No. A-71 in Series, "New Federalism: Issues and Options for States"
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Over the past 10 years, U.S. child poverty rates took two sharp turns: a major reduction
from 1993 to 2000 followed by a slight hike from 2000 to 2004. Both shifts have been even more dramatic for black and Hispanic children. Such abrupt shifts offer an unusual opportunity to tease out what factors contribute to changes in child poverty. Exploring the driving forces behind trends in child poverty offers insights on policy, as well as on the well-being of children, since child poverty is associated with many negative outcomes in later life—low earnings, reduced educational attainment, teenage childbearing, and physical and mental health problems.1
Prior research identifies three groups of factors, all of which may be influenced by public policy, that account for fluctuations in child poverty: (1) changes in federal and state economies; (2) changes in family characteristics, such as size and composition; and (3) changes in the behavior of parents, such as their work effort. For example, Blank and Blinder (1986) find that, historically, changes in such economic factors as unemployment rates can explain changes in the overall poverty rate well. Lerman (1996) finds that the increased share of families headed by single parents can explain changes in the child poverty rate between 1971 and 1989. Hoynes, Page,
and Stevens (2006) find that increases in female labor supply and female-headed households had offsetting effects on the overall poverty rate.
This brief shows that economic conditions, together with parental education and work, are the dominant factors behind recent changes in child poverty. Changes in the share of families headed by single parents seem to have played almost no role in the recent changes in child poverty. According
to the analysis, the 1993 to 2000 drop in child poverty is largely due to improvements in the job market, especially for less-educated workers. The economic downturn beginning in 2000 hit all families, even those with more education, but the families of black children were hit
hardest.
Notes from this section of the report.
1. As documented by Duncan et al. (1998).
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