The Official Poverty Index Is Based on a Comparison of Cash and in-kind Benefits With Family Size.

Child Youth Serv Rev. Author manuscript; available in PMC 2017 Jun 26.

Published in final edited class as:

PMCID: PMC5484166

NIHMSID: NIHMS865174

Young child poverty in the United States: Analyzing trends in poverty and the role of anti-poverty programs using the Supplemental Poverty Measure

Jessica Pac

Columbia University School of Social Work, 1255 Amsterdam Artery, New York, NY 10027

JaeHyun Nam

Columbia Academy Schoolhouse of Social Work

Jane Waldfogel

Columbia Academy School of Social Work

Christopher Wimer

Center on Poverty and Social Policy, Columbia University Schoolhouse of Social Work

Abstract

Between 1968 and 2013, the poverty rate of young children age 0 to 5 years fell by nearly i 3rd, in big part because of the role played by anti-poverty programs. Nonetheless, immature children in the U.S. still face a much higher rate of poverty than do older children in the U.Due south. They likewise proceed to accept a much higher poverty rate than practice young children in other developed countries effectually the earth. In this paper, nosotros provide a detailed analysis of trends in poverty and the function of anti-poverty programs in addressing poverty amid young children, using an improved measure of poverty, the Supplemental Poverty Measure. Nosotros examine changes over fourth dimension and the electric current status, both for young children overall and for key subgroups (by kid historic period, and past child race/ethnicity). Our findings can be summarized in iii key points. First, poverty among all young children age 0–v years has fallen since the showtime of our time series; but absent-minded the condom net, today's poverty charge per unit amidst immature children would exist identical to or higher than it was in 1968. Second, the safety net plays an increasing role in reducing the poverty of young children, especially among Black non-Hispanic children, whose poverty rate would otherwise be xx.8 percentage points higher in 2013. Tertiary, the limerick of support has inverse from virtually all cash transfers in 1968, to about one tertiary each of cash, credit and in-kind transfers today.

1.0 Introduction

The child poverty rate in the U.s.a. is among the highest of developed nations in the world (Smeeding et al., 2016). In 2015, 1 in five children in the United States lived at or below the official poverty line (Proctor, Semega, & Kollar, 2016). With the more comprehensive Supplementary Poverty Measure (SPM), kid poverty rates are lower, but children all the same have the highest poverty rates as compared to working-anile and elderly adults (Renwick & Trick, 2016). Moreover, young children's SPM poverty rate is considerably college than that of older children (twenty.9 pct, compared to xviii.0 percent amid 6–11 year olds and 16.0 percentage among 12–17 year olds (Wimer, Nam, Waldfogel, & Flim-flam, 2016) a pattern that is specially disconcerting given young children's particular vulnerability to the effects of poverty (meet e.g., Brooks-Gunn & Duncan, 1997; Duncan, Morris, & Rodrigues, 2011). While children of all ages may be affected direct and indirectly past poverty, immature children are particularly at take chances, because they are wholly dependent on their parents and caretakers for adequate subsistence and care. Moreover, early childhood (the period from birth through age five) is generally recognized every bit a "sensitive flow", during which children's neurological development and subsequent cognitive and non-cerebral abilities are shaped past the aggregating of babyhood experiences (Almond & Currie, 2011; Noble et al., 2015; Shonkoff et al., 2012).

Early childhood experiences in plow set the stage for later reward or disadvantage. Economist James Heckman and others have documented that nearly half of income inequality in adulthood is due to factors that were set into place by historic period eighteen (Cunha & Heckman, 2007; Heckman, 2006a, 2008b), and that the surround experienced in early on babyhood is a unique determinant of the skill formation critical to reducing the risk of poverty and improving man uppercase and health outcomes after in life (Heckman 2006, 2008a). Several contempo studies have shown that children's skills and ability measured at ages 6 to 8 predict well-nigh 12 percent of the variation in adult years of education (Mcleod & Kaiser, 2000), and up to 20 percentage of the variation in adult wages (Cunha, Heckman, & Schennach, 2010; Currie & Thomas, 1999). A well-established trunk of interdisciplinary research has documented a number of consequences of early babyhood poverty; these differ greatly in upshot by the timing, intensity, duration, and type of scarcity (Brooks-Gunn & Duncan, 1997; Duncan, Yeung, Brooks-Gunn, & Smith, 1998; Pilus, Hanson, Wolfe, & Pollak, 2015). Amongst these, the most salient short-term effects of income poverty include cognitive delays, lower educational attainment, and negative health effects. A number of studies have shown that children exposed to poverty at a immature age have lower levels of academic achievement and lower examination scores on standardized tests (Hair et al., 2015; Milligan & Stabile, 2011; Ratcliffe & McKernan, 2012; Smith, Brooks-Gunn, & Klebanov, 1997). Family income in early on childhood also shows a potent relationship with children'south wellness status, which increases in magnitude and significance over time, probable as a outcome of the cumulative furnishings of negative wellness shocks (Aizer & Currie, 2014; Almond & Currie, 2011; Currie, 1993). Being born into an impoverished family has been associated with structural differences in the brain (Noble et al., 2015), and an increased exposure to environmental pollutants and toxins associated with disadvantage such as depression birth weight, stunting, and decreased cerebral ability (Aizer & Currie, 2014; Currie & Walker, 2011; Schwartz, 1994; Schwartz, Angle, & Bullpen, 1986). Every bit many of the deleterious furnishings of poverty are evident in children who experienced fifty-fifty simply 1 year of poverty (Chaudry & Wimer, 2016), the early childhood period represents an important window for intervention.

Anti-poverty efforts that raise the incomes of families with immature children are likely to yield big returns, considering investments targeted at young children appear to be particularly productive, and more so for the less-advantaged (Cunha & Heckman, 2007; Hair et al., 2015; Heckman, 2006a, 2008a). In addition, numerous studies have shown that the before the anti-poverty intervention, the more sizable the positive effect to the well-existence and human capital potential across the life class of a child (Brooks-Gunn & Duncan, 1997; Cunha & Heckman, 2007; Cunha et al., 2010; Dahl & Lochner, 2012; Duncan et al., 1998; Heckman, 2008a). Although the demand for anti-poverty intervention in early childhood is clear, policymakers must decide the best "package" of anti-poverty interventions; i.eastward. that which has the almost effective impact at the everyman relative cost.

Conventional economic theory suggests that policymakers should have a stiff preference for supplying greenbacks transfers (including tax credits that are consumed as cash) rather than in-kind transfers, every bit these offer the consumer the chance to spend the benefit in the mode that best serves the needs of their family. Nonetheless, the US government has long preferred in-kind transfers for their beliefs-constraining features, as they are structured to ensure that a do good is allocated adequately – especially for children -- and consumed optimally (Currie & Gahvari, 2007). For case, nutritional programs such as SNAP and WIC give assurance that children are nourished, housing programs ensure basic housing, and Medicaid ensures a baseline level of access to healthcare. Although a number of causal studies have shown that in-kind transfer programs positively bear on kid well-existence, in-kind benefits are non a substitute for greenbacks. This point is vividly illustrated in the influential work of Edin and Shaefer (2015), who prove that the need for cash is unique, and cannot be satisfied past food stamps (SNAP) or other in-kind benefits for families with unstable employment; without greenbacks, the needs of the most destitute of families remain unmet. All the same, low-income families face up a considerable disadvantage in accessing regular cash benefits, because in-kind and tax credit benefits are not fungible in the case of the former and come only once a yr in the case of the latter.

1.1 The nowadays newspaper

To date, there is relatively little evidence near the rates and trends in the risk of poverty among children historic period 0–5 in the United States or the role of the condom net in addressing such risk, and none to date that uses a comprehensive measure of poverty such as we use here. In this paper, we provide estimates of the historical trends in early childhood poverty every bit measured past the SPM disaggregated by age and race/ethnicity, followed by an analysis of the current and historical "package of benefits" available to families with immature children. The paper thus provides critical evidence on the economic position of young children over time, and the resources that their families accept at their disposal to see their needs.

Different the official measure out of poverty, the SPM uses a more comprehensive definition of resources, counting authorities transfers, cash and in-kind benefits, and tax credits toward the family unit upkeep. The SPM subtracts from this resource measure non-discretionary expenses, such as medical and kid intendance expenditures, and income taxes. The family unit's total resources are then compared to a poverty threshold that is adjusted to account for family unit size and resource sharing. As nosotros detail in the data and methods section below, the SPM represents a distinct advantage over the official poverty measure.

We first sectionalization immature children in our sample by age into two distinct developmental periods: infancy / toddlerhood (0–2 years) and preschool age (iii–5 years). The gradient of dependency that tapers off once children enter form school shifts at around three years of age, when children achieve a number of developmental milestones. For instance, by the 3rd year, children acquire a great bargain of physical autonomy and begin to master the language skills needed to express their points of view (Waldfogel, 2006); both of these skills are essential to forming peer-relationships and for school grooming. Non only does this partition demarcate a shift in children's physical, emotional, and cerebral development, only the family upkeep undergoes a substantial shift as well. At around the third year, parental spending transitions from one-fourth dimension and persistent child-specific expenses -- such every bit car seats and strollers, and the costs associated with diapering, feeding, etc. -- to a period with expenses that are more regularly integrated into the family budget. While some large costs, such as diapering supplies and specialized gear, may decrease every bit a child transitions from i phase to the next, other costs increase over time, with the exception of the cost of childcare, which typically declines until the child reaches grade schoolhouse (Lino, 2014). Babe and toddler childcare tends to be very expensive, because of the high staff-to-child ratios required. Still, many infants and toddlers are cared for past a parent or relative, while preschoolers are more likely to go to daycare or preschool (Waldfogel, 2006). It is therefore not clear whether the risk of poverty is likely to be higher for infants/toddlers than information technology is for preschoolers or vice versa.

Second, we stratify our sample by race/ethnicity. Historically, racial/ethnic minorities have experienced college rates of poverty than the white, non-Hispanic population as measured under the official poverty measure. Similar patterns take been observed nether the Supplemental Poverty Measure as well (Haveman, Blank, Moffitt, Smeeding, & Wallace, 2014; Nolan et al., 2016b; Brusk, 2015). While condom cyberspace programs are non structured to benefit one race/ethnic group over some other, the anti-poverty effects of these programs may differ by race/ethnicity. While several papers take found larger positive furnishings of rubber internet programs for minority children compared to non-Hispanic white children (encounter due east.m. Hoynes, Schanzenbach, & Almond, 2016), the findings of other studies suggest that children of racial/indigenous minorities experienced larger negative effects of welfare reform every bit well, in the grade of more frequent sanctioning, gaps in insurance coverage, and admission to healthcare (Bitler, Gelbach, & Hoynes, 2005; Schram, Soss, Fording, & Houser, 2009; Wu, 2008). Although information technology is outside the telescopic of the nowadays newspaper to explore the mechanisms behind this disparity, our stratification by a children'southward race/ethnicity allows us to acknowledge and explore this known source of heterogeneity in our poverty rate estimations.

The paper proceeds as follows. After describing our information and methodology for constructing the SPM measure of poverty, we certificate (a) the prevalence of poverty over time for young children, and how this varies by two key factors – child age, and child race/ethnicity; and (b) the effects of regime policies and programs on young child poverty rates, and how these vary by kid historic period and kid race/ethnicity. Appropriately, we brainstorm in the side by side section by describing the data and defining the measures of poverty we employ. Then, in section 3.i, we present trends in poverty for young children as a whole and by age and race/ethnicity. In section 3.2, we analyze the role of the package of benefits bachelor to families with young children. And in Section 4.0, we conclude past summarizing main findings and pointing out limitations and implications for further research.

two.0 Data and Methods

ii.1 Data

Drawing on data synthetic by Fox and colleagues (Pull a fast one on, Wimer, Garfinkel, Kaushal, & Waldfogel, 2015), nosotros employ a sample of over 714,000 children age 0 to 5 years from the Census Bureau's Current Population Survey Annual Social and Economical Supplement (CPS ASEC). The CPS ASEC is the source of official US poverty statistics and provides information going back historically to the 1960s.

We clarify poverty and the function of anti-poverty programs using the Supplemental Poverty Measure (SPM). Because the data required to produce the SPM exists just since 2009, we use the augmented historical data created by Fox et al. (2015), which used imputation techniques to create an SPM measure that tin can capture trends in a historically consistent manner. The data sources used for imputation and the accompanying imputation techniques are described in detail in the appendix of Flim-flam et al. (2015).

Our assay covers the time period from 1968 to 2013. To increase sample size and the accuracy of our estimates, we utilise 3-year moving averages for all our estimates; this is particularly important when we examine finer-grained age groups (i.e., children historic period 0 to 2 years and historic period 3 to 5 years) or sub-groups of children past race/ethnicity.

ii.2 Measures

2.2.1 Measuring Poverty

We use the Supplemental Poverty Mensurate (SPM) as our measure out of poverty. The SPM is ameliorate suited for this analysis than the official mensurate, because the SPM uses a more than comprehensive definition of resources, including both cash and in-kind benefits (such as SNAP, WIC, and housing assistance), too as revenue enhancement credits (such every bit the Earned Income Taxation Credit (EITC) and the Child Taxation Credit (CTC)). Additionally, the SPM subtracts from family resources the value of income taxes and non-discretionary expenses (such as medical out of pocket expenditures, MOOP, and child care costs). Poverty is and so determined by comparing resources with the SPM thresholds, which more than accurately reflect family living standards than practice official thresholds.

The official measure out of poverty was conceived in 1963, and at the time, represented an important milestone in our nation'south State of war on Poverty, as it became the master metric for measuring the need for and role of the social safety net. The official mensurate'southward statistical shortcomings compelled the National University of Sciences to converge upon a prepare of recommendations for improving the mensurate of poverty (Citro and Michael, 1995), resulting in the SPM (Brusk, 2011). We utilise an iteration of the SPM, calculated historically, in the present paper.

The official measure was designed to compare the pre-tax marketplace income of a family against a poverty threshold; if a family's income falls below the threshold, they are considered to be in poverty. Poverty thresholds were prepare at three times the cost of a minimally adequate food nutrition, with adjustments for the size and composition of the family and the age of the householder, updated annually by the Consumer Toll Index (CPI).

There are v major shortcomings of the official measure. First, its measure of resource does non account for in-kind benefits (such equally food stamps) and tax credits (such as the Earned Income Tax Credit), which have become an increasingly important office of the safety net over time. Second, the official measure out does non subtract from available income non-discretionary expenses such as medical out-of-pocket expenditures (MOOP), and child care and work expenses. Third, the official thresholds are based on 1960s family budgets, when nutrient represented 1/3 of low-income family expenditures; food now represents merely about i/6 of family spending with housing representing the single largest detail. Fourth, the official measure uses an outdated definition of the family, for instance excluding from the family unit of measurement cohabiting partners who represent an increasing share of parents and likely practice contribute to and do good from the family unit budget (see e.g. Cherlin, 2010; Mclanahan, 2004). Fifth, official thresholds are not adjusted for geographical differences in the price-of-living, which have become increasingly important over time as housing costs have grown to assume a larger share of family unit budgets (Nolan et al., 2016a).

In summary, the SPM improves on the official measure past more fully bookkeeping for resource, expenses, and resource sharing, comparing household resource confronting poverty thresholds that are adapted for modern standards of living too as differences in costs of living across the US, and applying a broader definition of the household. For this reason, the SPM has been used to generate more than accurate estimates of trends in poverty over time too equally estimates of current poverty today (Fox et al., 2015; Renwick & Fox, 2016; Wimer, Fox, Garfinkel, Kaushal, & Waldfogel, 2016). We detail our construction of the SPM below. For the nearly function, we follow Demography procedures for the SPM merely similar Wimer et al. (2016), we differ from Demography in using an "anchored" SPM measure, as detailed below.

2.2.2 Do good measures

We ascertain cash benefits equally the total amount of welfare (TANF/AFDC), social security (SS), supplemental security income (SSI), and unemployment benefits. We define in-kind benefits as the full of nutrient stamps (SNAP), housing subsidies, Depression Income Home Energy Assistance Program (LIHEAP), and the Special Supplemental Diet Programme for Women, Infants, and Children (WIC). ⁱ Nosotros ascertain taxation credit benefits equally the total of Earned Income Taxation Credit (EITC) and the Child Revenue enhancement Credit (CTC). Nosotros exclude brusk-term credits, such as Making Piece of work Pay, and federal stimulus payments.

2.3 Poverty unit of measurement

Different the official poverty measure out, in which the "poverty unit" is divers as the family (i.east. all individuals in the household related past blood, marriage, or adoption) -- the SPM broadens the definition of families to include single partners (and their children/family unit members), unrelated children under age 15, and foster children under age 22 (when identifiable). We employ the expanded definition in the CPS in all years. Total details of our methodological procedures tin can exist institute in Fox et al. (2015).

two.4 Threshold

The augmented CPS datasets that we use follow the Bureau of Labor Statistics' SPM methodology in constructing poverty thresholds using a five-year average of the Consumer Expenditure Survey (CE) data on expenditures on food, clothing, shelter and utilities (FCSU) by consumer units with exactly 2 children (called the "reference unit of measurement"). Thresholds were adjusted by a three-parameter equivalence scale following BLS and Census procedures, and multiplied by 1.2 to account for boosted basic needs. The equivalence scales were also used to set thresholds for all family configurations.

Furthermore, the SPM thresholds were adjusted for geographical differences in the cost of living using procedures outlined in (Nolan et al., 2016a).\. Geographic aligning of thresholds is of import in guild to account for discrepancies in the costs faced by families in unlike parts of the country that bear on the ability to "make ends meet." The geographical adjustments employ the all-time available data on median rents that is bachelor in each year. For the geographical adjustment during the 1967–1984 menstruation, this is based off of the Decennial Census; for the 1985–2008 flow, Fair Marketplace Rents (FMRs) measured by the U.S. Department of Housing and Urban Development (HUD) are used; for 2009–2014, the Census Bureau's Public Employ Enquiry Files are used, which are based on American Community Survey data. A detailed description of the methods employed in our augmented dataset to construct geographically-adjusted thresholds can exist establish in (Nolan et al., 2016a). Finally, base thresholds vary by whether families are in one of iii housing status groups: owners with a mortgage; owners without a mortgage; and renters, once more following Census and BLS procedures. The shelter and utilities portion of the FCSU is estimated separately for each housing condition grouping, and the geographic aligning is applied to that portion of the threshold.

In dissimilarity with the Census' and BLS' procedures, however, nosotros use 2012 SPM thresholds carried back (and forwards) adjusted only for aggrandizement. This adjustment is based on the Consumer Price Index Research Series Using Current Methods (CPI-U-RS), the Demography' preferred toll index for earnings and income statistics. We refer to this measure as an "anchored SPM," since it is anchored, or fixed, in 2012 living standards in an coordinating fashion to official statistics. The Census' and BLS' SPM uses a relative poverty threshold, which changes over time with underlying consumer expenditures on the bones bundle of appurtenances in the FCSU basket. See (Wimer, Flim-flam, et al., 2016)for a more extended discussion of the virtues of an anchored versus a relative threshold for analyzing trends over time. For the nowadays study, nosotros prefer the anchored measure over the relative measure because the relative threshold makes it more hard to identify whether changes in poverty over time are the event of changes in income/resource or changes in underlying spending patterns, while the anchored threshold can provide for a much clearer identification of poverty trends stemming solely from changes in income/resources. Full details of our methodological procedures for the anchored threshold tin be plant in (Wimer, et al., 2016).

ii.5 Resources

We briefly draw below how (Fox et al., 2015) calculate the value of various types of resources. Especially in the very early on years of available CPS data, Fox et al. rely on imputation approaches to estimate resources that the CPS did non enquire respondents most at the fourth dimension. The imputation approach builds upon extensive previous piece of work past a multifariousness of researchers adapting the Census SPM to alternate datasets such every bit the American Customs Survey, or to earlier years of the CPS when not all requisite data were available (Betson & Michael, 1993; Bohn, Danielson, Levin, Mattingly, & Wimer, 2013; Isaacs, Marks, Smeeding, & Thornton, 2010; Levitan et al., 2010; Wheaton, Giannarelli, & Martinez-schiferl, 2011). The near-greenbacks and in-kind benefits added to the SPM resources are routinely measured by the CPS in contempo years, including the receipt of the Supplemental Diet Assistance Program (SNAP); the National School Dejeuner Program (NSLP); the Special Supplemental Nutrition Programme for Women, Infants, and Children (WIC); Federal housing assistance programs; and the Low Income Abode Energy Assistance Program (LIHEAP). Of the five in-kind benefits, simply LIHEAP is measured in the CPS in all years that the program existed. For certain years, then, benefits for the remaining four programs must be imputed. For example, SNAP receipt and values in the CPS are not available prior to 1979. Thus, these must be imputed for all years betwixt 1967 and 1978. A similar approach is used in the imputation of the NSLP (also prior to 1979), housing assistance (prior to 1975), and WIC (prior to 2000). Values of the NSLP are estimated in a similar manner to SNAP, whereas values of housing assistance are based on estimated household rental payments and the divergence between estimated rental payments and the shelter component of the poverty threshold and values of WIC are estimated based on annual administrative data. A total clarification of these procedures can exist establish in the detailed technical appendix to Play tricks et al. (2015).

Similarly, measures of after-taxation income do not exist in the CPS prior to 1979, and even after 1979 are e'er estimated using a tax simulation program. The government created the EITC, however, in 1975 (albeit in a much smaller form than it exists today) and the CTC in 1997 to provide additional benefits to families with children. Income and payroll taxes have manifestly existed for much longer. To estimate these after-taxation income measures in years prior to 1979, we rely on Fob et al.'s utilize of the National Bureau of Economic Research'southward TAXSIM model (Feenberg & Coutts, 1993). Full details on TAXSIM are in the technical appendix of Fob et al. (2015).

2.6 Non-discretionary expenses

The SPM also subtracts medical out-of-pocket expenses (MOOP) from income, equally well equally capped work and child intendance expenses. The CPS asks nearly MOOP and child care expenses direct only starting in 2009, meaning these must be imputed into the CPS for most the whole menstruum. Piece of work expenses (e.chiliad., transportation costs) are never straight observed in the CPS and are currently estimated based on the Survey of Income and Program Participation (SIPP). We judge historical work expenses back to 1997 using an extended fourth dimension serial provided to Play a trick on et al. past the Census Agency. For years prior to 1997, these are adjusted for inflation. Medical and child care expenses were imputed from the CE. Further details on the imputation of medical, work, and kid care expenses are found in the technical appendix of (Play a joke on et al., 2015).

2.vii Methods

Using the anchored SPM, we judge poverty among young children overall, and then within key subgroups. Considering the youngest children may exist especially vulnerable to poverty, we analyze children age 0–2 (infants and toddlers) separately from children historic period iii–5 (preschool-anile children). Due to longstanding racial/indigenous differences in the take a chance of poverty, we too examine subgroups defined by race/ethnicity, analyzing White not-Hispanic, Black non-Hispanic, and Hispanic children (sample sizes are as well small to analyze other groups). In each of our analyses, we compare young kid poverty estimates with and without the inclusion of taxes and transfers.

iii.0 Results

3.1 Trends in poverty

We begin past exploring trends in young child (age 0 to v years) poverty measured using the anchored SPM. Our results reveal a substantial refuse in poverty amid young children since 1968. As shown in Figure 1, the young child poverty charge per unit falls from 29.1 percent in 1968 to 19.3 percent in 2013. Notably, this decline is only evident after taking government anti-poverty programs into account, which shows the growing importance of government programs in reducing poverty. Absent anti-poverty programs, the poverty rate amid young children would exist higher today than it was in 1968.

Trends in Immature Child Poverty from 1968–2013: Estimates using Anchored SPM

Note: iii-twelvemonth moving averages of Anchored SPM Poverty with geographically-adjusted thresholds

These overall patterns hold when nosotros look separately at children age 0–2 and age 3–5 (Effigy 2). The levels of poverty, overall trend, and role of anti-poverty programs are similar for both age groups. These findings brand sense because anti-poverty policy and income supports are mostly targeted at families with children of all ages, rather than at families with children within a particular age group. The similarities in poverty rates pre-tax and transfers propose that the take chances of poverty is roughly the aforementioned for infants/toddlers and preschoolers.

Trends in Young Kid Poverty, by Child Historic period

Note: 3-year moving averages of Anchored SPM Poverty with geographically-adjusted thresholds

Notation: 3-year moving averages of Anchored SPM Poverty with geographically-adjusted thresholds

However, analyses past race/ethnicity reveal sharp differences (Figure iii). Overall, poverty among Black non-Hispanic and Hispanic young children is more twice that amidst White non-Hispanic young children for the unabridged fourth dimension serial even afterward taking the rubber net into business relationship. Only, when taking a closer wait at specific trends in poverty by race/ethnicity, the story is quite different.

Trends in young child poverty, by race/ethnicity

Note: three-year moving averages of Anchored SPM Poverty with geographically-adapted thresholds

Note: iii-year moving averages of Anchored SPM Poverty with geographically-adjusted thresholds

Note: 3-yr moving averages of Anchored SPM Poverty with geographically-adjusted thresholds. This graph begins at 1971 because Hispanic children are only identifiable in the CPS ASEC from 1970 onward.

Panel A shows that poverty among White non-Hispanic young children has fallen past more one-half since 1968, from 23.ii per centum to 10.7 pct, subsequently taking the rubber internet into account. Without the condom net, the poverty rate in 2013 would be seven.2 percentage points higher - every bit high equally it was in 1968.

While poverty among Black non-Hispanic young children has also fallen past about half since 1968, levels have always been much higher and continue to be so (panel B). Over threescore percent of young Black not-Hispanic children were poor in 1968, and just over 30 percentage are poor now – much higher rates only besides a much starker decline in absolute terms than is observed for White non-Hispanic children. Anti-poverty programs play an important role for Black non-Hispanic children throughout the period, but more than so over fourth dimension, reducing poverty now by xx.viii percentage points -- from 53.viii percentage to 33.0 percent in 2013. Notably, there is also an improvement in pre-tax and transfer poverty for Blackness non-Hispanic immature children.

The trend for Hispanic young children (from 1971 onwards; Hispanic children non identified in CPS before that year) is shown in Panel C. Poverty falls for this group from 49.two percent in 1971 to 30.7 percent in 2013, after taking the safe net into business relationship. Prior to the early 1990s, there is fiddling apparent impact of the safety cyberspace for Hispanic children, simply this changes starting in the early 1990s, and by 2013, the safety net is reducing poverty for this grouping past 15.ix percentage points.

These results indicate that authorities programs play an important role in reducing poverty for both Blackness not-Hispanic young children and Hispanic young children – and specially in recent years. While poverty rates regardless of race/ethnicity remain virtually flat for the entire fourth dimension series absent the condom cyberspace, poverty rates for Black not-Hispanic young children and Hispanic young children greatly turn down in the early 1990s, after taking the government programs into account.

3.2 The role of specific types of anti-poverty programs

We now turn our attending to specific types of anti-poverty programs to examine their roles in reducing poverty among young children. Nosotros consider three main types of anti-poverty programs: cash benefits, in-kind benefits, and tax credits. As described before, cash benefits include AFDC/TANF, land and local public assistance programs, Supplemental Security Income (SSI), Social Security Income, and Unemployment Insurance. In-kind benefits include SNAP, housing subsidies, energy assistance programs, and WIC ^two . Finally, tax credits include the EITC and the CTC (temporary and well-nigh-universal initiatives such as Making Piece of work Pay and the federal stimulus parcel during the recent recession are excluded).

Nearly half of immature children lived in families that received support from at least one of these programs in 1968, and this proportion has grown to ii-thirds today (Appendix Table i). The composition of this support has also changed dramatically, as shown in Effigy 4. Among those receiving whatsoever help, over 90 pct of that assistance was in the form of greenbacks in 1968. The relative contributions of in-kind benefits and especially tax credits take grown considerably over time, such that at present each of these types of help contributes about ane third of the overall do good package, with cash assistance providing the other third. Equally a result, cash benefits make upwardly a much smaller portion of the safe net for families with young children than they did in the past. When nosotros examine children separately past child age (presented in Panels A and B of Figure five), we see that these overall patterns are nearly identical.

Trends in cash, in-kind, and credit benefits as a proportion of all benefits for 0–five year olds from 1968–2013

Notes: Cash benefits include AFDC/TANF, public assistance programs, Supplemental Security Income, Social Security Income, Unemployment Insurance. In-kind benefits include Food Stamp/SNAP, housing subsidies, and WIC. Credit benefits include EITC and CTC.

Trends in cash, in-kind, and credit benefits as a proportion of all benefits past child age group from 1968–2013

Notes: Greenbacks benefits include AFDC/TANF, public aid programs, Supplemental Security Income, Social Security Income, Unemployment Insurance. In-kind benefits include Food Postage stamp/SNAP, housing subsidies, and WIC. Credit benefits include EITC and CTC.

Notes: Cash benefits include AFDC/TANF, public assistance programs, Supplemental Security Income, Social Security Income, Unemployment Insurance. In-kind benefits include Nutrient Postage/SNAP, housing subsidies, and WIC. Credit benefits include EITC and CTC.

Figure 6 shows the composition of support by kid race/ethnicity. The design for White non-Hispanic children is similar to that seen for immature children overall, with greenbacks benefits declining as a share of the support packet from over ninety percent in 1968 to about 45 pct in 2013, with tax credits and in-kind benefits contributing the other 35 per centum and 20 percent respectively. Blackness non-Hispanic children, in contrast, were already receiving a notable share (nearly 20%) of their back up in the class of in-kind benefits in 1968 and this share rises to virtually 40 pct in 2013, with cash benefits and taxation credits each contributing near xxx percent of the whole. The pattern for Hispanic children (from 1971 onwards) reveals the particularly sharp growth of tax credits for this grouping, with tax credits now contributing nigh 40 per centum of the total support package for this group, while cash assistance and in-kind benefits each contribute nigh 30 pct.

Trends in greenbacks, in-kind, and credit benefits equally a proportion of all benefits for 0–5 twelvemonth olds from 1968–2013, past race/ethnicity

Notes: Cash benefits include AFDC/TANF, public assistance programs, Supplemental Security Income, Social Security Income, Unemployment Insurance. In-kind benefits include Food Stamp/SNAP, housing subsidies, and WIC. Credit benefits include EITC and CTC

Notes: Cash benefits include AFDC/TANF, public assistance programs, Supplemental Security Income, Social Security Income, Unemployment Insurance. In-kind benefits include Food Postage stamp/SNAP, housing subsidies, and WIC. Credit benefits include EITC and CTC

Notes: Greenbacks benefits include AFDC/TANF, public assistance programs, Supplemental Security Income, Social Security Income, Unemployment Insurance. In-kind benefits include Food Postage/SNAP, housing subsidies, and WIC. Credit benefits include EITC and CTC. This graph begins at 1971 because Hispanic children are only identifiable in the CPS ASEC from 1970 onward.

The general shift toward more assistance provided through in-kind benefits and tax credits, rather than cash help, is confirmed in Figure 7, which displays the boilerplate corporeality of assistance received from each type of program (among those receiving any such assist). The boilerplate value of help for families with young children ages 0–5 has held roughly constant at almost $viii,000 to $x,000 total for all children ages 0–five in the SPM unit (in constant 2013 dollars) from 1968 to 2013. Even so, the composition has shifted to relatively more dollars from in-kind programs and taxation credits, and relatively fewer in the form of cash.

Trends in the average value of benefits for 0–5 year olds receiving benefits from 1968–2013

Notes: Cash benefits include AFDC/TANF, public assist programs, Supplemental Security Income, Social Security Income, Unemployment Insurance. In-kind benefits include Food Stamp/SNAP, housing subsidies, and WIC. Credit benefits include EITC and CTC. All years adapted to 2013 abiding dollars.

Effigy 8 indicates that these patterns are similar by age grouping, although preschoolers (ages 3–5) tend to receive slightly higher average amounts than exercise infants/toddlers. With regard to differences by race/ethnicity, Figure ix indicates that both levels and trends in average benefit amounts differ considerably. White not-Hispanic immature children accept historically received lower amounts on average, presumably because they take had college pre-tax and transfer incomes, and their boilerplate benefit amounts have held roughly constant over fourth dimension. Black non-Hispanic immature children, in contrast, have historically received larger boilerplate amounts, with some turn down over time, while Hispanic immature children received relatively high benefit amounts at the start of the fourth dimension catamenia but non in more than recent years.

Trends in the boilerplate value of benefits for 0–5 year olds receiving benefits past child age from 1968–2013

Notes: Cash benefits include AFDC/TANF, public assistance programs, Supplemental Security Income, Social Security Income, Unemployment Insurance. In-kind benefits include Nutrient Stamp/SNAP, housing subsidies, and WIC. Credit benefits include EITC and CTC. All years adjusted to 2013 constant dollars.

Notes: Cash benefits include AFDC/TANF, public assistance programs, Supplemental Security Income, Social Security Income, Unemployment Insurance. In-kind benefits include Food Postage/SNAP, housing subsidies, and WIC. Credit benefits include EITC and CTC. All years adapted to 2013 constant dollars.

Trends in the average value of benefits for 0–5 year olds receiving benefits from 1968–2013, by race/ethnicity

Notes: Cash benefits include AFDC/TANF, public assist programs, Supplemental Security Income, Social Security Income, Unemployment Insurance. In-kind benefits include Nutrient Stamp/SNAP, housing subsidies, and WIC. Credit benefits include EITC and CTC. All years adjusted to 2013 constant dollars.

Notes: Cash benefits include AFDC/TANF, public assistance programs, Supplemental Security Income, Social Security Income, Unemployment Insurance. In-kind benefits include Food Stamp/SNAP, housing subsidies, and WIC. Credit benefits include EITC and CTC. All years adjusted to 2013 constant dollars.

Notes: Cash benefits include AFDC/TANF, public assistance programs, Supplemental Security Income, Social Security Income, Unemployment Insurance. In-kind benefits include Food Stamp/SNAP, housing subsidies, and WIC. Credit benefits include EITC and CTC. All years adjusted to 2013 constant dollars. This graph begins at 1971 because Hispanic children are merely identifiable in the CPS ASEC from 1970 onward.

The large, persistent black/white gap in benefit levels is parallel to the racial gap in labor marketplace earnings; as benefit calculations are oft based in function on pre-revenue enhancement/pre-transfer market income, on average, it is no surprise that families with lower marketplace earnings receive higher benefits. ^three Economists guess that the blackness/white gap in earnings has remained big and stagnant over our time series amidst men, yet among women, the gap has notably widened (see due east.yard. Altonji & Blank, 1999). This overall pattern is consistent with our finding from Figure 9 that the average benefit levels among Black non-Hispanic children have remained near 50 percent higher than that of White not-Hispanic children. This point is emphasized in Effigy three, where the pre-tax/pre-transfer poverty rates of Blackness non-Hispanic children are consistently 30 to 40 percentage points higher than that of White non-Hispanic children. As the racial gap in post-tax/post-transfer poverty has decreased past one-half in the same menstruum, higher benefit levels appear particularly important in endmost the racial gap in poverty. That the same gap in benefit levels is not evident between Hispanic and White not-Hispanic children may exist because simply documented Hispanic immigrants – who probable have college market incomes than those who are undocumented -- are generally eligible for benefits.

4.0 Conclusion and discussion

In this paper, we provide estimates of historical trends in poverty for young children ages 0 to 5, using an improved measure of poverty, the anchored Supplemental Poverty Mensurate. Three chief findings emerge.

First, we detect that poverty amongst all young children historic period 0–5 has declined since 1968, with the sharpest decline get-go in the early 1990s. However, this decline only occurs when taking regime anti-poverty programs into account. Absent-minded these programs, today'due south poverty rate amongst young children would be identical to or college than it was in 1968. This effect echoes the findings of previous literature where the same pattern was detected amidst all children (Fox et al., 2015; Short, 2016) and amongst immature children (Wimer, et al., 2016). 2nd, trends in poverty amid young children differ greatly past race/ethnicity. Although post-tax / post-transfer poverty rates among all children have all fallen since the commencement of the fourth dimension series, the poverty rates of Blackness non-Hispanic and Hispanic children today are three times that of White non-Hispanic children, a tendency that has persisted since the early on 1990's (Eggebeen & Lichter, 1991; Garrett, Ng'andu, & Ferron, 1994; Seccombe, 2000). Anti-poverty programs play an increasingly significant role in reducing poverty for all iii groups, particularly amid Black not-Hispanic children, reducing poverty in 2013 by xx.8 percentage points. It wasn't until the early 1990s that these programs had a substantial effect amidst White non-Hispanic and Hispanic children, a trend noted in at least one earlier report (Lichter, Qian, & Crowley, 2005). The convergence of poverty rates between non-Hispanic White children and racial/indigenous minorities has emerged in previous research every bit well. Notably, similar patterns were detected using the Supplemental Poverty Measure in two previous studies (Nolan et al., 2016b;Short, 2015). Third, the fraction of immature children living in families that receive back up from regime anti-poverty programs has gradually grown, while the composition of this support has changed; in-kind and tax credit benefits have grown considerably while cash benefits have decreased over fourth dimension. In 1968, over 90 percent of benefits were in the form of cash; today, benefits are composed of most ane-third in cash, the remainder divide evenly between tax credits and in-kind transfers.

That benefits accept shifted away from cash transfers to in-kind and tax credit transfers is the unsurprising product of a litany of policy preferences for conditional transfers. As a upshot, cash benefits have become increasingly difficult to access amidst families with children lowest on the income distribution. Historically, the largest cash benefit plan aimed at families with children was Help to Dependent Children (ADC) (which became AFDC in 1962 and TANF after the 1996 reform), which was conceived to aid widowed women care for their immature children, and somewhen expanded to include families whose breadwinners were unemployed. Information technology wasn't until the late 1980s and early 1990s that employment requirements were enforced, and under the 1996 Personal Responsibleness and Piece of work Opportunity Reconciliation Human activity (PRWORA), time limits for receipt were set and states were given the autonomy to create and enforce more than rigorous piece of work requirements, re-allocate expenditures, and restrict do good receipt to their liking. These changes acquired caseloads to collapse to historical lows, every bit many of those who were eligible under AFDC were no longer and so under TANF, or were diverted or "pushed off" the rolls (Ziliak, 2015). Although much of the analysis on AFDC/TANF found that it was successful in lifting families out of poverty prior to 2000, mail-2000 trends show that TANF has become less responsive to economic need and increasingly unavailable to many families at the bottom of the income distribution (Ziliak 2015; Moffit & Scholz 2010; Edin & Shaefer, 2015). TANF at present fills a smaller per centum of the poverty gap than AFDC did (Moffit & Scholz, 2010), and has been less responsive to business cycles than other rubber-net programs that favor the working poor (Bitler & Hoynes 2010). Since the mid-1980's, expansions in other cash benefit programs either targeted families with higher earnings (such as Unemployment Insurance), or favored the elderly or disabled without children (such as Social Security and SSI), with sharp declines in those programs aimed at families with children – especially those with low incomes (Ben-Shalom, Moffitt, & Scholz, 2011; Moffit & Scholz, 2010; Scholz, Moffitt, & Cowan, 2009; Ziliak, 2004).

Afterwards PRWORA, the Earned Income Tax Credit (EITC) quickly grew to become i of the largest anti-poverty programs (in terms of expenditures and participation), and today is widely lauded for its anti-poverty effectiveness. The refund amounts received by recipients are big relative to cash welfare benefits and studies have shown positive furnishings on well-being and poverty alleviation (Dahl & Lochner, 2012; Gundersen & Ziliak, 2004). However, the EITC does not attain many of the neediest families because eligibility hinges on the child's parent both working and filing tax returns, and increasingly, the largest stipends are received by the working poor and those in a higher place the poverty line (Ben-Shalom, Moffitt, & Scholz, 2011; Moffitt, 2013).

SNAP and WIC accept remained a disquisitional pillar of support for depression-income families, especially those experiencing extreme poverty (Hoynes et al., 2016; Moffitt, 2013; Shaefer & Edin, 2013). Both programs appear to have positive effects on child health and well-being (Almond, Hoynes, & Schanzenbach, 2011; Hoynes, Page, & Stevens, 2009), and on the long-run economic sufficiency for women (Hoynes et al., 2016). Although SNAP (and WIC) accomplish more depression-income families than TANF, SNAP (and WIC) cannot contribute to the bottom line of the family unit budget in many domains, every bit they are not legally transferrable to cash. Overall, information technology is clear that while cash transfers have declined both in proportion to credit and in-kind transfers and in accented corporeality since 1968, mail service-tax/post-transfer poverty has declined dramatically for young children in the same period. Every bit the sum of all three types of benefits has remained somewhat stable, what was lost in the refuse of greenbacks benefits is deemed for by increasing credit benefits. Withal, whether the alter in the composition of benefits has altered the effectiveness of the safety cyberspace is outside the scope of the present paper, representing an of import avenue for future enquiry.

The fact that we discover few detectable differences in the patterns of poverty by child historic period indicates that families are uniformly benefiting from the prophylactic cyberspace in this highly sensitive developmental period. With the mounting show on the primacy of investment during early babyhood, a smaller function for the condom net for families with infants/toddlers would take been disconcerting. That families appear to exist accessing the safety cyberspace equitably in both early on babyhood stages is a promising finding. Although we are unable to estimate the distribution of benefits amidst children within an SPM unit or the consumption of benefits of children relative to adults, the fact that young children increasingly have access to these benefits suggests an improvement in well-being, at to the lowest degree in terms of poverty.

The present study does take some limitations. First, nosotros practice not take into account whatever potential behavioral responses to the safety-net programs in estimating the effects of policies and programs. For example, families with young children might respond in unlike ways that we find in the data if some policies and programs did not exist. Second, the estimates of poverty presented hither do not conform for the underreporting of income and benefits. Information technology is well know that the underreporting of benefits is a problem in survey information including the CPS (Meyer et al., 2009) so that correcting for the underreporting may provide a dissimilar picture of poverty among young children.

In spite of these limitations, our results conspicuously point that regime programs and policies are on the whole effective at reducing poverty among immature children, and more so over time. In-kind and tax credit policies and programs have played a particularly important role since the early 1990s. However, the young child poverty charge per unit remains loftier, particularly for Black not-Hispanic and Hispanic children, both in contrast to that for older children and to that seen in other countries. As a country, nosotros yet have much to practice to improve poverty among immature children. However as indicated by our findings, we are heading in the correct direction.

Appendix

Figure A1

Rate of benefit receipt among children 0–five years old

Footnotes

¹School lunches are excluded from this category for the present study, as Census valuation procedures for school lunch hateful that a large number of children who are not actually in the School Tiffin Programme receive a positive monetary value of the subsidy nevertheless. This is considering children in schools where large percentages of students receive free or reduced school lunch practice derive some economic benefit from the larger subsidies going to other children, only at that place is no consequent budgetary value currently bachelor over time that can be used to distinguish children actually enrolled in the plan and those only deriving a monetary benefit from the program though non enrolled.

²As detailed in footnote one, school lunches are excluded from this category for the present study

^threeAlthough this is true on average for ways-tested safety net programs, information technology is not the dominion. There is some variation in eligibility and benefit levels beyond safety net programs, and equally we described above, some programs benefit impoverished families with higher earnings over those with lower earnings, such as Unemployment Insurance.

Contributor Data

Jessica Pac, Columbia University Schoolhouse of Social Work, 1255 Amsterdam Avenue, New York, NY 10027.

JaeHyun Nam, Columbia University Schoolhouse of Social Work.

Jane Waldfogel, Columbia University Schoolhouse of Social Work.

Christopher Wimer, Center on Poverty and Social Policy, Columbia University School of Social Work.

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