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2 Data and methods

2.1  Data description and limitations

The study uses the Integrated Data Infrastructure (IDI), which was developed and is maintained and held by Statistics New Zealand. The data is held in a secure environment and made available to bona fide researchers under strict conditions. The IDI includes a wide range of survey and administrative data from across government agencies. This study uses data sourced primarily from the Ministry of Social Development (MSD - related to benefits, CYF care and protection and youth justice), the Department of Corrections (sentencing), the Ministry of Education (schooling and tertiary study participation and achievement), the Department of Internal Affairs (birth and death registrations), the Ministry of Health (mental health and addiction service usage and mental health pharmaceuticals), Inland Revenue (salaries and wages) and the Ministry of Business, Innovation and Employment (movements into and out of New Zealand).

Data is rounded to a multiple of three to protect confidentiality, and small cells are suppressed. As a result data in tables and figures may not add exactly to totals.

A number of potential data issues were outlined in Treasury Analytical Paper 15/01,[4] and are relevant to this study also. Some of these issues are summarised here:

  • The IDI includes information on children who were referred to CYF by the New Zealand Police because they had broken the law. However, the proportion of young people who have contact with the New Zealand youth justice system as a whole is higher than reported here. This is because the vast majority of apprehensions by the Police are dealt with by caution or warnings or by the Police Youth Aid Section and reflects the system's emphasis on diverting young offenders who commit lower-level offences away from formal youth justice processes where possible.
  • Benefit data can be used to identify periods when children and young people are supported by a benefit as a child, periods when they are the primary recipient of a benefit in adulthood and periods when they are supported by a benefit as the partner or spouse of a primary benefit recipient. The benefit data covers the period 1 January 1993 onwards, so for the 1990/91 cohort, this only observes whether the child is supported by benefits after around age two.
  • Benefit data has been used to identify the parents and caregivers of the young people in the study populations, which means that some information about parents or caregivers, such as their corrections sentencing history or their qualifications is only known for children who have been supported by a benefit at some stage. For the 1990/91 cohort, this is about 50% of young people.
  • A child or young person's contact with CYF for care and protection reasons can be divided into a number of different levels of contact[5] depending on the highest level of intervention. Administratively derived measures of the proportion of children who have had a finding of abuse or neglect may not provide a reliable measure of the real occurrence of child maltreatment however. They will reflect both variations in the extent to which children who experience maltreatment are notified to CYF as well as the uncertainty inherent in making a determination that maltreatment has occurred. In addition, the CYF data is incomplete in the early 1990s, and therefore some of the estimates of service use for this period will be understated.

Service cost data

This paper includes estimates of some of the largest fiscal costs that are associated with different groups of individuals when they are aged 25 to 34. The costs included cover benefit payments and the costs of serving sentences administered by the Department of Corrections. Only these costs were analysed because our method of estimating costs at ages 25 to 34 uses data for an earlier birth cohort (those born in 1978/79), and information on the use of other government services is not available for that earlier cohort.

All cost estimates used in this study are CPI adjusted to December 2014 dollars.

Benefit costs

Benefit costs were categorised into three groups - Tier 1 (main benefits), Tier 2 (supplements) and Tier 3 (additional support for people in hardship). Working for Family tax credits, student allowances and student loans were not included in the study.

In the early childhood period of the study, the Tier 1 benefits included Domestic Purposes Benefit, Widow's Benefit, Unemployment Benefit, Sickness Benefit, Invalid's Benefit, Orphan's and Unsupported Child Benefits, Independent Youth Benefit and Emergency Benefit. More recently, following changes to the benefit system in 2013 (and some earlier changes), Tier 1 benefits have included Jobseeker Support, Sole Parent Support, Supported Living Payment and their subcategories as well as Youth Payment and Young Parent payment.[6]

Tier 2 supplements include Accommodation Supplement, Family Tax Credit (not including payments made by IRD), Disability Allowance, Orphan's Benefit or Unsupported Benefit, and Foster Care Allowance. Tier 3 additional supports included Funeral Grant, Special Needs Grant and Temporary Additional Support.

Corrections costs

The costs of serving custodial and community sentences were calculated by multiplying the length of each sentence (taking the days actually served) by an average cost per day from a table of average per day sentence costs provided by the Department of Corrections.[7] The sentences and orders for which cost data is available include prison, remanded in custody, supervision and related sentences (including extended supervision orders and intensive supervision), community detention, community work, other community sentences, home detention, parole, post-detention conditions, released to home detention and released with conditions.

The average cost figures provided by the Department of Corrections related to the last four financial years. In this analysis, the cost figures for those four years were averaged (giving more weight to recent data) and applied historically (after adjusting for inflation). The cost estimates include both direct and indirect costs. Note that average per person costs are not the same as marginal costs, and therefore the figures used in this analysis cannot be used to calculate the aggregate costs that could be added or saved by increasing or decreasing the total numbers of persons serving sentences.


  • [4]Crichton, S., Templeton, R., and Tumen, S. (2015). Analytical Paper 15/01: Using Integrated Administrative Data to Understand Children at Risk of Poor Outcomes as Young Adults.The Treasury. See:
  • [5]These categories are as follows:
    • 'Notification' occurs where a member of the public or an agency has expressed a concern about the care or protection of the child to CYF and this has been by recorded as a report of concern by a social worker. This includes cases where no abuse or neglect is substantiated.
    • 'Substantiated findings of abuse or neglect' occur where a social worker has made a formal finding that the child has suffered abuse or neglect. This may also include cases where there is a Family Whānau Agreement or Family Group Conference but no care episode recorded.
    • 'Care' occurs when a court has determined that a child or young person is in need of care and protection and grants a custody or guardianship order. In most cases, the child or young person will have had a substantiated finding of abuse or neglect.
  • [6]Note that Emergency Benefit, Orphan's Benefit and Unsupported Child's Benefit were unchanged.
  • [7]If more than one sentence was being served simultaneously, the cost estimate applied was that for the highest (most serious) sentence.
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