Rising Child Poverty in Europe: Mitigating the Scarring from the COVID-19 Pandemic

IMF Working Papers, June 30, 2023

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Child poverty increased dramatically during the COVID-19 pandemic.
In 2020 alone, the number of children suffering from poverty in the EU increased by 19 percent, or close to 1 million.
Left unaddressed, this would not only affect individuals’ life prospects and well-being but also have long-term economic implications.
The paper argues that policies should be deployed to reduce rapidly the number of children affected by poverty and mitigate the long-term impact of poverty.

Pandemic impact:
- 2020: number of children in poverty in the EU increased by 19 percent.
- 2020: increase corresponded to close to 1 million children.
Long-term risks:
- Unaddressed child poverty can produce scarring effects on life prospects, well-being, and broader economic outcomes.

Immediate measures to reduce child poverty:
- Labor policies and reforms that increase parental work and the labor income of poor parents.
- Fiscal spending on family and children that can have a powerful and immediate impact.
Complementary public investments to mitigate long-term impact:
- Education and childcare.
- Health.
- Housing.