care than the
amount of child care.19 Investigations show that mother’s education and age; sibship size; mother reads,
talks to child, answers verbally with positive voice; availability of books, magazines, and tape/record
player; visits to museum; safe, tidy, and not dark home; and many other factors shape the environment
favourable for intellectual development of a child. Table 1-1 presents the variables that were used for
constructing three mediating factors: physical environment at home, level of cognitive stimulation, and
parenting style.
The authors of the “Mechanisms Mediating the Effects of Poverty on Children's Intellectual
Development” paper suggest that “intervening in children’s cognitive environments and adults’ parenting
behavior is probably more effective and less expensive than intervening in children’s home physical
environment.” Programs that increase the amount of cognitive stimulation in the home or encourage
positive parenting behavior and interactions with children may improve the cognitive outcomes
associated with poverty among children. Programs like “Head Start” that provides poor families with
educational materials such as educational toys and games, books, and magazines that stimulate children’s
intellectual curiosity and encourage their learning experience, might be duplicated. More directly still,
high-quality all-day free educational TV programs would greatly enhance poor children’s cognitive
environment. These interventions are not expensive; yet they directly affect the mediating mechanisms
20
that our analysis finds most influential for young children’s intellectual development.
Figure 1-1 shows the six mediating mechanisms between poverty and intellectual development: the long
arrows representing the direct effects of poverty and other exogenous factors on intellectual development,

18 IBID, p. 431
19 IBID, p. 434
20 IBID, p. 443
8
and the thick and short arrows representing the effects of the exogenous factors other than poverty on the
mediating mechanisms.
FIGURE 1-1. ESSENTIAL FEATURES OF A STRUCTURAL EQUATION MODEL FOR THE MEDIATING
MECHANISMS OF THE EFFECTS OF POVERTY ON INTELLECTUAL DEVELOPMENT

Source: Guano, Harris, Mechanisms Mediating the Effects of Poverty on Children's Intellectual Development, p. 437
9
Economic, fiscal, and social benefits of investment in early childhood development (ECD) are discussed
in the article “Exceptional Returns” by Robert Lynch.21 Early studies of the effectiveness of ECD
programs demonstrated remarkably higher IQ scores of ECD program participants than those who did not
take part in such programs. However, with passage of time the IQ scores of these two groups leveled out
and the value of ECD programs was questioned. Nonetheless, long-term studies of ECD program
participants illustrate significant benefits of the program that in effect bring sustainable results:
− Higher levels of verbal, mathematics, and intellectual achievement
− Greater success at school, including less grade retention and higher graduation rates
− Higher employment and earnings
− Better health outcomes
− Less welfare dependency
− Lower rates of crime, and
− Greater government revenues and lower government expenditures.22
Evaluations have established that children who participated in well-designed and well-executed ECD
programs are more successful in school and in life after school contrary to those who are not enrolled in
high quality programs. The participants of the high quality ECD programs are more likely to have
“higher scores on math and reading achievement tests, have greater language abilities, are better prepared
to enter elementary school, are more likely to pursue secondary education, have less grade retention, have
less need for special education and other remedial coursework, have lower dropout rates, have higher
high school graduation rates, higher levels of schooling attainment, improved nutrition, better access to
health care services, higher rates of immunization, better health, and experience less child abuse and
neglect. These children are also less likely to be teenage parents and more likely to have higher
employment rates as adults, higher earnings as adults, greater self-sufficiency as adults, lower welfare
dependency, lower rates of drug use, show less-frequent and less severe delinquent behavior, engage in
fewer criminal acts both as juveniles and as adults, have fewer interactions with the criminal justice
system, and lower incarceration rates. The benefits of ECD programs to participating children enable
them to enter school “ready to learn,” helping them achieve better outcomes in school and throughout
their lives. Parents and families of children who participate in ECD programs also benefit. For example,
mothers have fewer additional births, have better nutrition and smoke less during pregnancy, are less
likely to abuse or neglect their children, complete more years of schooling, have higher high-school
graduation rates, are more likely to be employed, have higher earnings, engage in fewer criminal acts,
have lower drug and alcohol abuse, and are less likely to use welfare.”23
David Mayer-Fulkes who investigated the effects of health and education investment for the children
concluded that “children participating in ECD programs receive psychosocial stimulation, nutritional
supplements, health care, and their parents receive training in effective childcare. Grade repetition and
dropout rates are lower, performance at school is higher, and the probability that a child will progress to
higher levels of education increases. ECD also benefits life long health. It is associated with decreased
morbidity and mortality among children, fewer cases of malnutrition and stunting, improved personal
hygiene and health care, and fewer instances of child abuse. ECD also leads to better socially adapted
adults who are less aggressive, more cooperative, and show reduced criminal behavior and less
delinquency.”24

21 Robert G.Lynch, Exceptional Returns: Economic, Fiscal, and Social Benefits of Investment in Early Childhood
Development, Economic Policy Institute, http://www.epinet.org/books/exceptional/exceptional_returns_(full).pdf
22 IBID, p. 3
23 IBID, p. 4
24 David Mayer-Fulkes, Market Failures in Health and Education Investment for the Young, GDN, 2003, p. 9
http://www.gdnet.org/pdf2/gdn_library/awards_medals/2003/r_m/reforms_poor/mayerfoulkes.pdf
10