UNICEF - Unequal Chances - Children and economic inequality

Unequal Chances Children and economic inequality Innocenti Report Card 20Contents 1: Introduction 4 2: A league table of child well‑being 6 Changes in the rankings 9 Types of inequality explored in this report 9

Explainer: Different types of inequalities 10 3: Economic inequalities 12

Monetary inequalities 12 Measures of socioeconomic status 15 4: Economic inequalities in physical health 16 Key indicators of physical health 16 Child mortality, ages 5 to 14 17 Overweight 18 National economic inequalities and average child physical health 19 Economic inequalities within countries and differences in children’s physical health 21 Child mortality 21 Child overweight 21 5: Economic inequalities and children’s mental well‑being 24 Key indicators of mental well‑being 24 Adolescent suicide 24 Life satisfaction 25 National economic inequalities and average child mental well‑being 26 Economic inequalities within countries and differences in children’s mental well‑being 27 Suicide 27 Life satisfaction 27 Other aspects of mental well‑being 28 6: Economic inequalities and children’s skills 30 Key indicators of skills 30 Social skills 30 Academic skills 31 National economic inequalities and children’s average skills 32 Economic inequalities within countries and differences in children’s skills 35 Academic skills 35 Social skills 357: How do economic inequalities affect child well‑being? 40 Economic inequalities in the world around the child 42 The household 42 The neighbourhood 45 Schools 46 Economic inequalities in the world of the child 49 Children’s relationships 50 Activities and behaviours 51 8: Children’s views on inequalities 55 Methodology 55 Which children are most affected by inequalities and why? 56 How do inequalities shape and impact children’s lives? 57 Who are the actors responsible for inequalities, and what could they do to improve children’s well‑being? 59 9: Key messages 62 Summary of key points 62 Child well‑being 62 Economic inequalities 62 Do countries with higher economic equality have better child well‑being? 62

Who are the actors responsible for inequalities, and what could they do to improve children’s well‑being? 59 9: Key messages 62 Summary of key points 62 Child well‑being 62 Economic inequalities 62 Do countries with higher economic equality have better child well‑being? 62 Are economic inequalities within countries linked to variations in child well‑being? 63 How do economic inequalities affect child well‑being? 63 Children’s views on inequalities 64 What can countries do to reduce the impact of inequalities on child well‑being? 64 Reduce monetary inequalities experienced by children 64 Promote equity of resources across households, schools and neighbourhoods 65 A wider range of policies for equity 66 Create solutions jointly with children and others 66 Better data and monitoring 67 Endonotes 68 Technical appendix 71Introduction 4

Unequal chances: Children and economic inequality, Innocenti Report Card 20 1: Introduction The wealthiest countries in the world continue to get richer.2 But despite this increasing prosperity, large inequalities persist within these countries. In fact, there is an increasing accumulation of wealth among people with the highest incomes.3 Countries are becoming more prosperous but are not succeeding in sharing this benefit more equitably.

Why do these persistent inequalities matter? Some may say that the important thing is that living standards are improving for everyone – that even the poorest people in rich countries have a far better life now than they did in living memory. For example, in Europe, extreme poverty, still relatively common in the 1950s, is now a rare occurrence.4 But that is only part of the story. Inequalities still matter profoundly, not only for individuals but for societies. Countries with higher levels of inequality have lower levels of trust.5 And these same countries tend to have lower intergenerational mobility, meaning that inequalities are reproduced and transmitted from one generation to another.6 These issues have particular importance for children. As this report shows, children growing up in poorer economic circumstances have much worse physical health and academic outcomes than more advantaged children. That has consequences for both their childhood and their adulthood. Of course,

transmitted from one generation to another.6 These issues have particular importance for children. As this report shows, children growing up in poorer economic circumstances have much worse physical health and academic outcomes than more advantaged children. That has consequences for both their childhood and their adulthood. Of course, there are famous exceptions – people born into disadvantage who defied the odds. But these individual atypical cases must not be allowed to obscure the reality that, on average, poorer children have far worse life chances. And this inequality does not reflect ‘merit’. Instead, it poses fundamental questions of social justice, reflecting societies in which, too often, the family circumstances and neighbourhood in which children are born have a major influence on their childhoods and futures. An imbalance between rich and poor is the oldest and most fatal ailment of all republics.1 – Plutarch, Greek philosopher (c. AD 50–120)Introduction 5

Unequal chances: Children and economic inequality, Innocenti Report Card 20

This report, the twentieth in UNICEF Innocenti’s Report Card series, explores the potential impact of inequalities on children’s lives in 44 countries that are classified as ‘high income’ and/or are members of the Organisation for Economic Co-operation and Development (OECD). It: • updates a league table of six key indicators of child well‑being (first published in 2020 in Innocenti Report Card 16)7 that track how these countries are doing for children. • provides an overview of indicators and trends on economic inequalities. • evaluates whether countries with greater economic equalities have better child well-being. • examines how economic inequalities within each country are linked to variations in child well-being. • describes the pathways through which economic inequalities may impact child well-being. • identifies potential policy solutions to reduce the negative impact of economic inequalities on children’s lives in the present and the future. This report presents a clear picture of how damaging economic inequalities can be for child well-being and presents a challenge to all countries to ensure that they do better for all children.A league table of child well-being 6

• identifies potential policy solutions to reduce the negative impact of economic inequalities on children’s lives in the present and the future.

This report presents a clear picture of how damaging economic inequalities can be for child well-being and presents a challenge to all countries to ensure that they do better for all children.A league table of child well-being 6

Unequal chances: Children and economic inequality, Innocenti Report Card 20 2: A league table of child well‑being The Report Card series makes use of the best available comparable data, based on six criteria – quality, relevance, coverage, recency, comparability and variability.

The concept of child ‘well‑being’ has many different definitions. In this report, it means a set of dimensions – physical health, mental well‑being and skills – that are seen as fundamental aspects of children flourishing in the present and the future. The league table for this report uses six key indicators based on the above criteria and conceptualization, which were introduced in Report Card 16, in order to present a balanced picture of child well-being across these three dimensions. Box 1 provides a brief overview of these indicators. Measuring child well‑being The league table presents a summary of how children are doing in terms of physical health, mental well-being and skills, utilizing two indicators for each of these three dimensions. BOX 1 Dimension Components Indicators Source Physical health Child mortality Child mortality rate, ages 5 to 14 UN IGME project, 2024 Overweight % of children and young people overweight, ages 5 to 19 NCD‑RisC data, WHO/Lancet 2022 Mental well‑being Life satisfaction % of children with high life satisfaction at 15 OECD, PISA 2022 Adolescent suicide Suicide rate, ages 15 to 19 WHO Mortality Database, 2023 or latest available data Skills Academic proficiency % proficient in reading and mathematics at 15 OECD, PISA 2022 Social skills % who make friends easily at school at 15 OECD, PISA 2022

ages 15 to 19 WHO Mortality Database, 2023 or latest available data Skills Academic proficiency % proficient in reading and mathematics at 15 OECD, PISA 2022 Social skills % who make friends easily at school at 15 OECD, PISA 2022

Note: NCD-RisC – NCD Risk Factor Collaboration; PISA – Programme for International Student Assessment; UN IGME – United Nations Inter-agency Group for Child Mortality Estimation; WHO – World Health Organization.A league table of child well-being 7

Unequal chances: Children and economic inequality, Innocenti Report Card 20

Table 1 presents the league table ranking countries equally weighted on the six indicators (see the Technical appendix for the method of ranking). • The first column shows the overall ranking, from highest to lowest. • Columns 3 to 5 show the ranking for the above three dimensions. • The top third of countries overall and in each dimension are shown in the lightest colour, and the bottom third are in the darkest. Countries are only given an overall ranking if data were available for all six of the above indicators. The countries that do not have full data are provided with rankings for the dimensions where data for both indicators related to that dimension were available.

It can be seen that: • The three countries with top ranking overall – the Kingdom of the Netherlands, Denmark and France – rank in the top third on all three dimensions of child well-being. • On the other hand, four of the bottom five ranked countries – Chile, Türkiye, Uruguay and and Colombia – rank in the bottom third on the three dimensions. • Some countries – Greece, Iceland and Slovenia – are in different thirds of the rankings for all three dimensions.

The rankings therefore demonstrate different areas of strength and weakness across countries.A league table of child well-being 8

Unequal chances: Children and economic inequality, Innocenti Report Card 20

Table 1: A league table of child well‑being Rank Country Physical health Mental well‑being Skills 1 Netherlands 5 1 11 2 Denmark 1 4 7 3 France 2 12 9 4 Portugal 10 3 21 5 Switzerland 8 15 6 6 Ireland 11 24 1 7 Lithuania 13 13 13 8 Spain 22 5 17 9 Romania 24 2 22 10 Hungary 29 6 14 11 Sweden 14 16 15 12 Italy 17 10 25 13 Slovenia 16 29 2 14 Finland 23 17 16 15 Croatia 34 7 4 16 Austria 20 23 8 17 Japan 3 32 12 18 Latvia 12 9 29 19 Slovakia 25 11 26 20 Iceland 6 26 27 21 Czechia 4 25 31 22 Canada 27 22 20 23 Greece 26 8 33 24 United Kingdom 21 28 19 25 Germany 15 21 34 26 Malta 19 18 35 27 Republic of Korea 30 34 3 28 Bulgaria 32 14 32 29 Estonia 28 30 24 30 Poland 18 31 30 31 Costa Rica 37 20 39 32 New Zealand 33 37 23 33 Colombia 39 27 37 34 Uruguay 35 35 38 35 Mexico 41 19 40 36 Türkiye 36 36 36 37 Chile 40 33 41 Australia 31 n/a 18 Belgium 7 n/a 5 Norway 9 n/a 10 United States 38 n/a 28

Source: See Technical appendix for full details.

Note: Due to lack of availability of data, it was not possible to include three countries in the league table – Cyprus,

Israel and Luxembourg. These countries are included in other parts of the report where data were available. In addition,

appendix for full details.

Note: Due to lack of availability of data, it was not possible to include three countries in the league table – Cyprus,

Israel and Luxembourg. These countries are included in other parts of the report where data were available. In addition, it was not possible to fully rank the last four countries due to missing data on life satisfaction.A league table of child well-being 9

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Changes in the rankings The overall ranking is similar to that in Innocenti Report Card 19,8 as, since the publication of that report in 2025, more recent data were only available for two indicators – suicide rate and mortality rate. Nevertheless, as a result of this update, the ranking of some countries has changed. A summary of these changes is provided in the Technical appendix. Types of inequality explored in this report This report uses two main approaches to examine inequality: ‘between‑ country’ and ‘within‑country’ inequality. While each provides useful insights, the difference between them can be confusing. • Measures of between-country inequality are based on comparing averages in each country. This helps to understand how countries compare with each other. • These averages, however, paint only part of the picture. In two countries with similar averages, one may have a much greater range of inequality within it than the other. This variability is the within-country inequality. Figure 1 illustrates these two types of inequality using children’s test scores in mathematics in the 2022 PISA study. It is important to understand both types of inequality:

1. Why do some countries do better, on average, than others?

2. Why, within the same country, do some children do better than others?A league table of child well-being 10

Unequal chances: Children and economic inequality, Innocenti Report Card 20

Explainer: Different types of inequalities Figure 1 shows the variations in mathematics test scores at age 15 in three Report Card countries that had the highest, median and lowest average test scores.

Unequal chances: Children and economic inequality, Innocenti Report Card 20

Explainer: Different types of inequalities Figure 1 shows the variations in mathematics test scores at age 15 in three Report Card countries that had the highest, median and lowest average test scores. • Country A had the highest average test score (mean = 536), Country B was the middle‑ranked country (mean = 474) and Country C had the lowest average score (mean = 383). This is between‑country inequality – on average, children in Country A did better in mathematics than children in Country B, who did better than children in Country C. • Nevertheless, the chart shows the within-country inequality between children. While children in Country C had the lowest test scores on average, 1 in 9 children (11 per cent) scored more than the average in Country B, and 1 in 40 (2.5 per cent) scored more than the average in Country A. Similarly, more than 1 in 4 children (26 per cent) in Country B scored more than the average in Country A.

Figure 1: Distribution of PISA mathematics test scores at 15 years old in three selected countries, 2022

Source: Authors’ analysis of PISA 2022 dataset. See Technical appendix for more details.A league table of child well-being 11

Unequal chances: Children and economic inequality, Innocenti Report Card 20

This report explores how economic factors may provide an explanation for both of the above types of inequality in child outcomes. Regarding the first question posed above, as to why some countries do better for children than others, there is substantial evidence that countries with higher levels of economic inequality fare worse on a number of measures of adult well-being. These more unequal countries tend, for example, to have lower levels of social and institutional trust, higher levels of incarceration and poorer adult mental health. Moreover, the ‘Great Gatsby Curve’ demonstrates that such inequalities tend to persist across

with higher levels of economic inequality fare worse on a number of measures of adult well-being. These more unequal countries tend, for example, to have lower levels of social and institutional trust, higher levels of incarceration and poorer adult mental health. Moreover, the ‘Great Gatsby Curve’ demonstrates that such inequalities tend to persist across generations. The presence of correlations between economic inequalities and societal well‑being does not automatically demonstrate that the first causes the second. In fact, the relationship between the two may be more complex. Rather than being a root cause, economic inequalities may be symptoms of underlying social and economic factors, often deeply rooted in the structures and attitudes in societies, that constitute the context for poorer well-being. The link between country-level inequalities and child well-being has been explored less often. This report provides an up-to-date picture of this link, using the six key indicators of child well-being from the league table presented in this section. Regarding the second question, the report summarizes the substantial evidence that there are economic inequalities within countries in children’s physical health, mental well-being and skills. It explores the pathways and mechanisms through which these inequalities occur. The evidence presented in this report is the outcome of a detailed analysis of these questions, and further information about this can be found in a working paper that accompanies the report.Economic inequalities 12

Unequal chances: Children and economic inequality, Innocenti Report Card 20 3: Economic inequalities Economic inequalities are present within any given society at various levels – between regions, neighbourhoods, schools, households and individuals.

Perhaps the most familiar types of economic inequalities are those between households and individuals measured in monetary terms. However, it is also possible to consider inequalities in terms of broader measures of socioeconomic status and in terms of material resources available either to the individual or household or within neighbourhoods or schools. These types of resource-based inequalities are discussed below and in Sections 4 to 7. Monetary inequalities Monetary inequalities can be measured in terms of both income and wealth, and there are various ways of summarising these inequalities. The

available either to the individual or household or within neighbourhoods or schools. These types of resource-based inequalities are discussed below and in Sections 4 to 7. Monetary inequalities Monetary inequalities can be measured in terms of both income and wealth, and there are various ways of summarising these inequalities. The analysis presented in this and the following sub-section focuses on two key measures:8 1. income inequality, measured as the ratio of income of people at 20 per cent of the income distribution and people at 80 per cent of the income distribution (the P80–P20 ratio) 2. the rate of child poverty, based on a threshold of 60 per cent of the median income – poverty can be considered as a measure of ‘bottom‑end’ inequality These two measures have been selected to illustrate the key aspects of the relationship between economic inequalities and child well-being outcomes. The results from the analysis of wealth inequalities are also reported. A working paper accompanying this report provides more details of the full analysis conducted with a wider range of economic inequality indicators.9Economic inequalities 13

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Figure 2 shows the most recent picture for both of these indicators in Report Card countries. Looking first at income inequality: • Even in the most equal countries – Slovakia, Iceland, Czechia, Slovenia and Belgium – people in the top fifth of the income distribution have approximately 3.5 times as much income as people in the bottom fifth. • In the four most unequal countries – Costa Rica, Chile, the United States of America and Türkiye – people in the top fifth of the income distribution have at least eight times the income of people in the bottom fifth.

In terms of child poverty: • Child poverty rates range from around 10 per cent in Denmark to around 37 per cent in Colombia and Costa Rica. • Innocenti Report Card 18 showed that there have been only modest overall reductions in child poverty in this group of countries in recent decades, while child poverty rates have increased substantially in some of the world’s wealthiest countries.10

37 per cent in Colombia and Costa Rica. • Innocenti Report Card 18 showed that there have been only modest overall reductions in child poverty in this group of countries in recent decades, while child poverty rates have increased substantially in some of the world’s wealthiest countries.10

A comparison of child poverty rates with the overall picture of income inequality shows that, in general, countries with higher levels of income inequality have higher rates of child poverty. However, there is some variation in this connection across countries. For example, France and Luxembourg are in the top half of the ranking on income inequality (they are more equal than the average) but in the bottom half of the ranking for child poverty (with relatively high rates), but the opposite is true for Japan, Latvia and the Republic of Korea. These differences may be partly to do with different shapes of income distribution. They are also likely to be partly due to benefits and taxation policies, as well as coordination with employment policies and services for children and families.11 This variation in the relationship between income inequality and child poverty also points to potential policy interventions to reduce the impact of economic inequalities on children’s lives. These will be discussed in the final section of the report.Economic inequalities 14

Unequal chances: Children and economic inequality, Innocenti Report Card 20

Figure 2: Income inequality (P80–P20 ratio), 2023 or most recent available data; child poverty rate, 2024 or most recent available data Source: See Technical appendix for details.Economic inequalities 15

Unequal chances: Children and economic inequality, Innocenti Report Card 20

This report examines the overall picture for children as a group. It is important to acknowledge that different subgroups of children may be affected in different ways by economic inequalities. Unfortunately, data scarcity and resource limitations do not allow for exploration of these types of intersectional issues in this report, but they remain an important consideration for a more in-depth understanding of the many ways in which economic inequalities affect children’s lives. Measures of socioeconomic status While the above monetary indicators are a valuable way of exploring

scarcity and resource limitations do not allow for exploration of these types of intersectional issues in this report, but they remain an important consideration for a more in-depth understanding of the many ways in which economic inequalities affect children’s lives. Measures of socioeconomic status While the above monetary indicators are a valuable way of exploring economic inequalities, they are not the only way of doing so, and sometimes it is not practically possible to use them. For example, because children may not know about, and be able to accurately report on, household income, surveys that gather data directly from children often include other measures of family socioeconomic status, such as: • the PISA index of economic, social and cultural status, developed by the OECD, which is based on the responses of children aged 15 to questions about parental education, parental employment and home possessions;12 • the Health Behaviour in School-aged Children (HBSC) study, which uses a ‘family affluence’ scale based on a number of material aspects of the home environment, such as the number of vehicles in the household and the number of bathrooms in the home.13 Both these measures are used in this report, particularly when data based on income were not available.Economic inequalities in physical health  16

Unequal chances: Children and economic inequality, Innocenti Report Card 20 4: Economic inequalities in physical health This is the first of three sections looking at economic inequalities in the three dimensions of the league table presented in Section 2. Each of these sections follows the same structure. First, the key league table indicators are presented. Then the results of the analysis are shown for betweencountry and within-country inequalities (see Section 2 for further discussion).

Therefore, after presenting the key indicators, this section explores the following questions:

1. Do countries with greater or less economic inequalities have better child physical health, on average?

2. Within countries, are economic inequalities in families and communities linked to inequalities in children’s physical health?

Key indicators of physical health The two indicators of physical health in the league table are presented below. The rate of mortality between the ages of 5 and 14 was selected because

physical health, on average?

2. Within countries, are economic inequalities in families and communities linked to inequalities in children’s physical health?

Key indicators of physical health The two indicators of physical health in the league table are presented below. The rate of mortality between the ages of 5 and 14 was selected because this type of mortality includes a number of causes – such as road traffic accidents – that are largely preventable and there is substantial variability in the rates of this indicator across countries. The percentage of children who are overweight was chosen as the second indicator because, while undernutrition leading to stunting and wasting in children has been largely eliminated in rich countries, rates of overweight and obesity are a substantial public health concern. Overweight and obesity are linked to a number of negative physical, psychological and psychosocial outcomes for children, both during childhood and later in adulthood.14Economic inequalities in physical health  17

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Child mortality, ages 5 to 14 Figure 3 shows the rate of mortality per 1,000 children in the 10‑year age span from 5 to 14 years old in 2024. The rate was lowest in Iceland, Luxembourg and Ireland, and highest in Mexico and Colombia. The mortality rate tends to be higher among boys than girls in Report Card countries. As shown in Report Card 19, the mortality rate has fallen substantially in most countries in recent decades. However, there are signs that mortality in this age group is increasing in some countries, including the United States15 and Croatia and Poland.16 Figure 3: Child mortality rate, 5 to 14 years old, 2024

Source: UN IGME project. See Technical appendix for full details.Economic inequalities in physical health  18

Unequal chances: Children and economic inequality, Innocenti Report Card 20

Overweight Figure 4 shows the second league table indicator for physical health – the rate of overweight for children aged 5 to 19 years. In 2022, this ranged from 16 per cent in Japan to 58 per cent in Chile. In this group of countries, the rate

Overweight Figure 4 shows the second league table indicator for physical health – the rate of overweight for children aged 5 to 19 years. In 2022, this ranged from 16 per cent in Japan to 58 per cent in Chile. In this group of countries, the rate of overweight tends to be higher among boys than girls. As outlined in Report Card 19, there has been a long‑term increase in the rate of overweight and obesity among children globally, including a steady and persistent rise in this group of countries from around 17 per cent of children aged 5 to 19 in 1990 to around 28 per cent in 2022. Figure 4: Rate of overweight, 5 to 19 years old, 2022

Source: NCD-RisC. See Technical appendix for full details.Economic inequalities in physical health  19

Unequal chances: Children and economic inequality, Innocenti Report Card 20

National economic inequalities and average child physical health How do these indicators of children’s physical health link to measures of economic inequality in each country? Figure 5 shows that countries with higher child poverty are also likely to have a higher rate of child mortality. The relationship here is strong.17 For example, Denmark has low child poverty and relatively low child mortality, while Colombia and Costa Rica have among the highest rates of child poverty and and child mortality. Figure 5: Rate of child mortality, 5 to 14 years old, by child poverty, 2023

Source: As Figures 2 and 3. See Technical appendix for further details.

It may appear from the named countries that this could be explained by different levels of wealth between the countries. But more detailed analysisEconomic inequalities in physical health  20

Unequal chances: Children and economic inequality, Innocenti Report Card 20 indicates that, at a given point in time, income inequality is a much stronger predictor of child mortality (ages 5 to 14) than is national income per capita.18

This finding is consistent with evidence that, among high‑income countries, the rate of child unintentional injury mortality is higher in countries with greater income inequality.19

predictor of child mortality (ages 5 to 14) than is national income per capita.18 This finding is consistent with evidence that, among high‑income countries, the rate of child unintentional injury mortality is higher in countries with greater income inequality.19 Figure 6 shows a similar analysis for the link between Report Card countries’ income inequality and their rate of child overweight. Here also there was a marked tendency for higher income inequality to be associated with a higher rate of overweight.20 Wealth inequalities were much less strongly associated with mortality rate and rate of overweight, although there was still some tendency for countries with higher wealth inequalities to have poorer child health.21 Fi