Chronic versus transient child poverty in the United States

Child poverty is widely recognized as a problem of significant proportions in the United States. Compared to other industrialized nations, the U.S. stands out for the large number of children living in poverty. In fact, a... [ view full abstract ]

Child poverty is widely recognized as a problem of significant proportions in the United States. Compared to other industrialized nations, the U.S. stands out for the large number of children living in poverty. In fact, a recent UNICEF report showed the U.S. had the second-highest rate of relative child poverty among 35 economically developed nations. Poverty in the U.S. is often examined from the perspective of a single year, with families categorized as poor by comparing annual income to an annual poverty threshold amount. Indeed, the official government method for measuring poverty in the United States follows this cross-sectional approach, comparing annual household cash income to an annual poverty threshold that varies by family size and composition. Individuals are thus considered poor if their family’s annual cash income is below the threshold designated for their family type.
While these data provide a snapshot of child poverty in the U.S., they do not capture information about whether children were poor for one year only, or poor across multiple years. ‘Assessing child poverty using a cross-sectional approach ignores the time dimension of poverty. Yet theory suggests, and empirical research shows, that the persistence of poverty is relevant to understanding the demographics of the poor population and the impact of poverty on life outcomes, particularly for children. Long-term or chronic poverty has different causes and impacts compared to short-term or transient poverty, with implications for prioritizing policy and program interventions.
This paper draws upon an analysis of data from the Panel Study of Income Dynamics (PSID), a longitudinal survey that follows a national sample of U.S. households, surveyed biennially to collect detailed income and demographic information. Using publicly available PSID data, we examine chronic and transient child poverty rates for the 11-year period from 1998 to 2008, a timeframe representative of the contemporary welfare policy context in the United States (spanning the period from the initial implementation of welfare reform to the start of the Great Recession). While prior research on child poverty persistence in the U.S. focused only on African American and white children, we use an expanded PSID sample that includes a nationally representative sample of immigrants, allowing us to examine poverty persistence for Hispanic and other race children as well as African American and white children. Similar to previous findings, our analysis shows that during this period, chronic child poverty in the United States was much less common than transient child poverty, and the two types of poverty had somewhat different demographics.
We review the findings of the study and offer suggestions for policy approaches that distinguish between transient and chronic poverty. We emphasize the opportunity afforded by targeting chronic child poverty, in particular.