Fences and Ambulances: an Economist Looks at Family Policy

Paper for ‘The Children’s, Young Persons and their Families Act -A Review’, A Public Seminar. Palmerston North College of Education, Friday July 10, 1992

Keywords Health; Social Policy

It is a curious, if instructive, oddity that our most famous quotation about health promotion does not appear in the Heineman Dictionary of New Zealand Quotations. We talk about the need to put fences at the top of the cliff, but the thrust of our social policy is the ambulance at the bottom -although in recent years it has been more like a cardphone from which one can ring a private cab. Fences and ambulances represent quite different ways of responding to social policy problems. The more erudite might refer to holistic social policy versus pathological social policy.

There is a vast difference in headspace between the two approaches. Much of social policy and medicine is essentially about ‘pathology’, that is the study of the diseases and the suffering they generate. I do not want to be critical of this approach, and I well understand its urgency. If someone comes to you in with a heart attack, an overview of the functioning of the heart is not so important just then as cardiac resuscitation.

The difficulty is we may begin to focus solely on the treatment of heart disease, and never look at the conditions of the heart of the whole population. Now of course the Heart Foundation has eschewed such a narrow focused approach and, to its credit, it has been as concerned with the prevention of heart disease as it has with treatment. Nevertheless in my experience realms of health and social policy focus on the pathological, and ignore the totality

Let me give you an example from a recent report which reviews the Children, Young Persons and their Families Act.[1] This Mason report is very thorough but it focuses exclusively on those young persons who are in trouble. You might say that is the focus of the Act. That is exactly my point. The policy framework is about some people in a pathological state – perhaps we call the disease ‘delinquency’ .A total view would be to ask why do some kids end up under the provisions of the Act, and the vast majority do not.

Understandably the report does not pursue this approach, since it was not in its remit. But an indication of the headspace of the report is its recommendation on research. Let me say I am all in favour of research, much of my life is committed to the pursuit of quality research, in an environment which discourages serious intellectual activity. But the research the report proposes involves ‘undertak(ing) independent, longitudinal research to evaluate the outcomes for the young children and their families affected by the Act.’ (p.34)

There is no mention of what happens to the rest of the population, so what the researchers will be looking at is an extreme part of the tail of the distribution of the total behaviour . There will be no scientific controls, except prejudice, on what is more typical experiences, and no attempt to study what are the factors which put some families into the extreme tails.

What did I mean by ‘no scientific controls, except prejudice’? The 1976 Department of Social Welfare study Ex-nuptial Children and their Parents had no scientific controls of those children who were not.[2] The study followed them lip over the years and found various proportions experienced changes of family situation -say from one to two parent families, perhaps and back -and at the age of five when the study stopped certain proportions were still living in single parent homes. I am deliberately not giving you those proportions, partly because by now they may well be out of date, but also because I cannot give you the figures for the comparable children born in wedlock. In their first five years many of those too will have experienced change of family situation, and by the time they are five many of those will now be in single parent homes. What is the use of the data on a subgroup of the population if we do not have comparable data on the whole population? Without it we are likely to feed in our implicit prejudices about normal family life for comparison.

Perhaps the best example I know of pathology dominating the totality is over alcohol use. Now alcohol abuse has appalling outcomes to the drinker’s families, friends, and even strangers, as well as to him or herself. As a result, for over half a decade we controlled everybody’s access to alcohol in an attempt to deal with alcohol abuse. In my experience even today parts of alcohol policy are still dominated by the pathology of the alcoholic, with insufficient consideration given to the majority of drinkers, the mechanisms of how a minority of those users become abusers, or how we can prevent the shift from use to abuse.

Underlying this approach is an account of the population. A simple representation might be a frequency distribution for which the horizontal axis is some behavioural variable whose right hand extreme is pathological. It might be the amount of alcohol imbibed, or an index of juvenile delinquency, or the degree of heart disease or whatever. Figure 1 shows you one such distribution. To keep it simple, the figure shows that above a certain ]eve! the behaviour is deemed pathological. Note that this occurs in a small part of the tail of the distribution, and the social statisticians among you will immediately recognjse that there are grave difficulties characterising the behaviour in a distributional tail. If you are sceptical, consider the plight of the Electricorp statisticians. who on the basis of around sixty years data tell us that we have a one-in-a-hundred-year drought, which appear to occur about every fifteen years.

FIGURE 1: Shifting the tail

The standard pathological approach to treatment attempts to shift those in the tail back into he area of non-pathology. Typically there are gradations of disease so the complete diagram is more complicated than the diagram, but the arrow illustrates the shift. I do not intend this to seem absurd. I am a great believer in the strategy that if you see a child heading tor a fire, you grab them, and afterwards you consider issues of better education, fireguards, and behavioral control and monitoring.

However my point is that there is a second approach, which asks whether we can shift the whole distribution, rather than just the right tail. I have illustrated but one example in Figure 2, where some measure shifts the whole distribution to the left. One little statistical trick in this presentation is that for a small change in the mean of the distribution you get a large fall in the proportion in the disease tale. That is not always true, but it is encouraging that the holistic strategy may place small, if any, impositions on the population as a whole, but make big reductions in those in need.

FIGURE 2:Shifting the Distribution

Of course there are a number ways the shape of the distribution could move. At this point I merely want to contrast the tail focus of the pathological approach, with the whole of the relevant distribution focus of the holistic approach. For that in social policy is often the choice -pathology versus holism .

I have already indicated this is not a simple dichotomy. Both approaches have a role. My guess is that it will be rare for a holistic approach to move the distribution far enough to the left so there is no-one left in the disease tail. For instance sensible education about life and easier access to contraceptives might reduce a lot of unwanted teenage pregnancies, but some sperm will still slip past the guards. We will still need abortion services, and still need programs to assist those pregnant teenagers who decide not to use them. The pathology program will still be there. The aim is to reduce them.

Moreover holistic programs incur social costs too. The prohibitionists wanted to shift the frequency distribution for alcohol consumption to the point where everyone was up against the zero left hand vertical axis, ignoring the benefits that alcohol appears to give to many moderate drinkers.

What are the intervention instruments which a holistic approach can use? I am just going to look at some economic ones. Figure 3 shows a simple representation of the relationship between the economy and social wellbeing and health including, you will observe, a feedback loop. Among the impacts trom the economy into the health/welfare nexus are information, commodities, employment, income, housing, and status.

FIGURE 3: The economy -welfare interaction.

Because there is limited time, I cannot deal with all the effects, but just examine some main ones of interest to economists, and which have been important in the policy debate. I have mentioned briefly the role of education in information, and I am going to neglect commodities, housing, and status.

We know most about the effects of unemployment on health, and since these also shed some light on income effects, we start there.[3] I have not time here to go through all the international research but to summarise, they show that for many people the health effects of unemployment are disastrous. Individual studies may have interpretational problems, not least perhaps because some causality goes from sickness to unemployment. But when you go through all the different approaches -time series, longitudinal, or cross-sectional; population data bases, random samples, or selected samples, or serendipitous findings, trom case studies through to sophisticated statistical analysis -the conclusion is overwhelming. This is true for physical and psychological health, for morbidity and mortality, and for the person and the rest of their families. Unemployment makes things worse.

There are at least three major gaps in the research. There is little on the effects on unemployed women (and also, because the work is mainly done overseas, little evidence about effects of Maori unemployment). Second the research on unemployment and crime is insufficient. The evidence there is suggests the process is much more complex than a simple theory that unemployment causes crimes against property. One study suggested, for instance, there may be little difference in the criminality of the young unemployed and the young employed in poor quality jobs.

And third there is the relation between unemployment and violence. The research here suffers from a focus on the most pathological behaviour such as murder. It tends to ignore behaviour inside the boundary of extreme misbehaviour. We might hypothesise, as I shall argue later , that unemployment causes increased violence within the family home, but this phenomenon is only indirectly measured. I would hazard the assertion that family violence is a much more serious problem than homicide, because it is more widespread, because it perpetuates itself through generations, and because it leads to homicide. Yet it seems much less a matter of concern either in the popular media or in public policy discussion.

So while there is considerable evidence of the effects of unemployment in industrial countries, the story is incomplete. Nevertheless there is one overwhelming conclusion. In terms of the distributions I showed earlier, in the case for many physical, psychological, and social diseases unemployment shifts the distribution to the left. If small changes in the centre of the distribution can lead to large changes in the disease tail, that means that it is possible that a smallish deterioration in the rate of unemployment, say an increase of a tenth as unemployment rise trom 10 to 11 percent, could increase the need for pathological interventions many more fold. Unemployment is socially expensive.

In drawing this conclusion I am not saying that the population distribution of all diseases we may be interested in are necessarily shifted right by unemployment or (as I discuss below) income deprivation. Some will be unaffected, and others will be shifted left. To be more precise employment increases the likelihood of some diseases (such as industrial accidents), and their are diseases of affluence (such as gout). However the evidence that the distribution of broad measures such as genera! morbidity and mortality are shifted left by increased unemployment – it increases the level of disease. And if someone experiences unemployment their likelihood of general morbidity and mortality goes up too.

There is some evidence about the mechanisms by which unemployment affects health. There is a deterioration in the individual feelings of self worth, plus a loss of normal social contact, which presumably leads to a psychological deterioration. We cannot rule out that this affects the individual’s physical as well as their mental health.

I should mention that while there is good evidence of the effects of unemployment on unemployed adolescents, the material is less comprehensive on the effects of unemployment on the unemployed’s children. There is better evidence on the effect on the unemployed’s spouse. She suffers from the same ill health as her husband, though to a lesser degree. I see no reason for not extrapolating this conclusion to their children, including to their social wellbeing. In some respects this conclusion, that unemployment of the main earner is detrimental to the wife and children is positive news, because it shows that the family remains a functioning social and emotional reality to many people. A breakdown in part of it affects the rest. More positively a well functioning family is beneficial to all its members.

There may well be a material deprivation effect too. It is a matter of record that people with lower incomes tend to have less food, inferior housing, less health care, and so on. There is not a lot of evidence how these reductions affect health except in the most extreme cases of, say, starvation. Lower income might even be beneficial if it reduces overeating or excessive consumption of licit drugs.

The evidence in this latter case is fascinatingly equivocal. Various overseas studies show that the unemployed are more likely to want to use licit and illicit drugs but they may have less financial means to acquire them, so some studies suggest there is an increase in their use. in others there is a reduction. Poverty studies in New Zealand suggest the poor give up drinking, but stick to smoking, although apparently they have suffered so severely in the last year they are giving up smoking too.

The research evidence on the poor is much jess abundant than evidence on the unemployed. That which is available is suggests that all in all the poor are worse off physically, psychologically, and socially as a result of their loss of income.[4] This conclusion may perhaps be obvious to an outsider so let me cxplain that I am not just saying that income deprivation affects material consumption. It also seems likely that there is a reduction in overall welfare above the reduction in consumption of goods and services. For most people poverty is not a blessing, although it is not unknown for the affluent to argue this as they cut the poor’s income.

I have been cautious in stating this because it is easy to make flamboyant statements, but a scientist in honesty must say we simply do not have the evidence. Nevertheless if I had to make an assessment on the basis of that research evidence we have, plus anecdote, plus assuming the parallel mechanisms of demoralisation which apply tor unemployment apply for the poor, I conclude that income deprivation causes mental and physical ill health. The exact outcomes are less clear. For instance we know that the unemployed are likely to suffer markedly higher rate of suicide and parasuicide. We do not have nearly as precise knowledge of the effects of poverty.

If I am right, and the main mechanism is via demoralisation from not being able to participate in and belong to their community, then the worse effects from poverty will arise when there is an increase in income inequality. In a society in which income cuts were shared proportionally, or that there rich were seem to be taking a more than proportional share, there might well be a recognition that the reductions were inevitable, and the pain was being shared fairly about. In such circumstances, we might well expect less psychological distress among the poor, perhaps even some psychological uplift from feeling a part of a community struggling together to face a common problem. The poor’s health might suffer from somereduction in their access to health giving commodities, but the impression r get from the research material is that would not be as damaging as the psychological demoralisation which widening income inequality generates.

And there has been widening income inequality in recent years. The Douglas tax cuts of 1988 which favoured the rich, had to paid tor by the across-the-board GST hike in 1989. The savage Richardson-Shipley benefit cuts of 1991 had no comparable measures impacting on the rich, and the user-pay charges on those of modest incomes merely added to the feelings of injustice. Moreover, unemployment has continued to rise. While becoming unemployed makes you poorer, especially after the recent benefit cuts, it is also true that the poor are more likely to become unemployed and stay unemployed. So the government distributional measures which have been promoting inequality have been compounded by the deteriorating labour market.

We need not be surprised that recent reports such as Neither Freedom or Choice from the People’s Select Committee, and Windows on Poverty from the Council of Christian Services, describe increasing distress among the poor. My guess is that if we were to look systematically we would find a rising incidence of morbidity and even mortality, which we might attribute to the rising poverty and unemployment. Some people may want to attribute the apparent rises in public violence, such as the murder rate, to these factors too. I want to be a little more cautious, for this evidence from the tail. Nevertheless there are anecdotal reports of greater pressure on women’s refuges arising out of domestic violence, so it would not seem outrageous to hypothesis that economic conditions are causing a rise in the tide of violence (and perhaps also offenses against property).

What has employment and income housing deprivation to do with the Children’s, Young Persons and their Families Act? The point is that it is dealing with the disease tail, and not considering the whole of the distribution. It is a pathological, not an holistic, approach to the issue. In some ways it is not even an ambulance at the bottom of the cliff. Perhaps it is only a bandaid.

Now bandaids are needed, especially in emergencies, which is what the Act is about. But as you stand there beneath the cliff, wondering who to bandaid next, you might give a thought to what is happening at the top, as the bulldozers of unemployment and income deprivation remorselessly push more over the edge. And you may wonder to what extent we should be more concerned with the forces at the top rather than the crashes at the bottom.

That would appear to be concern of the Minister of Social Welfare in a speech given to Massey University a week ago. I have only seen the press reports rather. than a whole text, which project an unusually high degree of confusion – even for a Minister of the Crown. Perhaps it is the Minister, perhaps it is the journalist, I cannot tell.

That the speech reports the minister as saying is that ‘the Welfare State itself through its mechanisms produces young illiterates, juvenile delinquents, alcoholic substance abuses, drug addicts and reject people at an accelerating speed.’ The report offers no evidence for this. It goes on ‘the fundamental problem is that we’ – I presume she means the government – ‘are in our own way creating a society where many individual people no longer feel any cohesive purpose, or responsibility to themselves or others.’I am sure many people would agree with the statement that the government is creating a society in which there is social alienation.

However having identified what she believes to be the causes, the Minister goes on to argues that society had become increasingly artificial and artificial society could not produce anything but alienation, indifference, and destructive. Unfortunately I cannot tell you what the Minister meant by ‘artificial’ although the next bit may help for she goes on: ‘More and more is solved through institutions and increasingly less through individual initiative and effort’. I am unclear as to which institutions the Minister has in mind, because the speech lists as institutions the family, church, law, and education. Can she be saying they appear to generate a so-called artificial society. The Minister appears to be saying that we should not solve we have been wrong to attempt to deal with social problems via such institutions, but what we should go back to individualism.

But then there is a problem in her logic. How does individual initiative and effort outside social institutions generate the feelings of cohesive purpose and responsibility to the individuals and others the Minister was concerned about. I would have thought that it was a society without institutions (without institutions) which relied only on individual initiative and effort which generated alienation, indifference, and destructiveness, not a society which ignored social initiative.

Let me say that in all this confused and inconsistent ramblings, there is – perhaps lost – a certain truth. We should look outside the immediate social problem and see it in a holistic context. Sadly the speech fails to contribute no more than that. The Minster’s solution seems to me to be especially inept. If we rip out any fences we have at the top of the cliff, and punish those who fall, then people will be afraid to go near the edge. Those that do, the Minister seems to say, do so out of foolishness. She ignores the great bulldozers of unemployment and income deprivation, which are driving individuals and their families over.

Perhaps she has to because it is the policies of her government which have added to the thrust of the bulldozers. Not only have they increased unemployment but the budget forecasts expect it to continue to rise for at least another three years. The main downward pressure on unemployment today, is that people are giving up looking, judging it to be a hopeless task.

That surely is a major source of alienation, indifference, and destructiveness. And the budget offers little hope t-or those suffering income deprivation. It contains no improvements in the real level of welfare benefits already cut below tolerable levels, reductions in public spending, which will probably affect most the poor, and few employment opportunities.

It is depressing for those working at the bottom of the cliff that there is so little understanding as to why they have to be there, and why the demands for their efforts are increasing, while the resources available to them are reduced. At some stage you may want to consider whether more ought to be done at the top. To be practical, in some particular instances an effective strategy will be for the integration between a holistic and pathological approach. But we should avoid the tail of disease wagging the dog of the distribution.

1. Ministerial Review Team (1992) Review of the Children, Young Persons and their Families Act, 1989: Report of the Ministerial Review Team to the Minister of Social Welfare, Department of Social Welfare, Wellington.
2. Social Welfare Research monograph No 2, Department of Social Welfare, Wellington.
3. I. Shirley, B. Easton, C. Briar, & S. Chatterjee (1990) Unemployment in New Zealand, (Dunmore Press); B.H. Easton, The Epidemiology of Unemployment, The Dean’s Lecture, Wellington Medical School, July 11, 1990.
4. B.H. Easton. (1986) Wages and the Poor (Allen & Unwin) p.12-20.