Policy for US Children in Low-Income Households

Policy for US Children in Low-Income Households

Policy for US Children in Low-Income Households

When it comes to public policy affecting children, two issues always arise.

One is that children don’t have a vote, while other groups like the elderly vote in large numbers. The other is that when we start talking about the situation of children, the discussion often slides over to the effects on the parents of children–for example, incentives for the adults to work or marry or to have additional children. Concerns about incentives for parents are of course legitimate–but the situation of the children themselves matters, too.

A bipartisan group of academics under the moniker of the AEI-Brookings Working Group on Childhood in the United States has produced a report on “Rebalancing: Children First” (February 2022). Although there’s a chapter at the end about teenagers, the main focus of the report is on children under 12. Overall, here’s the philosophy:

The working group proposes, in short, rewriting the generational contract. In 2019, the share of the federal budget spent on children was 9.2 percent and the share spent on the adult portions of Social Security, Medicare, and Medicaid was 45 percent. … This allocation is a statement of national priorities—priorities that the working group agrees need to change.

The underlying issues have been the same for some decades now. About one child in seven in the United States lives in a household that’s below the poverty line. The share of US children being raised in a household with two parents present has been falling over time, and the report reviews a considerable body of evidence that children who grow up in stable two-parent households have (on average, and with exceptions of course) better educational and health incomes over time.

Children_12_and_Under.jpg

We know that children growing up in low-income households have (on average, and of course with exceptions) worse outcomes on a variety of measures: education, health, crime, and others. Here’s one of many measures, using eligibility of a child for a free or reduced-price school lunch as a measure of poverty, here are the shares of those scoring above proficient in reading and math in 4th grade. Again, I recognize that some children make great leaps after 4th grade. But if only one-quarter or one-fifth of a group is proficient in fourth grade, that group is going to have a harder time moving forward.

4th_Grade_Students.jpg

What’s perhaps most interesting to me in the report is the accumulation of research evidence no how programs benefit children. For example, the Earned Income Tax Credit is a federal program that gives a “refundable tax credit” to working low-income families.

The EITC also has a large antipoverty impact, having raised 5.6 million people, including about 3 million children, out of poverty in 2018. The EITC has been expanded several times since it was introduced in 1975, and researchers have been able to study the impact of these expansions to estimate its impact. Because the EITC is available only to families with positive earned income, it leads to increases in employment, which further raises family incomes (Hoynes and Patel 2018; Schanzenbach and Strain 2020). Studies of the EITC therefore measure the combined effects of both increased income as well as changes in parental employment—likely positive to the extent that employment brings additional income to the family, but potentially negative to the extent that children attend a low-quality childcare program or receive a smaller investment of time from their parents. The EITC has been shown to improve a wide range of children’s outcomes. Infant health is improved—both increasing average birth weight (Baker 2008; Strully, Rehkopf, and Xuan 2010) and decreasing the share of low-birth-weight newborns (less than 5.5 pounds) (Hoynes, Miller, and Simon 2015). The EITC also improves educational outcomes, from test scores to high school graduation and college enrollment (Bastian and Michelmore 2018; Chetty, Friedman, and Rockoff 2011; Dahl and Lochner 2012, 2017).

Another example is the “food stamps” program, which some years ago was rechristened as Supplemental Nutrition Assistance Program (SNAP):

SNAP provides food vouchers to low-income families to use at the grocery store and reaches a large number of families. In 2019 10.9 percent of the population participated in SNAP, with average monthly benefits of $258 per household, or about $130 per person. SNAP is estimated to have lifted 3.3 million children out of poverty in 2016. Unlike the EITC, SNAP is not conditioned on work. Access to SNAP has also been shown to improve infants’ health at birth, increasing birth weights and reducing the incidence of low-birth-weight newborns (Almond, Hoynes, and Schanzenbach 2011; East 2018). SNAP availability for children under age 5 has also been shown to improve their parent-reported health in adolescence, potentially through reduced school absences, doctor visits, and hospitalizations (East 2020). Furthermore, children with access to SNAP had better health in adulthood, as measured by lower obesity rates, healthier body mass index, and fewer chronic conditions, such as diabetes and high blood pressure. Similarly, access to SNAP during childhood improves later education and economic outcomes, such as increasing high school graduation rates by 18 percentage points. SNAP during childhood also leads to improved outcomes for women, including higher earnings, higher family income, better educational attainment, and increased rates of employment (Hoynes, Schanzenbach, and Almond 2016).

Here’s another example of a program with targeted support for food for households with pregnant and postpartum women:

Another nutrition assistance program, the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), provides targeted support for pregnant and postpartum women and for those with young children to purchase certain food items. WIC has been shown to increase birth weight for infants born to mothers who receive WIC benefits (Hoynes, Page, and Stevens 2011; Rossin-Slater 2013). Prenatal WIC participation also leads to reductions in subsequent diagnoses for attention-deficit/hyperactivity disorder (ADHD) and other childhood mental health conditions and reduces the chances of a child repeating a grade in school (Chorniy, Currie, and Sonchak 2019).

The programs that I have mentioned here aren’t perfect; for example, these programs could often be redesigned so that mothers in low-income households don’t have a disincentive to marry because it would lead to a cutoff of benefits. There are also not the only programs relevant to children. For example, it remains an important goal to get pregnant women from low-income households into prenatal care and then into early-infant care and parental support programs. Steps that improve jobs and wages for low-income households, or that improve schools and neighborhoods in low-income communities, will help children who live there, too.

My main point here is that there can be a tendency to think of the EITC as just a program that provides work incentives and additional income, or to think of SNAP as just a program that helps the poor buy food. Thinking about anti-poverty programs mainly in terms of their effect in bringing down the poverty rate isn’t wrong, but it is limited. It ignores perhaps the most important benefit of these programs, which is their demonstrated ability to provide long-term benefits to the health and education of children from low-income families, which in turn have long-lasting consequences for the future of these children as workers and citizens.

A lot of the policy steps taken during the pandemic were about replacing household income or keeping businesses afloat. However, children from low-income families have been disproportionately affected by pandemic, including in particular the effects of the K-12 schooling going online during the pandemic. A pro-child policy agenda was overdue before the pandemic, and that was before a situation where many children have spent two years of being hindered in their normal social and educational development.

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Timothy Taylor

Global Economy Expert

Timothy Taylor is an American economist. He is managing editor of the Journal of Economic Perspectives, a quarterly academic journal produced at Macalester College and published by the American Economic Association. Taylor received his Bachelor of Arts degree from Haverford College and a master's degree in economics from Stanford University. At Stanford, he was winner of the award for excellent teaching in a large class (more than 30 students) given by the Associated Students of Stanford University. At Minnesota, he was named a Distinguished Lecturer by the Department of Economics and voted Teacher of the Year by the master's degree students at the Hubert H. Humphrey Institute of Public Affairs. Taylor has been a guest speaker for groups of teachers of high school economics, visiting diplomats from eastern Europe, talk-radio shows, and community groups. From 1989 to 1997, Professor Taylor wrote an economics opinion column for the San Jose Mercury-News. He has published multiple lectures on economics through The Teaching Company. With Rudolph Penner and Isabel Sawhill, he is co-author of Updating America's Social Contract (2000), whose first chapter provided an early radical centrist perspective, "An Agenda for the Radical Middle". Taylor is also the author of The Instant Economist: Everything You Need to Know About How the Economy Works, published by the Penguin Group in 2012. The fourth edition of Taylor's Principles of Economics textbook was published by Textbook Media in 2017.

   
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