Spotlight Exclusives

The Long-Term Consequences of Childhood Poverty

Caroline Ratcliffe, Urban Institute Caroline Ratcliffe, Urban Institute, posted on

Last week’s poverty figures show that 21.1 percent of children are poor, but even this does not capture the full extent of childhood poverty.

While one in five children currently lives in poverty, nearly twice as many children (39 percent) have been poor at some point before age 18. Black children fare much worse: fully three-quarters are poor sometime during childhood, compared with 30 percent of white children.

The burdens of poverty – instability, family stress, and unmet needs – can affect children’s future success, even for kids who are poor for only a short time.

Children who have been poor for at least one year before age 18 are less likely to reach important adult milestones, such as graduating from high school, enrolling in and completing college, and having consistent employment. For example, while only 78 percent of children who have been poor complete high school, 93 percent who have never been poor do so.

The deep divide between children fortunate enough to be born to parents with sufficient means and those born to parents under severe financial hardship is evident. And the enduring effects are striking.

Are there specific circumstances and factors that can either exacerbate the long-term consequences of childhood poverty or give children a better chance of escaping it? There are three important dimensions for children who grow up in poverty.

First, parents’ educational attainment is a key factor, as children tend to follow in their parents’ footsteps. Among children who have experienced poverty, those whose parents have more than a high school education are 30 percent more likely to complete high school and almost five times more likely to complete college than children whose parents did not complete high school.

Education and training programs, bundled with work supports such as child care subsidies, can further advance the financial stability of parents with limited education. Investments today can yield substantial returns a generation later.

Second, residential instability is another important factor. Among children who have experienced poverty, children who move three or more times for negative reasons – such as an eviction or the family’s need for lower rent – are 15 percent less likely to complete high school and 68 percent less likely to complete college than those who never moved.

Federal policy allows some vulnerable children (homeless and foster care children, for example) to remain in the same school when moving across school boundary lines. However, most low-income children are left out. More flexible policies on this front would provide greater stability for children and help them succeed in school.

Finally, place matters. Among children who have been poor, children in more advantaged neighborhoods (where poverty and unemployment rates are low) are 22 percent more likely to complete high school and roughly 15 times more likely to complete a four-year college degree than children in the most disadvantaged neighborhoods (where poverty rates top 50 percent and unemployment rates are upwards of 25 percent).

Place-conscious strategies that both address current neighborhood conditions and help poor families move out of disadvantaged neighborhoods to better neighborhoods with better schools and more opportunities are needed.

The United States is not the land of opportunity for many of our children. Millions of children are living in poverty, and millions more cycle into and out of poverty. And the resulting disadvantages are not isolated to these children and their families.

The country as a whole loses when these children do not reach their potential, and poverty and hardship ripple through to the next generation. In fact, the economic cost of child poverty is estimated to be roughly $500 billion a year when accounting for lost productivity, lower health, and crime. Instead of paying for these costs later, we should focus today on early investments that can help children achieve healthy, stable, and productive lives.

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Caroline Ratcliffe is a senior fellow at the Urban Institute and author of the brief “Childhood Poverty and Adult Success.” The views expressed are those of the author and should not be attributed to the Urban Institute, its trustees, or its funders.

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