CHILD POVERTY AND ANTIPOVERTY POLICIES IN THE U.S.

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CHILD POVERTY AND ANTIPOVERTY POLICIES IN THE U.S.

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1. CHILD POVERTY AND ANTIPOVERTY POLICIES IN THE U.S. Ohio State University College of Social Work Robert J. O’Leary Lecture, November 17, 2008 Sandra K. Danziger, Professor of Social Work and Research Professor of Public Policy I would like to thank my hosts here at Ohio State, especially Professors Bill Meezan and Celeste Burke.I would like to thank my hosts here at Ohio State, especially Professors Bill Meezan and Celeste Burke.

2. Outline Poverty definition & measures Trends in child poverty & demographic differences Comparisons with other industrial nations Conceptual models of how poverty hurts children Can policies reduce child poverty? Can programs reduce the disadvantages of living in poverty? Implications, toward a future agenda

3. Poverty measure The official income poverty measure in the U.S. is a standard indicator of child disadvantage. We use it despite many problems with the measure and proposals to change it. What does it measure? Who is counted as poor?

4. Official Poverty Measure (Orshansky) Threshold: based on 1955 economy food plan; adjusted only for inflation using consumer price index, not for increased real living standards Income Concept: Annual money income (noncash transfers & taxes not counted because they were not common in mid-1960s) Family Size & Composition: equivalence scale based on food needs for a 1969 mix of family sizes & types; does not recognize cohabitation In the U.S., poverty is measured strictly in terms of absolute levels of cash income. In other countries, some relative measures are also considered, relative income level, and measures that take into account social exclusion or isolation, and other forms of hardship. In the U.S., poverty is measured strictly in terms of absolute levels of cash income. In other countries, some relative measures are also considered, relative income level, and measures that take into account social exclusion or isolation, and other forms of hardship.

5. Census Bureau's Official Poverty Measure, 2006 Elderly unrelated individual $ 9,669 Nonelderly unrelated individual 10,488 Married couple, no children 13,500 Single mother, 2 children 16,242 Married couple, 2 children 20,444 Married couple, 4 children 26,938 By comparison, the minimum wage by law in 2006 was $ 5.15 per hour, so a full time full year entry level job (2000 hours) paid $ 10,300, below poverty for even one person.By comparison, the minimum wage by law in 2006 was $ 5.15 per hour, so a full time full year entry level job (2000 hours) paid $ 10,300, below poverty for even one person.

6. Figure 1. Poverty Rates by age, 1959-2006 This table uses the U.S. official poverty standard that counts as poor all persons whose total cash income from all family members falls below the standard amount set each year. Rates of poverty for children under age 18 fell in the 1960s and peaked again in the 1980s. It has been fairly stable ever since, at greater than 17% of these families. To add to this table, in 2007 child poverty rose again from 17.4 to 18.0%. Poverty among adults under age 65 fell most dramatically in the 1960s and has grown slightly since then, but always below rates for families with children. Poverty among elders was the highest of all groups before the 1960s and fell sharply in both the next two decades. It has continued to decline although more slowly ever since, and is lower than among other groups. The elderly rely largely on social security provision that has been indexed for inflation since the 1970s and their other retirement and pension support has been less vulnerable to market economic swings than is earnings. This table uses the U.S. official poverty standard that counts as poor all persons whose total cash income from all family members falls below the standard amount set each year. Rates of poverty for children under age 18 fell in the 1960s and peaked again in the 1980s. It has been fairly stable ever since, at greater than 17% of these families. To add to this table, in 2007 child poverty rose again from 17.4 to 18.0%. Poverty among adults under age 65 fell most dramatically in the 1960s and has grown slightly since then, but always below rates for families with children. Poverty among elders was the highest of all groups before the 1960s and fell sharply in both the next two decades. It has continued to decline although more slowly ever since, and is lower than among other groups. The elderly rely largely on social security provision that has been indexed for inflation since the 1970s and their other retirement and pension support has been less vulnerable to market economic swings than is earnings.

7. After- Tax Income, Households with Children 1979 and 2003 This table documents the widening income disparities for households with children in the U.S. over three decades. The income distribution is broken into quintiles and the top richest one percent of these households is in the last column. The purple bar shows the after tax income for each quintile in 1979 (in 2003 dollars) and the burgundy bar shows their incomes in 2002. Below each set of bars in parentheses is the growth in average after-tax income for each group over the period. The bottom 1/5 of families had incomes rise only 7%, while second quintile families had increases of 14%. The middle quintile had incomes grow by 21%, the next group by 29.5%. The top 20% income group of children had incomes grow by 63.5%. The top 1% of families with children had average incomes rise by 145% over this period. Consequently the difference between the top and the bottom in 1979 (purple: 18.5K relative to 109, 9K) is much smaller than the differences between the burgundy bars in 2002 ( 19,8K relative to 179,7K). This table documents the widening income disparities for households with children in the U.S. over three decades. The income distribution is broken into quintiles and the top richest one percent of these households is in the last column. The purple bar shows the after tax income for each quintile in 1979 (in 2003 dollars) and the burgundy bar shows their incomes in 2002. Below each set of bars in parentheses is the growth in average after-tax income for each group over the period. The bottom 1/5 of families had incomes rise only 7%, while second quintile families had increases of 14%. The middle quintile had incomes grow by 21%, the next group by 29.5%. The top 20% income group of children had incomes grow by 63.5%. The top 1% of families with children had average incomes rise by 145% over this period. Consequently the difference between the top and the bottom in 1979 (purple: 18.5K relative to 109, 9K) is much smaller than the differences between the burgundy bars in 2002 ( 19,8K relative to 179,7K).

8. Poverty Rate for Related Children in Female- and Non-Female-Headed Households, 1959-2007 The next two slides show child poverty trends by family structure and race/ethnicity. This chart indicates the rates of poverty for children who live with a single mother versus the poverty rates for all other types of households with children. All other types include mostly two parent families, but also single father families, and living with other adults such as grandparents. Again, the steepest declines in single mother parent poverty (green bars) occurred in the 1960s and fell very little throughout the rest of the period. The decades of the 90s saw a decline of 9 percentage points but their poverty rate hovered at 42-43% throughout the last decade. These trends are the same but at much lower levels for all other households types. Note again child poverty rates increasing in the most recent period. The next two slides show child poverty trends by family structure and race/ethnicity. This chart indicates the rates of poverty for children who live with a single mother versus the poverty rates for all other types of households with children. All other types include mostly two parent families, but also single father families, and living with other adults such as grandparents. Again, the steepest declines in single mother parent poverty (green bars) occurred in the 1960s and fell very little throughout the rest of the period. The decades of the 90s saw a decline of 9 percentage points but their poverty rate hovered at 42-43% throughout the last decade. These trends are the same but at much lower levels for all other households types. Note again child poverty rates increasing in the most recent period.

9. Child Poverty, 1959-2005 The trends in this table for race and ethnic differences in child poverty begin at different times because our Census data did not collect comparable information on ethnicity before the 1970s. The line dating back to 1959 is for all households with children. While the time trends across all groups are similar, children of African American and Hispanic heritage have the highest poverty rates and there is very little convergence of these disparities over time. White children reached their highest poverty rate of almost 15% in the early 1980s, when close to half of African American children were poor. In the most recent period, 10% of white children and over a third of black children lived in poor families. Trends for Hispanics mirror poverty rates of African American children and while we see no covergence with other race and ethnic groups, we see positive declines in child poverty during the 90s until the late 90s-early 2000s, when Asian child poverty became similar to that of white children. The trends in this table for race and ethnic differences in child poverty begin at different times because our Census data did not collect comparable information on ethnicity before the 1970s. The line dating back to 1959 is for all households with children. While the time trends across all groups are similar, children of African American and Hispanic heritage have the highest poverty rates and there is very little convergence of these disparities over time. White children reached their highest poverty rate of almost 15% in the early 1980s, when close to half of African American children were poor. In the most recent period, 10% of white children and over a third of black children lived in poor families. Trends for Hispanics mirror poverty rates of African American children and while we see no covergence with other race and ethnic groups, we see positive declines in child poverty during the 90s until the late 90s-early 2000s, when Asian child poverty became similar to that of white children.

10. Figure 5. Relationship of Low Pay and child Poverty Rates in thirteen Industrialized Countries in 1990s Define Smeeding relative poverty rate – percentage of these families whose incomes fall at or below 40% of median income Define Smeeding relative poverty rate – percentage of these families whose incomes fall at or below 40% of median income

11. Spheres of Influences on Child Wellbeing Now I want to turn to conceptual models that look at the processes and mechanisms of how poverty disadvantages children. Much research in the U.S. on the effects of poverty for children posits a number of types of factors through which low levels of income can diminish the well being of children. Most broadly, I characterize this as a series of circles to help us think about the spheres most close to children’s lives (psychologists refer to this as proximal factors) and most distal or indirect types of factors that can create disadvantaging pathways. Now I want to turn to conceptual models that look at the processes and mechanisms of how poverty disadvantages children. Much research in the U.S. on the effects of poverty for children posits a number of types of factors through which low levels of income can diminish the well being of children. Most broadly, I characterize this as a series of circles to help us think about the spheres most close to children’s lives (psychologists refer to this as proximal factors) and most distal or indirect types of factors that can create disadvantaging pathways.

12. How Does Family Poverty/Low Income Affect Children? I now turn to two examples of this thinking – approaches that theorize and test the interaction and combination of both narrow and wide levels of context that can influence child well-being. First, Gershoff and colleagues developed this model that they have tested cross-sectionally using a large national data set. The demographic factors that can affect family income include race & ethnicity, marital status, education level of the parents, their work status, and the family size. They argue that material deprivation, not just the income level, can affect parent’s behavior, their stress, and the quality and amount of time and financial resources they can devote to their children. Material hardship in this study = lack of medical insurance; food insecurity/worries about having enough to eat; residential insecurity or instability, can’t pay their bills; Scales for parenting include parenting stress, conflict, warmth, whether parent stimulates reading and measures of use of physical punishment All of these parental factors then affect the child’s development in the cognitive and social-emotional domains. The child measures are ratings by teachers and by parents as well as age-appropriate tests for vocabulary and math. I now turn to two examples of this thinking – approaches that theorize and test the interaction and combination of both narrow and wide levels of context that can influence child well-being. First, Gershoff and colleagues developed this model that they have tested cross-sectionally using a large national data set. The demographic factors that can affect family income include race & ethnicity, marital status, education level of the parents, their work status, and the family size. They argue that material deprivation, not just the income level, can affect parent’s behavior, their stress, and the quality and amount of time and financial resources they can devote to their children. Material hardship in this study = lack of medical insurance; food insecurity/worries about having enough to eat; residential insecurity or instability, can’t pay their bills; Scales for parenting include parenting stress, conflict, warmth, whether parent stimulates reading and measures of use of physical punishment All of these parental factors then affect the child’s development in the cognitive and social-emotional domains. The child measures are ratings by teachers and by parents as well as age-appropriate tests for vocabulary and math.

13. Colleagues at a research and advocacy NGO in Washington DC, Child Trends, compiled this graph in 2004 to show the many ways that changes in income support programs like the welfare reform of public cash assistance can work its way to influencing children’s social, health, and academic outcomes. Their goal was to advocate for research that tested as many of these links as possible. They were making the case that the ultimate impact of welfare reform should be the well being of poor children. Increases in work and decreases uin welfare should be evaluated by their effects for child health, academic and emotional development. Colleagues at a research and advocacy NGO in Washington DC, Child Trends, compiled this graph in 2004 to show the many ways that changes in income support programs like the welfare reform of public cash assistance can work its way to influencing children’s social, health, and academic outcomes. Their goal was to advocate for research that tested as many of these links as possible. They were making the case that the ultimate impact of welfare reform should be the well being of poor children. Increases in work and decreases uin welfare should be evaluated by their effects for child health, academic and emotional development.

14. Figure 2. Percentage of Post-tax, post-transfer Income from Government Programs We can think of many types of interventions in policies (at the broadest and most outer sphere of influence on children) or programs that operate in their closer environments that might improve the lives and outcomes of poor children. I will illustrate here two types – first type are anti-poverty policies, policies that reduce poverty exposure of children or cut the chances that children will have incomes that fall below a certain level even if their parents’ earnings are low. Welfare reform and changes in other public transfer income support programs fall into this first category. And secondly, there are programs and policies that aim to break the links between exposure to poverty and disadvantage. Reducing the stress of the parents, the chances of the children being in poor health, the likelihood of receiving poor quality education, are examples of the second type. So we will look at information on what we do in the U.S. to help reduce the chances of having below poverty income. This slide, based on Current Population Survey calculations from my colleague Sheldon Danziger, and the next indicate that the U.S. does less than we could. In this slide we compare trends in the anti-poverty support the elderly receive with that going to families with children, especially single-mother families with children, the most likely to be poor. The trend in proportion of income provided by public sources for the elderly indicate that consistently, over half of the incomes of the elderly have come from government help. For single mother families, between 1979 and 2006, the proportion of gov’t support contributing to their incomes has fallen by half, from 25.4% to only 13%. We should examine this further to see why this has fallen and what can be done to reqch more of these families and increase what we do for them to alleviate their falling into poverty. We could think about whether to raise benefits, increase eligibility for them, do more outreach to encourage take up these programs, etc. We can think of many types of interventions in policies (at the broadest and most outer sphere of influence on children) or programs that operate in their closer environments that might improve the lives and outcomes of poor children. I will illustrate here two types – first type are anti-poverty policies, policies that reduce poverty exposure of children or cut the chances that children will have incomes that fall below a certain level even if their parents’ earnings are low. Welfare reform and changes in other public transfer income support programs fall into this first category. And secondly, there are programs and policies that aim to break the links between exposure to poverty and disadvantage. Reducing the stress of the parents, the chances of the children being in poor health, the likelihood of receiving poor quality education, are examples of the second type. So we will look at information on what we do in the U.S. to help reduce the chances of having below poverty income. This slide, based on Current Population Survey calculations from my colleague Sheldon Danziger, and the next indicate that the U.S. does less than we could. In this slide we compare trends in the anti-poverty support the elderly receive with that going to families with children, especially single-mother families with children, the most likely to be poor. The trend in proportion of income provided by public sources for the elderly indicate that consistently, over half of the incomes of the elderly have come from government help. For single mother families, between 1979 and 2006, the proportion of gov’t support contributing to their incomes has fallen by half, from 25.4% to only 13%. We should examine this further to see why this has fallen and what can be done to reqch more of these families and increase what we do for them to alleviate their falling into poverty. We could think about whether to raise benefits, increase eligibility for them, do more outreach to encourage take up these programs, etc.

15. Figure 6. Relationship of Cash Social Expenditures and child Poverty Rates in Sixteen Industrialized Countries in the 1990s Again, Tim Smeeding’s work on cross-national survey data is instrumental here in proving that increased support is associated with lower rates of exposure to poverty. This figure examines the relationship between the share of government expenditures on cash benefits and subsidies and the relative child poverty rate. Generally, the greater the share of supports provided, as a proportion of all spending, the lower the child poverty rate ( proportion of children with incomes at or below 40% of the median) in many industrialized countries. Clearly, gov’t support can reduce the # and proportion of children exposed to poverty & extreme financial hardship.Again, Tim Smeeding’s work on cross-national survey data is instrumental here in proving that increased support is associated with lower rates of exposure to poverty. This figure examines the relationship between the share of government expenditures on cash benefits and subsidies and the relative child poverty rate. Generally, the greater the share of supports provided, as a proportion of all spending, the lower the child poverty rate ( proportion of children with incomes at or below 40% of the median) in many industrialized countries. Clearly, gov’t support can reduce the # and proportion of children exposed to poverty & extreme financial hardship.

16. What are some examples of programs that “break the link” between being poor and having poor child outcomes? The next few slides highlight from recent research: greater supports to promote both work & meeting family needs promising interventions to promote poor children’s well being & development reforms of educational institutions What can we do for families that are poor? Here, I will highlight different types of promising interventions Help parents & families, most direct link to their children help enrich poor children’s early learning environments (their home and local preschool resources) Equalize opportunity for poor children; fix schools they attend (address institutional inequities)What can we do for families that are poor? Here, I will highlight different types of promising interventions Help parents & families, most direct link to their children help enrich poor children’s early learning environments (their home and local preschool resources) Equalize opportunity for poor children; fix schools they attend (address institutional inequities)

17. Support for Workers in One- & Two-Parent Families (Waldfogel) Access to affordable & high quality child-care and after school programs for older children Paid parental leave, funded by a payroll tax Additional paid leave for family illness or other family responsibility, employer-provided Right to request part-time or flexible hours Child Support Reform (increase pass-through to custodial parents) Jane Waldfogel has written about the supports we provide to help parents both work and provide quality childrearing. Based on the experience of programs researched in the U.S., she advocates for increases in the help working parents receive that would increase the time and money investments they can make for especially young children. We could expand what we do in each of these areas – child care subsidies and quality improvements in the services we offer for pre-school and after-school services Expand the Family Medical Leave Act Require employers to offer more support to parents And reform child support to encourage father involvement and financial supportJane Waldfogel has written about the supports we provide to help parents both work and provide quality childrearing. Based on the experience of programs researched in the U.S., she advocates for increases in the help working parents receive that would increase the time and money investments they can make for especially young children. We could expand what we do in each of these areas – child care subsidies and quality improvements in the services we offer for pre-school and after-school services Expand the Family Medical Leave Act Require employers to offer more support to parents And reform child support to encourage father involvement and financial support

18. PROMISING EARLY INTERVENTIONS Prenatal Care-home visits by nurses for mothers with low socioeconomic status Intensive pre-school for disadvantaged kids, modeled after such programs as: Perry Preschool—3 & 4 year olds; part day; lasted 2 years; weekly home visits Chicago Child Parent Center-1/2 day preschool for 3 & 4 year olds Abecedarian program—began at about 4 months; year-round, full-day; home visits We have had decades of experience in demonstrating early childhood enrichment interventions. The research highlights model high quality programs that increase the ability of poor children to fare better than those without access to such programs. These are but a few examples of the types of programs that have been successful and are highlighted in report after report. They typically target parenting skills, child enrichment, and preventive health care for the children. Outcomes include reductions in child abuse and neglect, improvements in parent’s employment, and positive long term academic and social outcomes for the children.We have had decades of experience in demonstrating early childhood enrichment interventions. The research highlights model high quality programs that increase the ability of poor children to fare better than those without access to such programs. These are but a few examples of the types of programs that have been successful and are highlighted in report after report. They typically target parenting skills, child enrichment, and preventive health care for the children. Outcomes include reductions in child abuse and neglect, improvements in parent’s employment, and positive long term academic and social outcomes for the children.

19. Raise Educational Attainment and Skills of Disadvantaged Children, the next generation of workers (Jacob & Ludwig, 2008) Expand early education programs for low-income 3- & 4-year olds (as in the previous slide) Better implementation of No Child Left Behind—common achievement standards across states; focus resources on most needy schools; expand accountability efforts Alternative certification to expand supply of teachers in disadvantaged school districts Expand magnet & charter schools to promote choice This slide illustrates the types of changes that research recommends for making institutional level change to address the disadvantages of poverty. In a forthcoming book, these authors advocate for reforms in the educational system that would decrease the link between low income neighborhoods and poor quality schools and child outcomes. Again, we have a great deal of information on how to target and promote educational competence of low income children. However, we do not as yet widely implement the successful approaches. Early childhood – as in the prior slide, expand access and availability of high quality preschool and day care NCLB – measure growth in disadvantaged children’s proficiency, not just overall levels; use national standard tests, not different ones for different states Increase pay for teachers in disadvatnaged schools and give bonuses to schools that use more successful instructional practices Magnet/charter – encourage wider public school choice and evaluate its effects for low income children in particular. This slide illustrates the types of changes that research recommends for making institutional level change to address the disadvantages of poverty. In a forthcoming book, these authors advocate for reforms in the educational system that would decrease the link between low income neighborhoods and poor quality schools and child outcomes. Again, we have a great deal of information on how to target and promote educational competence of low income children. However, we do not as yet widely implement the successful approaches. Early childhood – as in the prior slide, expand access and availability of high quality preschool and day care NCLB – measure growth in disadvantaged children’s proficiency, not just overall levels; use national standard tests, not different ones for different states Increase pay for teachers in disadvatnaged schools and give bonuses to schools that use more successful instructional practices Magnet/charter – encourage wider public school choice and evaluate its effects for low income children in particular.

20. Policy implications In the U.S., we know better than we do Academic and research information should have greater influence in policy decision making Increase the public’s and media’s trust in government to produce effective outcomes More funding of innovation, research & development for disadvantaged families Researchers across a wide variety of disciplines in the academic scholarly community in the U.S. are turning toward the study of policy and the effects of poverty on families and children. With this expansion has come a great knowledge base of successful programs and of methods of evaluation and analysis to continue to study these initiatives. But this information has found only weak and uneven influence on political and policy decision-making in recent years in particular. However, advocates for policies based on this kind of evidence call for increased funding for such programs and for continued research on their development and effectiveness. We need wider understanding of these issues in the public domain, in the general education of the population and in broader public media discussion. We need wider debate in the political arena to engage politicians and policymakers in raising awareness of the connections between policy and outcomes. We need to have wider cultural support for an optimism that government intervention can have positive impact in the lives of the poor. Clearly, this is a tall agenda for the new administration, but one that I think seems very consistent with the campaign platform of President-elect Obama. Thank you for this opportunity to share my analyses and to encourage us to think about new policy, program and research initiatives on child poverty. Researchers across a wide variety of disciplines in the academic scholarly community in the U.S. are turning toward the study of policy and the effects of poverty on families and children. With this expansion has come a great knowledge base of successful programs and of methods of evaluation and analysis to continue to study these initiatives. But this information has found only weak and uneven influence on political and policy decision-making in recent years in particular. However, advocates for policies based on this kind of evidence call for increased funding for such programs and for continued research on their development and effectiveness. We need wider understanding of these issues in the public domain, in the general education of the population and in broader public media discussion. We need wider debate in the political arena to engage politicians and policymakers in raising awareness of the connections between policy and outcomes. We need to have wider cultural support for an optimism that government intervention can have positive impact in the lives of the poor. Clearly, this is a tall agenda for the new administration, but one that I think seems very consistent with the campaign platform of President-elect Obama. Thank you for this opportunity to share my analyses and to encourage us to think about new policy, program and research initiatives on child poverty.

21. Further References Child Trends. http://www.childtrends.org/ Elizabeth Gershoff, J.L. Aber, C.C. Raver, & M.C. Lennon. (2007). Income is not enough: Incorporating material hardship into models of income associations with parenting and child development. Child Development, 78, 70-95. Brian Jacob & Jens Ludwig. 2008 forthcoming in M. Cancian & S. Danziger, eds. Changing Poverty. Lee Rainwater & Timothy Smeeding. 2003. Poor Kids in a Rich Country. Jane Waldfogel. 2006. What Children Need.

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