The Economic Risk of Childhood in America: Estimating the Probability of Poverty across the Formative Years

Abstract

This article estimates the proportion of children in the United States who will experience poverty at some point during their childhood. These proportions are derived through a set of life tables built from 25 waves of longitudinal data. They represent a fundamentally different approach to studying poverty than either a cross-sectional or poverty spell methodology. Our data indicate that between the ages of I year and 17 years, 34% of American children will spend at least I year below the poverty line, 40% will experience poverty at the 125% level, and 18% will face extreme poverty (below 50% of the poverty line). A series of bivariate and multivariate life tables reveal that race, family structure, and parental education all have a sizeable impact on the likelihood of experiencing poverty. During the 17 years of childhood, 69% of Black children, 81% of children in nonmarried households, and 63% of children whose head of household had fewer than 12 years of education will be touched by poverty. Key Words. childhood, education, family structure, poverty, race. Over the past 25 years, one of the most apparent and disturbing aspects of American society has been its exceedingly high rate of poverty among children. From 1974 to the present, children have represented the age group most likely to be poor in the U.S. The 1997 poverty rate for persons younger than 18 years was 20%, compared with 11% for those aged 18-64, and 11% for those 65 and older (U.S. Bureau of the Census, 1998a). Not only are children at a greater risk of poverty, but they make up a significant bulk of the total number of poor people in the U.S. Of the 35.6 million individuals who fell below the poverty line in 1997, 14.1 million (or roughly 40%) were children. In addition, the U.S. leads the Western industrialized nations in having the highest incidence of child poverty (Rainwater & Smeeding, 1995). Using data from the Luxembourg Income Study, the U.S. rate in 1994 stood at 25%. The nearest countries were 6 and 9 percentage points lower (the United Kingdom and Australia), and the overall average was 10% (Smeeding, 1997). What is perhaps most alarming about these elevated rates is that a substantial body of research has revealed the deleterious effects of poverty on a child's development. Poor infants and young children are more likely to have lower levels of physical and mental growth, compared with their counterparts who are not poor (Duncan & Brooks-Gunn, 1997; Korenman & Miller, 1997; Smith, BrooksGunn, & Klebanov, 1997). As children grow older, the disadvantages of experiencing poverty can multiply (Lichter, 1997). These include attending inferior schools (Schiller, 1998), residing in less educationally stimulating home environments (Mayer, 1997), living in high-risk neighborhoods (BrooksGunn, Duncan, & Aber, 1997), having health needs left unattended (Sherman, 1994), and a host of other disadvantages. In short, the risk of poverty at any point for U.S. children is substantial and potentially harmful. Yet in spite of this body of research, an essential question remains unaddressed: What is the risk of poverty across the entire span of childhood? Although several studies have looked at the longitudinal dynamics of child poverty, none has calculated the age-specific and cumulative probabilities of experiencing poverty during the complete span of childhood. This article estimates the overall distribution, likelihood, and age that American children will experience a first spell of poverty during childhood. BACKGROUND With the advent of several national panel studies, including the Panel Study of Income Dynamics (PSID), the National Longitudinal Survey of Youth (NLSY), and the Survey of Income and Program Participation (SIPP), considerable light has been shed on understanding the longitudinal dynamics of spells of poverty. These data sets have allowed researchers to observe and track the individual dynamics of poverty and income mobility over time. …