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Why has child poverty in U.S. fallen dramatically in 25 years?

Experts don’t all agree on what drove the drop in child poverty — or how to keep the rate falling

SHARE Why has child poverty in U.S. fallen dramatically in 25 years?

Alex Cochran, Deseret News

In 1993, about 1 in 4 kids in the United States were experiencing poverty. By 2019, the number had fallen by nearly 60% to 1 in 10 kids, according to a new Child Trends report, “Lessons from a Historic Decline in Child Poverty,” released this week.

“What we found was a remarkable success story,” said Dana Thomson, a research scientist who co-wrote the report with Renee Ryberg. Thomson told the Deseret News that the positive change resulted from a combination of a stronger social safety net and a healthy economy. 

The study shows that the child poverty rate had been falling even before federal officials blunted the hardships of the pandemic with unprecedented financial aid for families.

Experts disagree on what particular policies and programs were effective at reducing child poverty and also have different ideas about what remains to be done. But they all agree that getting children out of poverty is good for both the children and for society at large. While the future upward mobility and mental and physical well-being of children improve when poverty is left behind, society reaps big rewards from a healthier economy, lower health care costs and reduced crime, among other benefits.

As the report puts it, “The healthy development of our children — our nation’s future workers, leaders, taxpayers, parents and neighbors — is critical for a thriving nation.”

But while Child Trends points to a robust safety net and good economic times, “work” is the answer if you ask Angela Rachidi, a poverty expert at the American Enterprise Institute about what’s worked. She calls the decline in child poverty “very old news” that can be traced back to antipoverty policies that linked parents earning an income to a family’s eligibility to receive benefits from public programs.

The Child Trends report examined what happened to children over time prior to the pandemic, ending its analysis with 2019, before stimulus payments were sent out and the child tax credit was expanded. The researchers didn’t want the various types of COVID-19 assistance offered to families to skew the trend, Thomson said.

Child poverty fell even more during the pandemic because of COVID-19 relief, reaching its lowest recorded rate, according to a report from the U.S. Census Bureau this week that lauded the impact of COVID-related financial assistance on family resources, including the expanded child tax credit. A number of organizations point to the temporary reform, which increased the amount a family received and paid half of it monthly for several months in 2021, as central to getting kids out of poverty.

Tracking the trend

The Child Trends report showed lot of good news for low-income families. Between 1993 and 2019, the report found:

  • Less unemployment, more single mothers working and higher minimum wages, a combination the report said explained about a third of the decline in child poverty.
  • The share of kids in “deep” poverty was made better by demographic shifts and fewer teen births, though those didn’t impact child poverty overall.
  • The social safety net cut poverty by 44% in 2019, compared to cutting it by just 9% in 1993. Thomson and her co-authors said the earned income tax credit, Social Security and the Supplemental Nutrition Assistance Program (commonly called SNAP) helped low-income families the most when it came to protecting kids from poverty.
  • But impacts were uneven. The social safety net didn’t do as much for children in immigrant families, Asian/Hawaiian/Pacific Islander children, Hispanic children and children whose parents are not stably employed. But many did still benefit.

Diminishing poverty

“One of the interesting things that we found was that poverty declined for nearly all subgroups of children that we examined: children in immigrant families and children in nonimmigrant families, across all races and ethnicities and across different family types. However, because poverty declined at fairly similar rates among all of these groups, the disparities between these groups have been persistent,” Thomson said.

That meant that Black and Hispanic children — “kids who face occupational segregation and discrimination, for example” — are still three times as likely to experience poverty as their peers, underscoring the need for solutions that address those barriers, Thomson said.

She noted that the earned income tax credit is “particularly important because it helps make work work for families by boosting wages that are otherwise too low to support a family.”

She added, “But then we also have a host of other programs, many of which are not conditional on work. So programs like unemployment insurance, and the Supplemental Nutrition Assistance Program, are programs that naturally expand during recessions and are critical for when families face temporary setbacks or long-term work instability.”

Employment comes up often in discussing how to end child poverty.

“The trends in child poverty over the past two decades show that a work approach to government assistance has been effective,” Rachidi told the Deseret News by email. “This is why the push for an unconditional child allowance is so concerning. It would take us backward after making so much progress. The most effective antipoverty measures have been those that start with an expectation of work, such as the (earned income tax credit) and child tax credit,” she wrote.

Even SNAP, which doesn’t have a work requirement, “expects work because you cannot survive on SNAP alone,” Rachidi said.

She noted that her own earlier research, published as the “2019 Reducing Child Poverty Report,” showed that “the decline in two-parent family structure is the single-biggest factor associated with the increase in child (official) poverty between the mid-1970s and the early 1990s. However, child poverty has fallen since the early 1990s despite continuing increases in single parenthood. This most recent decline in child poverty is most strongly associated with increases in maternal employment.”

In terms of reducing child poverty, the most effective tools contained in welfare-reform efforts were the earned income tax credit and SNAP, according to Rachidi. “Welfare reform ended unconditional cash payments by requiring work. Welfare reform increased employment, which allowed single mothers to benefit from earnings and the EITC, which is only available to working people. Add SNAP to that and the resulting income substantially reduced child poverty,” she told the Deseret News.

In the pandemic

Another study this week hailed gains in the effort to raise children out of poverty that were made during the pandemic, as benefits provided to struggling families accelerated.

The Census Bureau just reported that the child tax credit expansions and stimulus payments cut child poverty in half, though income inequality grew. The bureau said the richest 10% of households had income 13.5 times higher than the poorest 10% of households.

As researchers from the University of Michigan writing in Vox described it, “While the traditional safety net targets poor families and relies heavily on in-kind benefits rather than money, the pandemic safety net was largely cash-based, unrestricted and nearly universal.”

Both the Child Trends and the Census Bureau reports used the supplemental poverty measure, rather than the official poverty measure, which is set by comparing pre-tax cash income against a line set at three times the cost of a very basic food diet in 1963, then adjusted for family size. The supplemental measure considers regional cost-of-living data and the cash value of benefits to get what many experts consider a better look at a family’s resources.

The census report said that “child poverty rates fell 46% in 2021, from 9.7% in 2020 to 5.2% in 2021, a 4.5 percentage-point decline.” The report called it the lowest child poverty rate on record and noted that child poverty declined for non-Hispanic white (2.7%), Black (8.1%) and Hispanic (8.4%) children that year, although there was not a statistical difference for Asian children.

They added: “An analysis from the Center on Budget and Policy Priorities found that, absent government intervention, poverty in 2020 would have experienced its second-largest increase on record, but as a result of the pandemic safety net, poverty in the U.S. experienced the largest single-year decline in more than 50 years.”

A number of groups, including the Economic Security Project and Humanity Forward, believe that much of the credit for reducing child poverty in the pandemic belongs to the expanded child tax credit, which was temporarily made refundable — meaning people who didn’t have earnings could still get the credit. It was also sent to eligible households as a monthly payment for the second half of 2021, instead of only being available as a lump sum at tax time. So families were able to use it during that six months to manage ongoing expenses.

“The child tax credit lifted 3.7 million children nationwide from poverty and dramatically slashed hunger rates for Black and Hispanic children,” Adam Ruben of the Economic Security Project said in a press release about the census data. “Research consistently indicates that programs like this can revitalize rural communities and empower individuals to pursue meaningful work.“

He added that “there should be no more corporate tax breaks unless there is support for families, too, through the CTC and EITC.”

A sustainable trend?

Despite the gains, Thomson said people should be mindful of the 1 in 10 children who are still living in poverty. “Our nation’s work is really far from over. We think that to continue this progress, we need to assure that work is a viable option for families to support their children.”

Besides analyzing the downward trend of child poverty, the Child Trends report offers recommendations designed to sustain the trend. Among other things, the researchers suggest reworking safety net program eligibility requirements “to prioritize child needs and determine eligibility based on that, instead of parent characteristics.”

They also highlight the importance of supporting stable parental employment — for example, so single moms can work — through family- and caregiver-friendly policies like affordable child care and livable wages. And they call on policymakers to help keep teen births low.