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Journal Issue: Children and Poverty Volume 7 Number 2 Summer/Fall 1997

Children and Poverty: Analysis and Recommendations
Eugene M. Lewit Donna L. Terman Richard E. Behrman

The Impact of Poverty on Children

It is not difficult to document that poor children suffer a disproportionate share of deprivation, hardship, and bad outcomes. (See Table 1 in the article by Brooks-Gunn and Duncan in this journal issue.) As Sophie Tucker once observed, “I have been poor and I have been rich. Rich is better.”13 Not only do poor children have access to fewer material goods than rich or middle-class children, but also they are more likely to experience poor health and to die during childhood. In school, they score lower on standardized tests and are more likely to be retained in grade and to drop out. Poor teens are more likely to have out-of-wedlock births and to experience violent crime. Finally, persistently poor children are more likely to end up as poor adults. Public concern for poor children has focused both on their material well-being and on the relationship between poverty and important child outcomes that the public values such as success in school. However, accurately measuring the effects of poverty on many important child outcomes is a challenge.

Despite the evidence that poor children experience undesirable outcomes across a wide variety of indicators, many studies lack the precision needed to disentangle the effects on children of the array of factors other than low income associated with poverty. For example, as has been discussed, poor families are more likely to be headed by a parent who is young, single, has low educational attainment, is unemployed, and has low earnings potential. These parental attributes, separately or in combination, may account for some of the observed negative consequences of poverty for children. In addition, at any point in time, the population of poor families is a mix of families who are temporarily poor and families who have experienced chronic hardship. Although the majority of poor families are only temporarily poor, the experiences of the persistently poor fit better the stereotype of an “underclass” trapped in concentrated poverty neighborhoods, beset by high crime rates, poor schools, substance abuse, and other social pathologies. Failure to take account of the differences in the duration of poverty children experience may lead to either an under- or overestimate of the effects of poverty on children. Understanding the relationships among income, other parental characteristics, community factors, and environmental hazards and child outcomes is key to designing effective policies to ameliorate the problems of poor children. Programs that alter family income may not have intended benefits for children if the importance of family income has been misconstrued.

Children need some minimum level of resources to survive, grow, and develop normally, but many Americans appear to discount the importance to child outcomes of above-subsistence levels of income.14 The recent welfare reform debate, for example, echoed some of these sentiments in the comment cited above by Office of Management and Budget Acting Director Lew to the effect that poor children would be better off if their parents worked rather than depending on public assistance, even if the withdrawal of welfare support led to a reduction in their material well-being. These sentiments also find some support in a recently published book, What Money Can't Buy: Family Income and Children's Life Chances, in which sociologist Susan Mayer concludes that increasing family income above the minimum required to meet children's basic material needs is not likely to correct the problems associated with child poverty and significantly improve a child's chances for success.15

In this journal issue, Jeanne Brooks-Gunn and Greg Duncan reach somewhat different conclusions based on a review of recent research on the effects of family income on a number of child outcomes. They review studies based on large longitudinal surveys that attempt to measure the effects of income on children independent of the effects of other conditions that might be related to growing up in a poor household.

In general, Brooks-Gunn and Duncan find that family income can substantially affect child and adolescent outcomes but that the negative effects of poverty are more pronounced for some outcomes than for others and vary depending on the depth and duration of a child's exposure to poverty. Income seems to be strongly related to children's physical health, cognitive ability, and school achievement in the early grades even after controlling for a number of other parental characteristics, and these effects of income are most pronounced for children who experience persistent and extreme poverty. Brooks-Gunn and Duncan also suggest that the timing of poverty is important: low income during the preschool and early school years is more predictive of low rates of high school completion than low income during later childhood and adolescence.

Brooks-Gunn and Duncan also report that much of the beneficial effect of family income on cognitive outcomes in young children is mediated by improvements in the home environment associated with higher income. Neighborhood characteristics and environmental hazards (such as lead exposure) are other pathways through which income may influence child outcomes. Identification of these pathways suggests alternative strategies to address some of the negative outcomes associated with child poverty.

In thinking about policies to address the problems of child poverty, it is useful to keep the areas of agreement in recent research in perspective. Almost no one believes that money and/or the material resources money can provide do not matter to children. Food, shelter, health care, and other necessities are crucial for children's well-being, and extra income can make life more enjoyable. The important question about which there is debate is whether the things that extra money, above a subsistence level of income, would buy make a big difference in child outcomes. The answer to this question is a qualified “yes.” The qualification reflects the facts that income seems to have a larger, more consistent independent effect on some outcomes (such as school achievement in the early grades) than others (such as teenage childbearing) and that the timing and persistence of poverty are important factors in the size of its impact. These issues are explored further in the ensuing discussion of policies for poor children, which includes recommendations for specific interventions.