Childhood Poverty Persistence: Facts and Consequences

Abstract

The U.S. child poverty rate has fluctuated between 15 and 23 percent for the past four decades, but far more children—37 percent—live in poverty at some point during their childhoods. Being poor at birth strongly predicts future poverty status. Using the PSID, this study finds that 49 percent of children who are poor at birth go on to spend at least half their childhoods living in poverty. In addition, children who are born into poverty and spend multiple years living in poor families have worse adult outcomes than their counterparts in higher-income families.

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Introduction

Child poverty rates have ranged between 15 percent and 23 percent over the past four decades.¹ These rates, however, do not reveal how long children live in poverty. Many families cycle into and out of poverty over time, while others remain poor many years. Persistent poverty among children is of particular concern, as the cumulative effect of being poor may lead to especially negative outcomes and limited opportunities.

Using Panel Study of Income Dynamics (PSID) data from 1968 through 2005, this brief examines children's poverty status from birth through age 17 and provides new information on persistent poverty among children. We examine the incidence and duration of poverty for all children together and separately by race, because poverty rates differ substantially for white and black children.² Then, we examine outcomes for the same children at ages 25 to 30 to measure the relationship between childhood poverty and adult outcomes. We answer five key research questions:

1. How many years do children spend living in poverty, and what proportion of children is persistently poor (i.e., spend at least half their childhoods living in poverty)?
2. How often do children move into and out of poverty during their childhood?
3. How many children who are poor at birth remain poor throughout their childhood?
4. How does poverty status at birth relate to adult outcomes such as poverty, educational attainment, premarital childbearing, and employment?
5. How does persistent childhood poverty relate to adult outcomes?

This study is the first to highlight the relationship between poverty status at birth and children's poverty persistence and subsequent adult outcomes. It builds on the substantial literature that examines childhood poverty and the link between childhood poverty and adult outcomes.³ By following children from birth through age 30, we capture the experiences and outcomes of people over critical periods in their lives. Understanding the link between poverty status at birth and future outcomes provides important practical program and policy implications. For example, if children who are poor at birth have worse outcomes, poverty status at birth could be used to direct resources toward children who are disproportionately more likely to have negative adolescent and adult outcomes.

Among our results:

• Sixty-three percent of children enter adulthood without experiencing poverty, but 10 percent of children are persistently poor, spending at least half their childhoods living in poverty.
• Black children are roughly 2.5 times more likely than white children to ever experience poverty and 7 times more likely to be persistently poor.
• Children who experience poverty tend to cycle into and out of poverty, and most persistently poor children spend intermittent years living above the poverty threshold.
• Being poor at birth is a strong predictor of future poverty status. Thirty-one percent of white children and 69 percent of black children who are poor at birth go on to spend at least half their childhoods living in poverty.
• Children who are born into poverty and spend multiple years living in poor families have worse adult outcomes than their counterparts in higher-income families.

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