Child Poverty Can Be Reduced

Abstract

Child poverty can be reduced by policies that help families earn more and supplement earned income with other sources of cash. A comprehensive antipoverty strategy could use a combination of these approaches. This article reviews recent U.S. experience with these broad approaches to reducing child poverty and discusses lessons from abroad for U.S. policymakers. The evidence reviewed suggests that, although policies to increase earned incomes among low-wage workers can help, these earnings gains will not be sufficient to reduce child poverty substantially. Government income support programs, tax policy, and child support payments from absent parents can be used to supplement earned incomes of poor families with children. Until recently, Aid to Families with Dependent Children (AFDC) was the main government assistance program for low-income families with children. Temporary Assistance for Needy Families (TANF) has recently replaced AFDC. This article explains why TANF benefits are likely to be less than AFDC benefits. The article also examines the effects of Social Security and Supplemental Security Income on child poverty. The most encouraging recent development in antipoverty policy has been the decline in the federal tax burden on poor families, primarily as a result of the expansion of the Earned Income Tax Credit (EITC), now the largest cash assistance program for families with children. In 1995, government transfer programs (including the value of cash, food, housing, medical care, and taxes) decreased child poverty by 38% (from 24.2% to 14.2% of children under 18). Child poverty may also be reduced by policies that increase contributions from absent single parents to support their children. Overall, evidence from the United States and other developed countries suggests that a variety of approaches to reducing child poverty are feasible. Implementation of effective programs will depend, however, on the nation's political willingness to devote more resources to this end.