69993 Labor Markets and Youth Social Protection & Labor Policy Note June 2012 | Number 12 Highlight Middle Childhood Economic crises Protecting and Promoting Human can delay or prevent the achievement Development in Times of Economic Shocks1 of developmental milestones during Kevin Hempel, Alice Wuermli, Mattias Lundberg2 middle childhood, with potentially serious long- M term consequences. A iddle childhood (approximately 6-12 years old) is a crucial time for develop- better understanding of ing cognitive and socioemotional competencies, and economic crises can affect children’s development with long-lasting consequences for adolescence human developmental and adulthood. This note provides an overview of how economic shocks can affect chil- processes provides dren and their environment, and how policies and programs can protect and promote useful entry points for the child’s development in the face of adversity. Negative impact of crises on learning and other outcomes can be prevented and mitigated through targeted investments at the policies and programs. family and school level. Context Economic crises can have serious implications for human development. Financial crises, at both the global and the national level, are ubiquitous. This raises concern about the human impacts of crises, especially among more vulnerable populations in develop- ing countries. This is particularly true during childhood and youth, when the brain is developing rapidly, and when socioemotional and behavioral development are at their peak. Given the cumulative nature of human development, shortfalls or setbacks at any stage of the life course—from the antenatal environment through adolescence—are often difficult to reverse later in life and may have severe consequences for individual develop- ment as well as for the growth and development of successful communities. Thus, it is essential to protect and promote human development in the face of adversity. Three interrelated concepts provide the foundation for understanding the potential impacts of shocks on children and youth. ■ Timing: Human development is characterized by critical periods of life during which certain investments must be made to facilitate the achievement of specific milestones in development, or stage salient developmental tasks. These age-related expectations for the mastery of particular tasks provide benchmarks for the abilities that an individual should ideally master by different ages, and that are correlated 1 This note is part of a three note series that summarizes findings from Lundberg and Wuermli (eds) 2012. Children and Youth in Crisis: Protecting and Promoting Human Development in Times of Economic Shocks. Washington DC: The World Bank. 2 The authors wish to thank Juliana Arbelaez, Davíd Robalino, and Michael Weber for their invaluable col- laboration and comments. 1 Policy Note: Labor Markets and Youth June 2012 | Number 12 with successful development and transition to subsequent sibilities. An increasing capacity for abstract reasoning stages in life. Economic crises can disrupt a young person’s and acquiring and using new knowledge allows them to “normal� development by preventing or delaying the mas- solve more complex problems. At the same time, children tery of these developmental tasks at specific stages, which— at this age also start engaging in more planful behaviors, if uncorrected—can have potential long term consequences. setting goals and working towards them. ■ Context: Development in childhood and youth is influ- ■ The development of interpersonal negotiation and social enced by diverse contexts or settings (family, peers, schools, problem-solving skills: As they grow up, children start to communities, sociocultural belief systems, policy regimes, engage in settings outside the family – in particular the and the economy). The relative importance of these settings school. These increasing social interactions with teachers, changes during the lifecourse. Interactions among these other children, and community members, in turn, influ- settings determine both the transmission of shocks such as ence their social competencies. In this process, they must a financial crisis to the young person’s immediate environ- learn to take into account the perspective of others, inter- ment and the impact of the shock on her development. pret social behaviors, and develop a sense of self-awareness. As development is partly a function of a person’s repeated interactions with her immediate environment (the proximal The mastery of these developmental tasks during middle processes of human development), shocks can disrupt the childhood, in turn, is associated with school achievement and contexts in which these processes occur, and hinder a young other outcomes later in life, including improved employment person’s ability to develop successfully. and a lower propensity to suffer mental health problems and engage in risky behaviors. ■ Transmission mechanisms: There are numerous pathways through which a crisis can affect the well-being and de- Economic crises can impair healthy development during velopment of a young person. Crises may be experienced middle childhood. Because family and school are the two directly at the individual level (through e.g. a change in main settings of interaction for children at this age, they also aspirations and identity), or indirectly through the family, become the most influential pathways through which an school, or other settings (through e.g. increased parental economic crisis can affect their cognitive and socioemotional stress, parental job loss, a reduction in publicly-provided development. In particular, crises can lead to: services). The developing person will experience crises Parental stress and decline in family functioning. As an increase through the loss in income, but also through other chan- in economic hardship makes it more difficult to meet the fam- nels, such as psychological distress. The relevance of each ily’s basic needs, it can increase parents’ psychological pres- particular transmission mechanism varies depending sures. Parents who experience economic pressure are more at on the life stage of the person as well as on the context. risk of emotional and behavioral problems including depres- Different settings may provide protective factors that pre- sion, anxiety, and substance abuse, which, in turn can lead to vent, mitigate or attenuate negative impacts; these factors or exacerbate marital conflict.4 This can affect the quality of can be a source of resilience, facilitating positive adaptive parenting, reflected for example in showing less affection and behavior on the part of the developing person. involvement with their children and being harsher and more inconsistent in disciplining them. As a result of deteriorating Effects of economic crises on middle parent-child interactions at this stage in life, children’s cogni- childhood tive and socioemotional development may be constrained. Middle childhood is a crucial stage in a person’s devel- Lower investments in learning and stimulation within the home. opment. Between roughly 6 and 12 years of age, children In response to a drop in household income, a family might ex- develop many of the basic skills and competencies required to perience difficulties covering education related expenditures. succcessfully engage in school, work, and personal relation- While the evidence from household level shocks seems to ships. Building on the physical, cognitive, and socioemotional support the notion that children’s schooling suffers, evidence capacities attained during early childhood, two developmental from aggregate economic shocks indicates that school enroll- tasks are particularly important during this phase in life:3 ment may actually increase in response to tight labor markets, especially in middle- and high income countries.5 In addition ■ Learning and reasoning: Children’s cognitive abilities to putting schooling at risk, learning and stimulation within expand in parallel with their evolving roles and respon- 3 Eccles, J. S. 1999. “The Development of Children Ages 6 to 14.� Future of Children: When School Is Out 9 (2): 30–44.; Collins, W. A., S. Madsen, and A. Susman- Stillman. 2008. “Parenting during Middle Childhood.� In Children and Parenting. Vol. 1 of Handbook of Parenting, ed. M. Bornstein, 73–102. Mahwah, NJ: Law- rence Erlbaum Associates. 4 Conger, R. D., and G. H. Elder. 1994. Families in Troubled times: Adapting to Change in Rural America. Hillsdale, NJ: Aldine.; Gershoff, E. et al. 2007. “Income Is Not Enough: Incorporating Material Hardship into Models of Income Associations with Parenting and Child Development.� Child Development 78 (1): 70–95. 5 Ferreira, F. H. G., and N. Schady. 2009. “Aggregate Economic Shocks, Child Schooling and Child Health.� World Bank Research Observer 24 (2): 147–81. The household response to an economic shock is expected to depend on the relative importance of an income effect (reduction in household resources due to fall- ing wages or unexpected job loss) vs. a substitution effect (lower opportunity costs of schooling, given, for example, tight labor markets). If the income effect outweighs the substitution effect, we expect a reduction in human capital investments, such as schooling. Conversely, if the substitution effect prevails, schooling may actually increase. 2 Social Protection & Labor | Human Development Network | The World Bank the home may also suffer, both because of fewer resources middle childhood can have lasting consequences.8 Poor and because of the potential deterioration in family dynamics socioemotional skills (difficulty regulating emotion, for mentioned above. example) during middle childhood are associated with lower academic achievement, mental health problems Reduced quality of teaching and the learning environment (e.g. depression and anxiety) and risky behaviors (e.g. in schools. Crises may not only affect family dynamics and substance abuse, delinquency) well into adolescence. investments, but also public investments in education. Lower Moreover, given the predictive power of cognitive, public expenditure can adversely affect the quality as well socioemotional, and behavioral skills or competencies as quantity of teaching and other resources available in the for labor market outcomes, the failure to develop those school setting. For example, teachers may be laid off and sala- aptitudes during middle childhood is likely to negatively ries cut, with possible implications on class size, teacher work affect future employment and income. load, and teacher absenteeism.6 The increase in family stress experienced by children at home and resulting behavioral problems in the classroom may further compound quality Policy implications instruction and ultimately children’s ability to acquire the necessary literacy, numeracy, and problem solving skills. Given the relative importance of family and school for child development, programs and policies can target these While these transmission mechanisms are fairly universal, settings to counteract the negative effects of crises. The the extent to which they apply in a specific crisis situation are different transmission mechanisms by which a crisis affects culture and context-specific, and may vary significantly across children provide a variety of entry points for intervention. In different groups in society. For example, if girls are more likely particular, given relatively high rates of primary school enroll- to stay home to support household chores, they may be more ment including in low-income countries, the school setting exposed to parental stress, harsh parenting, or domestic abuse, provides an opportunity to reach large numbers of children putting their development relatively more at risk. of all socio-economic backgrounds and provide “corrective� measures for the potential lack of cognitive and socioemo- Insults to the child’s environment can have short- and long- tional stimulation in other settings. term consequences. As a result of the possible constraints in the family and school setting, a crisis can jeopardize a variety Provide income support to smooth consumption and sustain of human development outcomes during middle childhood family investments in children’s development. Public works and leave lasting scars for adolescence and beyond. These and conditional cash transfers can be successful safety net inter- include: ventions in developing countries. Primarily intended to ensure a minimum level of household income during a crisis, existing ■ Immediate effects: In the short term, as a result of lower evidence suggests that they also have the potential to promote quality stimulation and learning opportunities in fam- school enrollment and achievement.9 As evidence is still limited, ily and school, a crisis can lead to delays in cognitive attention is warranted on how safety net programs can be development, with implications for building up literacy, designed best to not only provide temporary income support, numeracy, general knowledge, and problem solving skills. but also positively influence family relations and maximize child In addition, lower income during middle childhood is development outcomes in different contexts. associated with increased socioemotional and behavioral problems. Children of parents who engage in harsh par- Reduce the cost to the family of sending children to school. enting tend to have more difficulties with selfregulation Since family investments may be at risk, reducing the burden and are more likely to suffer from mental health prob- of schooling for economically strained families can help fa- lems. Combined, the reduction of family investments in cilitate continued school attendance. For example, Indonesia’s education, stress experienced in the home, and the child’s scholarship program implemented in response to the 1998 behavioral difficulties may lead to poorer school perfor- regional economic crisis was found to reduce dropouts at the mance and premature school leaving. 7 primary and lower-secondary school levels.10 Similarly, school feeding programs can provide incentives for children’s school ■ Effects later in life: The inability to fully develop one’s attendance as they lessen the family’s burden of providing cognitive and socioemotional competencies during food for the child. 6 Knowles, J. C., E. M. Pernia, and M. Racelis. 1999. “Social Consequences of the Financial Crisis in Asia.� Economic Staff Paper 60, Asian Development Bank, Manila 7 Alexander, K., D. Entwisle, and C. Horsey. 1997. “From First Grade Forward: Early Foundations of High School Dropout.� Sociology of Education 70 (2): 87–107; Dornbusch, S. et al. 1987. “The Relation of Parenting Style to Adolescent School Performance.� Child Development 58 (5): 1244–57. 8 Heckman, J., J. Stixrud, and S. Urzua. 2006. “The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behaviors.� Journal of Labor Economics 24 (3): 411–82., Teo, A. et al. 1996. “A Prospective Longitudinal Study of Psychosocial Predictors of Achievement.� Journal of School Psychology 34 (3): 285–306. 9 See for example Morris, P. et al. 2001. How Welfare and Work Policies Affect Children: A Synthesis of Research. New York: MDRC; Fiszbein, A., and N. Schady. 2009. Conditional Cash Transfers: Reducing Present and Future Poverty. Washington, DC: World Bank 10 Cameron, L. 2009. “Can a Public Scholarship Program Successfully Reduce School Drop-Outs in a Time of Economic Crisis? Evidence from Indonesia.� Eco- nomics of Education Review 28: 308–17. Sparrow, R. 2007. “Protecting Education for the Poor in Times of Crisis: An Evaluation of a Scholarship Programme in Indonesia.� Oxford Bulletin of Economics and Statistics 69 (1): 99–122. 3 Policy Note: Labor Markets and Youth June 2012 | Number 12 Maintain public spending on education and ensure timely payment of teacher salaries. Given the amount of time that Case Study: Strengthening cognitive and children spend in schools, it is crucial to protect this learn- socioemotional competencies through extracurricular ing environment to mitigate the negative impact of eco- activities12 nomic crises on educational outcomes. Protecting education expenditures may require intergovernmental transfers, as the Extracurricular activities for children can be offered in a budgetary responsibility for schools and teachers often lie variety of settings before- or after school, on weekends, with the subnational authorities. and during holidays. In Colombia, for example, Mercy Corps offers an after-school program in vulnerable Strengthen school- or community based after-school pro- neighborhoods to provide a supportive environment grams to counteract stressful home environments (see case for 5,000 children ages 7 to 17. Children play games, study). Reviews have shown that after-school programs can receive homework assistance, and engage in other contribute to better learning outcomes, higher self-esteem, stimulating activities. Since students attend school and a reduction in risky behaviors by enhancing positive so- either in the morning or the afternoon, the program is cial skills.11 These settings therefore represent an opportunity implemented throughout the day, so they can attend to counteract negative influences in the family by providing when they are not in class. An independent study of the an alternative environment to build positive relationships program suggests that participating students improved and develop not only cognitive but also socioemotional and their attendance rates, academic performance, and behavioral competencies. passing rates in school. The experience also indicates that parents of participating children may display more positive attitudes toward education and more reluctance to engage them in child labor. While the evidence-base on these types of programs stems mostly from OECD countries, promising results from some evaluations in developing countries suggests that similar interventions can also be successful in more resource-constrained environments. 11 Bowles, A., and B. Brand. 2009. Learning around the Clock: Benefits of Expanded Learning Opportunities for Older Youth. Washington, DC: American Youth Policy Forum; Bandy, T., and K. Moore. 2011. “What Works for Promoting and Enhancing Positive Social Skills: Lessons from Experimental Evaluations of Pro- grams and Interventions.� Fact Sheet. Washington, DC: ChildTrends; Durlak, J. et al. 2011. The Impact of Enhancing Students’ Social and Emotional Leaning: A Meta-Analysis of School-Based Universal Interventions. Child Development 81 (1): 405–32. 12 Mercy Corps Website; Cunningham, W., L. Cohan, S. Naudeau, and L. McGinnis. 2008. Supporting Youth at Risk: A Policy Toolkit for Middle-Income Countries. Washington, DC: World Bank. The findings, interpretations, and conclusions expressed herein are those of the author(s), and do not necessarily reflect the views of the International Bank for Reconstruction and Development/The World Bank and its affiliated organizations, or those of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. For more 4 information, please visit www.worldbank.org/sp.