The Enduring Effects of Childhood Poverty
By Indivar Dutta-Gupta
This is the first in a series of commentaries from CLASP experts that explore dimensions of poverty ahead of the U.S. Census Bureau’s annual release of poverty and income statistics from the previous year. On September 12, we’ll get a snapshot of the economic hardship children and families experienced in 2022. Ahead of the release, CLASP experts will offer key insights on the long-term effects of child poverty, promising policy solutions for ending child poverty, links between poverty and mental health, why it’s important to have a more accurate measurement of poverty, and what trends we expect to see in this year’s poverty data.
As I noted in my recent testimony to Congress on the history of bipartisan support behind the child tax credit, poverty is bad for children. Children experience poverty through hardships like hunger and inadequate nutrition, insufficient access to health care, unstable housing and homelessness, and the toxic stress experienced by their parents, whose struggle to survive without adequate supports hampers their ability to consistently care for and nurture their children. The impacts of childhood poverty are immediate and dire: impaired cognitive and emotional development, behavioral challenges, and a lack of school readiness.
But we must also consider the long-term consequences of childhood poverty. How will our society pay the price if policymakers fail to end it? Multiple studies show that children who grow up in poverty are more likely to experience poverty and health challenges as adults. They are also less likely to finish high school or college, limiting their earnings and employment opportunities. Nearly all the research relies upon a Panel Study of Income Dynamics (PSID), a longitudinal survey that started tracking different cohorts of children over multiple decades when it launched in 1968. Here are the facts:
The longer children live in poverty, the more likely they will experience poverty as adults
Researchers at the National Center for Children in Poverty analyzed PSID data from children born between the 1970s and 1990s and found that 35 percent of children experienced poverty at some point from birth to age 15. However, time spent in poverty varies significantly by race: nearly one-quarter of Black children—and just 3 percent of white children–spent more than three-quarters of their childhood in poverty.
The length of time spent in poverty translates into a greater likelihood of remaining in poverty as an adult, the researchers found. Children who spent 8 to 14 years in poverty were 5 times (45.3 percent) as likely to be in poverty at age 35 compared to children who spent less than 7 years in poverty, just 8.1 percent of whom were in poverty at 35.
Childhood poverty is associated with reduced educational attainment and economic prospects
A 2015 Urban Institute study found that only 77.9 percent of children who experienced poverty completed high school, compared to 92.7 percent of children who never experienced poverty. The study also confirms that the longer children spend in poverty, the less likely they are to achieve key milestones such as high school and college completion and to be consistently employed in their 20s. (In the next post, I’ll discuss empirical studies that demonstrate a causal link between income supports and children’s educational outcomes.)
The costs of doing nothing about childhood poverty reverberate from the individual child and her family to neighborhoods and communities and, finally, to the macroeconomy. A 2018 study estimates that child poverty costs the U.S. economy just over $1 trillion per year, or 5.4 percent of GDP. These costs come in the form of lost economic productivity and spending related to crime, health care, child welfare, and homelessness. Researchers estimate that for every dollar spent on reducing child poverty, the United States would gain back $7 in economic and social benefits.
Childhood poverty leads to worse mental and physical health in adulthood
Several studies illustrate how time spent in poverty during childhood results in adverse health outcomes in adulthood. One landmark study examined PSID data that tracked children until age 37 and found that those who experienced poverty in early childhood were twice as likely to report poor overall health and higher levels of psychological distress. They also had higher body mass index and were nearly 50 percent more likely to be overweight compared to adults who never experienced childhood poverty. Other research shows that childhood poverty is associated with higher rates of cardiovascular disease and diabetes as well as deficits in memory, chronic psychological distress, and feelings of helplessness.
The evidence is crystal clear: childhood poverty has long-lasting, devastating consequences, severely limiting human and national potential by holding back individuals and communities, in turn dragging down our economic strength and living standards. In our next post, I will explore the evidence behind policy solutions with a demonstrated track record of success that can end the injustice of child poverty for good.
