Examining the link between unemployment and the number of children entering care

The impacts of the economic downturn are far-reaching; work carried out by Sandwell Council has identified a relationship between changes in the unemployment rate and the number of children entering care.  The Children, Young People & Families Directorate commissioned the Observatory to examine whether a similar relationship existed in Warwickshire.  The attached Briefing Note summarises our analysis.

We confirm that there is a relationship between the two variables – as unemployment increases, so does the number of children entering care.  However, our analysis suggests that there is a lag period, and that a change in unemployment will most accurately predict the change in the number of children entering care in the following year.  It is also important to remember that correlation does not necessarily mean causation; there may be other variables that can more accurately explain the relationship between demand for care and unemployment.

Looking ahead, the Office for National Statistics states that “unemployment is forecast to rise … by the second quarter [of 2011], falling back to 6.4 per cent by 2015”.  Although many commentators regard this projection as optimistic, it is reasonable to suggest that we can use current unemployment trends to provide an indication of children entering care next year.  If the ONS forecast is accurate, we can expect overall reductions in unemployment during the next three or four years.  On that basis, we could also expect reductions in the number of children entering care in Warwickshire over this period.

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