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August 30, 2006

Understanding Recent Changes in Child Poverty

Prior research identifies three groups of factors, all of which may be influenced by public policy, that account for fluctuations in child poverty: (1) changes in federal and state economies; (2) changes in family characteristics, such as size and composition; and (3) changes in the behavior of parents, such as their work effort. For example, Blank and Blinder (1986) find that, historically, changes in such economic factors as unemployment rates can explain changes in the overall poverty rate well. Lerman (1996) finds that the increased share of families headed by single parents can explain changes in the child poverty rate between 1971 and 1989. Hoynes, Page, and Stevens (2006) find that increases in female labor supply and female-headed households had offsetting effects on the overall poverty rate. This brief shows that economic conditions, together with parental education and work, are the dominant factors behind recent changes in child poverty. Changes in the share of families headed by single parents seem to have played almost no role in the recent changes in child poverty. According to the analysis, the 1993 to 2000 drop in child poverty is largely due to improvements in the job market, especially for less-educated workers. The economic downturn beginning in 2000 hit all families, even those with more education, but the families of black children were hit hardest.

Posted by Gary Holden at August 30, 2006 10:34 PM