Raising Children Out of Poverty
Many nations use government assistance and tax programs to raise children and families out of poverty. To see how much these transfers and taxes matter, compare the child poverty rates BEFORE and AFTER government benefits. Which countries end up with the lowest percentage of their children living in poverty? And which the highest?
In most rich nations a significant portion of children (ages 0–18) would live in poverty if their families didn’t receive any government benefits. (Note: there are several ways to measure child poverty; the Innocenti Report referenced above uses relative poverty, which it defines as living in a household whose disposable income is 50% or less of the median, a common standard.)
Most rich nations use public benefits—cash payments, child care subsidies, medical care, unemployment payments and other supports—to pull children out of poverty. You can see from the chart above that the United Kingdom cut their child poverty rate by almost 2/3 in 2010 using public benefits, from 33% to 12%. France cut its child poverty rate by more than half, from 19.5% to 8.8%. And Austria’s public assistance cut its child poverty rate from 17.5% to 7.3%.
There some glaring exceptions. The United States is one. Before transfers and programs, the child poverty rate in the U.S. is 25.2%. After, the rate drops, but barely, to 23%. Which means the percentage of children in the U.S. living in poverty is double and triple than in most rich nations.
Yet multiple studies show that boosting family income correlates with greater parental emotional well-being, better school attendance, reading scores and high school graduation rates, better health and even earnings as adults. Drug use decreases and so does the risk for teen pregnancy, abuse, neglect, and witnessing violence.
But the U.S. spends much less of its budget on poverty reduction than the other rich countries. The major federal programs are the Earned Income Tax Credit (EITC) and food stamps (SNAP). The federal minimum wage is lower in real dollars today (2015) than it was back in 1968.
Growing up in poverty poses huge challenges to success. The experience of other nations indicates we have the ability to cut child poverty by raising family incomes if we wanted to. Why don't we?
The United States is not entirely alone in having a high child poverty rate. The big difference is that most other nations use public benefits and supports to pull their youngest citizens out of poverty. The United States does relatively little.