EMU, Macroeconomics and Children [antikvár]

Executive Summary The aim of this paper is to provide a framework for answering the question: How can EMU be expected to affect the children of Europe? Macroeconomics in OECD countries has tended to become a remote and abstract subject, discussed in aggregate terms which seem far removed from the everyday experience of families. Much of this paper is concerned with making the link between macroeconomic analysis and family welfare, a link which is important for all age groups, but is particularly so for children. Childhood is a vulnerable stage of the life-cycle, and children may be especially sensitive to macroeconomic shocks. The public debate about EMU has been largely divorced from the concerns of families and children. Anxiety about employment is one connecting link, but, this apart, there has been little consideration of what EMU means for family welfare. Discussion in the UK has been dominated by business and monetary issues, as is shown in the paper by a review of official publications and the press. The impact of EMU on consumers has been more to the fore in the publications of the European Union than in those of the British government, but there appears to be little feedback to the macroeconomic analysis. Turning to the macroeconomics of EMU, we find that the policy choices of the European Central Bank are often modelled in terms of the variability of output and inflation, but, like the British government's "five tests", these are better seen as "intermediate" goals. Minimizing the variance of inflation or output contributes to the welfare of citizens, but is not a direct measure of that welfare. The paper goes on to examine the relation with employment, with wage levels, with take-home pay, with interest rates at the household level, with consumer prices, and with public services. Several proposals emerge from the analysis for improvements in our monitoring of economic performance to make them more family orientated. The first is for a child-focused unemployment rate. The individual unemployment rate is not the indicator most relevant to children; what affects them is whether they are living in a household without an income from work. Governments should publish a statistic which shows the number of children adversely affected by unemployment. The paper compares for the UK the proportion of children living in households where there is no one in paid full-time employment, with the conventional unemployment rate. The two series moved upward together in the early 1980s, but did not return to the same level. Recorded unemployment in 1990 in the UK was down to its 1979 level, but the proportion of children living in households without paid work was much higher.