Children in Poverty: Profile, Trends, and Issues

Children in Poverty:
Profile, Trends, and Issues
Updated November 25, 2008
Vee Burke, Thomas Gabe, and Gene Falk
Domestic Social Policy Division



Children in Poverty:
Profile, Trends, and Issues
Summary
Child poverty persists as a social and economic concern in the United States.
In 2007 12.8 million children (17.6% all children) were considered poor under the
official U.S. definition. In records dating back to 1959, the incidence of poverty
among related children in families has ranged from a peak of 26.9% in 1959 to a low
of 13.8% in 1969. Poverty affects a child’s life chances; by almost any indicator,
poor children fare worse than their nonpoor counterparts.
Family living arrangements, indicated by the presence of just one or both
parents, greatly affect the chances that a child is poor. In 2007, 43.0% of children in
female-headed families were poor, compared to 8.5% of children in married-couple
families. In that year, 24% of children were living in female-headed families, more
than double the share who lived in such families when the overall child poverty rate
was at its historical low (1969). Children who are racial or ethnic minorities are at
particular risk of being poor. In 2007, a little more than one-third of black children
(34.2%) and almost three out of ten Hispanic children (28.3%) were poor, compared
to about one in ten white non-Hispanic children (9.7%).
Work is the principal means by which families with children support
themselves. Without family earnings, a child is almost certain to be poor. However,
earnings often fail to overcome poverty. In 2007, about one-third (32.4%) of all poor
children lived with at least one adult who was a full-time, full-year worker; another
one-third were in families with a worker who either worked part-year or (less likely)
part-time; another third lived in families without an adult who worked during the
year. Higher child poverty rates were observed for those whose parents had less,
rather than more, education. Children of younger parents, with less potential time
and experience in the workforce, were more likely to be poor than children of older
parents. Additionally, dramatic gains have occurred in recent years in work by lone
mothers — especially among those with preschool children. Employment rates of
single mothers with children under age 3 rose from 35.1% in March 1993 to 59.1%
in March 2000, but have since remained below their 2000 level, standing at 54.5%
in March 2008. Nonetheless, many of these working single mothers (and their
children) remained poor.
The social safety net for children consists of (1) earnings-based social insurance
programs and (2) need-based transfers of cash and noncash benefits. Need-tested
benefits have undergone a radical transformation during the past 20 years, capped by
the 1996 welfare reform law. Cash welfare caseloads have plummeted since the
reforms of the mid-1990s, so that many families receiving need-tested aid only
receive noncash benefits (e.g., Medicaid and food stamps) whose value is not
reflected in official poverty statistics. Further, the welfare reforms of the mid-1990s
were accompanied by expansions of the Earned Income Tax Credit (EITC), which
supplements the earnings of low-income families with children. (The value of the
EITC is also not considered in official poverty statistics.) The result has been to
curtail benefit availability for nonworking families while raising the returns to work.
This report will be updated annually, when new Census Bureau data are released.



Contents
In troduction ......................................................1
Child Poverty in 2007..............................................3
Child Poverty by Family Type....................................4
Child Poverty by Race and Ethnicity...............................6
Child Poverty by Annual Work Experience of the Family Head or Spouse
........................................................9
Child Poverty by Educational Credential of the Family Head or Spouse..11
Child Poverty by the Age of the Head or Spouse....................13
Child Poverty by Immigrant Status of the Family Head or Spouse.......14
Trends in Child Poverty............................................15
Trends in Child Poverty Rates, by Type of Family...................16
Trends in the Number and Composition of Poor Children.............17
Rise in Work by Lone Mothers..................................20
How Many Single Mothers Are Poor Despite Working?..............22
Government “Safety Net” Policy.....................................24
Social Security...............................................25
Unemployment Insurance......................................25
Cash Public Assistance for Children..............................26
Money Income Poverty Rates of Children, by Income Source..............28
Conclusion ......................................................30
Appendix A: Support Tables to Selected Figures in This Report............32
List of Figures
Figure 1. Poverty Rates of Children, the Aged, and Nonaged Adults, 2007....4
Figure 2. Poverty Among Related Children, By Family Type, 2007..........5
Figure 3. Poverty Among Related Children in Female-Headed Families,
by Marital Status of the Female Head, 2007.........................6
Figure 4. Poverty Rates Among Related Children, By Race and Ethnicity, 20077
Figure 5. Poverty Among Related Children in Female-Headed Families,
By Race and Ethnicity, 2007.....................................8
Figure 6. Poverty Rates Among Related Children in Married Couple Families,
By Race and Ethnicity, 2007.....................................9
Figure 7. Poverty Among Related Children, By the Work Experience of the
Family Head or Spouse, 2007...................................10
Figure 8. Poverty Among Related Children in Female-Headed Families,
by Work Experience of the Female Head, 2007.....................11
Figure 9. Poverty Among Related Children, by the Educational Attainment
of the Family Head or Spouse, 2007..............................12
Figure 10. Poverty Among Related Children in Female-Headed Families,



Figure 11. Poverty Among Related Children, by Age of the Family Head
or Spouse, 2007..............................................14
Figure 12. Poverty Rates Among Related Children, By Immigrant Status
of the Family Head and Spouse, 2007.............................15
Figure 13. Poverty Rates for Related Children, 1959-2007................16
Figure 14. Child Poverty Rates by Family Type, 1959-2007...............17
Figure 15. Number of Poor Related Children, By Family Type, 1959-2007...18
Figure 16. Child Poverty Rates: Historic Rates and Adjusted Rates,
Holding Family Composition at 1960 Levels.......................20
Figure 17. Employment Rates of Married and Single Mothers,
by Age of Youngest Child, March 1988 to March 2007...............21
Figure 18.Annual Hours Worked by Poor Mothers in Mother-Only
Families at Various Percentile Rankings of Hours Worked, 1987 to 2007.22
Figure 19. Poverty Rates for All Related Children, 2007, by Source of Income29
Figure 20. Poverty Rates for Related Children in Single Parent Families, 2007,
by Source of Income..........................................29
List of Tables
Table 1. Percent of Related Children in Families Below the Poverty Threshold
with at Least One Full-Time, Year-Round Worker, 1987-2007.........23
Table A1. Poverty Rates and Number of Poor Children, by Family Type,
1959-2007 ..................................................32
Table A2. Employment Rates of Single Mothers and Married Mothers,
by Age of Youngest Child, March 1988 to March 2008...............33
Table A3. Annual Hours Worked by Poor Mothers in Mother-Only
Families at Various Percentile Rankings, 1987 to 2007 ...............34



Children in Poverty:
Profile, Trends, and Issues
Introduction
Child poverty persists as a social and economic concern in the United States.
In 2007,12.8 million children were considered poor under the official U.S. Census
Bureau definition. The child poverty rate (the percent of all children considered
poor) stood at 17.6% — well below the most recent high of 22% in 1993, but still
well above its historic low of 13.8% in 1969. In 2007, 1.8 million more children
were counted as poor than in 2000, when 15.6% of children were poor.
Child poverty reflects both family circumstances in which children reside and
economic conditions and opportunities in communities where children live. Family
living arrangements, indicated by the presence of just one or both parents, greatly
affect the chances that a child is poor. Children who are racial or ethnic minorities
are at particular risk of being poor.
To avoid poverty, most children need an adult breadwinner. The economic
well-being of children usually depends on how well their parent(s) fares in the labor
market. Children most at risk of poverty are in families without an earner. However,
some are poor despite the work — even the full-time work — of a parent. They are
among the working poor.
Poverty affects children’s life chances, their prospects of realizing their full1
potential, and their ability to successfully transition into adulthood. By almost any
indicator, poor children fare worse than their nonpoor counterparts. Poor children
are at greater risk of poor physical health, delayed cognitive development, poor
academic achievement, and risky behavior (particularly among children growing up
in poor neighborhoods). Poor adolescent girls are more likely to become teenage
mothers than their nonpoor counterparts, contributing to a cycle of poverty from one
generation to the next.
While income poverty is associated with poor child outcomes, lack of income
may account for only part of the reason why poor children face poor future prospects.
Other factors are arguably as important, if not more so, than income, per se, in


1 For an overview of research on the consequences of poverty for children, see Duncan, Greg
J. and Jeanne Brooks-Gunn ed. Consequences of Growing Up Poor. Russell Sage
Foundation, 1997. Also, for an overview of the effects of poverty on health and social status
and economic growth, see: U.S. Government Accountability Office. Poverty In America:
Economic Research Shows Adverse Impacts on Health Status and Other Social Conditions
as well as the Economic Growth Rate, GAO-07-344, January 2007.

affecting children’s life chances. Prolonged or deep income poverty among families
with children may signal more chronic problems than merely a lack of income.
Income support policies may help alleviate economic distress among such families,
helping to provide families’ basic needs; however, without other social supports or
other, more fundamental changes in children’s family circumstances, children’s
prospects may remain limited.
Numerous programs operate in the U.S. to aid children without a breadwinner,
or with one whose earnings are low. These programs, together, constitute the main
threads of this nation’s income/social safety net:
!Social insurance programs (Social Security and Unemployment
Insurance-UI) provide payments for children whose parent has paid
payroll taxes but is now out of the workforce. Social Security
benefits are paid to children whose parent(s) is dead, disabled, or
retired. Unemployment insurance benefits are paid temporarily to
some workers who have lost a job (most state UI programs do not
provide dependents’ benefits, however). Neither program imposes
an income test. Benefits are an earned entitlement. Refundable tax
credits (the federal Earned Income Tax Credit, or EITC, and the
child tax credit) supplement low earnings of parents.
!Cash welfare programs make payments to some needy children and
their parents. Major welfare programs for children are Temporary
Assistance for Needy Families (TANF) and, for disabled children or
children with disabled parents, Supplemental Security Income (SSI).
These programs impose an income test (and, usually, an assets test).
TANF seeks to move parents into the labor market and requires
states to condition eligibility (beyond two months) on parental work.
Noncash welfare programs, such as food stamps, subsidized
housing, Medicaid and the State Children’s Health Insurance
Program (SCHIP) provide in-kind benefits. These programs also are
means-tested.
Government is challenged to maintain family self-support through work-based
policies to promote parents’ work and family economic self-sufficiency, while at the
same time maintaining a safety net that prevents children from falling into abject
poverty when parents are unable to work or their efforts are insufficient.



Child Poverty in 2007
In 2007, 12.8 million children2 out of a total of 72.8 million lived in families
whose pre-tax money income that year fell short of the poverty threshold. This
translates into a child poverty rate of 17.6%.
As a group, children areHow is Child Poverty Measured?
more likely to be poor than are
either the aged (persons aged 65The Census Bureau measures poverty by
or older) or nonaged adultscomparing money income of the child’s family
(persons 18 to 64 years old).with income thresholds that vary by family size and
Figure 1 compares 2007composition. For this purpose, the Bureau counts
poverty rates of children, theonly money income before taxes (and any capital
aged, and nonaged adults. Itgains). For 2007, the poverty threshold for a single
shows that children were 80%parent with two children was $16,705; for two
more likely to be poor than theparents with two children, it was $21,027.
aged and that the incidence ofThe official count of the poverty population
poverty among nonaged adultstakes into account all cash income (other than any
was only slightly higher thancapital gains) before taxes. Thus, it includes social
that of the aged.insurance cash payments and cash welfare. It
excludes noncash aid and tax credits. The Census
There are some well-Bureau also issues alternate poverty counts that
known correlates to childassign value to major noncash benefits and tax
poverty. A child’s risk of beingcredits, but they are not included in this CRS
poor varies by family structurereport.


and size and by race/ethnicity.
Further, since children primarily
rely on adult workers for income, child poverty also varies by the educational
attainment and age (which is related to work experience) of the family’s head, and
(if present) spouse.
This section provides a profile of child poverty in 2007. Shown are child
poverty rates by characteristics of the family, child, or family head and spouse. This
perspective answers the question, among children, who are most at risk for being in
poor families? This section also provides the composition of child poverty by those
characteristics, answering the question who are the poor children?
2 The Census Bureau defines related children under age 18 as children who are related to the
household head. In March of 2007, there were 74.0 million persons under the age of 18,
with 72.8 million meeting the definition of a related child. The remaining 1.2 million
persons under the age of 18 who are not considered related children include (1) those who
live in families all of whose members are not related to the head of the household; (2)
children who are not living with relatives (e.g., foster children); and (3) persons under the
age of 18 who are themselves household heads or are spouses of household heads.

Figure 1. Poverty Rates of Children, the Aged, and Nonaged Adults,

2007


20%
17.6%
15%
10.9%
9.7%10%
5%
0%
Related ChildrenAgedAge 18-64
(Under 18)
Source: Congressional Research Service (CRS) with data from the U.S. Census Bureau.
Child Poverty by Family Type
Living arrangements of U.S. children have undergone a dramatic shift since the
1960 census. In 1960, 88 out of 100 children lived with two parents. The proportion
living with two parents averaged 81% during the 1970s, 75% in the 1980s, and 70%
in the 1990s. Corresponding increases were registered by children living with mother
only (the family type most afflicted with money income poverty): 8% in the 1960
census; 15% during the 1970s; 20% in the 1980s, and 23% in the 1990s. The data
for children living with father alone: 1% in the 1960 census, 3% on average during
the 1970s and the 1980s, and 4% during the 1990s. Finally, the share of children
living with neither parent averaged 3% during the 1970s and 1980s, but rose to 4%
in the 1990s.3
Figure 2 presents data about poverty rates of children who lived in families in

2007. The bar chart presents 2007 child poverty rates by type of family. As it shows,


children in married-couple families had a much lower poverty rate (8.5%) than those
in single parent families headed by a woman (43.0%) or a man (21.3%). The pie
3 U.S. Census Bureau, Living Arrangements of Children Under 18 Years Old, 1960 to
Present, Table CH-1, Internet release date September 15, 2004. See [http://www.census.gov/
population/socdemo/hh-fam/tabCH-1.pdf].

chart shows the composition of the 12.8 million related poor children. Female-
headed families held the majority of poor children — 58.9%, or 7.5 million.
Children in husband-wife families, despite their relatively low risk of poverty,
comprised 34.0% of all poor children, or 4.3 million. The remaining 0.9 million poor
children (7.1%) were in male-headed families (no wife present).
Figure 2. Poverty Among Related Children, By Family Type, 2007


Poverty RatesPercent of All Poor Children
Husband- wif e8. 5%Husband- wif e
f a m ilyf a m ily
34.0%Male head
7. 1%
21.3%Male head
Female head43.0%Female head
58. 9%
0. 0% 20. 0% 40. 0%
Source: Congressional Research Service (CRS) with data from the U.S. Census Bureau.
Because of the relatively high poverty rate among children in female-headed
families, much of the policy discussion about child poverty centers on this group.
Therefore, much of this remaining profile provides information on the poverty rate
and composition of poverty for children in single parent families as well as for all
children.
Among children in female-headed families, poverty rates vary by whether the
single mother had ever been married (see Figure 3). Children with mothers who
never married are about twice as likely to be poor (a 54.8% poverty rate) as children
whose mothers divorced (poverty rate of 27.6%). Moreover, the number of all
children in families where the single mother never married exceeds the number of
children in families where the mother divorced. Thus, children in families with
never-married mothers account for a large share of poor children, about half (51.3%)
of all poor children in female-headed families.

Figure 3. Poverty Among Related Children in Female-Headed
Families, by Marital Status of the Female Head, 2007


Poverty RatesPercent of All Poor Children in
Female-Headed Families
44. 5%Absent
Divo rcedSep a rat e d
21.3%16.9%
35. 0%W idowed
Widowed
6.0%27. 6%Div o r c ed
Spouse
ab sen t
4.6%48. 8%Separ at ed
N e ve r- M a rried54. 8%Never-Married
51.3%
0. 0% 20. 0% 40. 0% 60. 0%
Source: Congressional Research Service (CRS) with data from the U.S. Census Bureau.
Child Poverty by Race and Ethnicity
Children in racial and ethnic minorities tend to have higher poverty rates than
white children. Figure 4 shows that in 2007, the poverty rate among African-
American (non-Hispanic) children was 34.2% — 3.5 times the poverty rate for white
(non-Hispanic) children of 9.7%. Hispanic children had lower poverty rates than
African-American children, but higher poverty rates than white children.
Despite the variance in poverty rates by race and ethnicity, the populations of
poor white, African-American, and Hispanic children are of similar size. The larger
population of white children, when multiplied by the lower poverty rates of this
group, yields a number of poor white children not too different from the number of
poor children in each of the two other racial/ethnic groups.

Figure 4. Poverty Rates Among Related Children, By Race and
Ethnicity, 2007


Poverty RatesPercent of All Poor Children
9.7%White
Wh i t e
31.2%
African-
African-34.2%American
American
28.5%
Oth e r
6.4%28.3%Hispanic
H ispanic15.0%Other
34.0%
0.0% 10.0% 20.0% 30.0% 40.0%
Source: Congressional Research Service (CRS) with data from the U.S. Census Bureau.
Figure 5 shows poverty rates and the composition of poor children by race and
ethnicity for children in female-headed families. As in the overall child population,
minority children have higher rates of poverty than do white children — the poverty
rates for African-American (49.9%) and Hispanic (51.6%) children are both about

1.5 times that of white children in female-headed families (32.4%). However,


African-American children comprise the largest group of poor children in female-
headed families — accounting for about four out of ten poor children in female-
headed families.

Figure 5. Poverty Among Related Children in Female-Headed
Families, By Race and Ethnicity, 2007


Poverty RatesPercent of All Poor Children in
Female-Headed Families
32.4%White
White
27.8%
49.9%Af rican-Americ an
Af r i can-
Am er ican
39.1% O t her
5.4%51.6%Hispanic
H ispanic36.6%Other
27.7%
0.0% 20.0% 40.0% 60.0%
Source: Congressional Research Service (CRS) with data from the U.S. Census Bureau.
Additionally, Hispanic children are highly likely to be in married couple
families. (Not shown on the figure.) Among children in married-couple families,
Hispanic children have a poverty rate (19.3%) higher than that of whites (4.7%) or
African-American children (11.0%). Therefore, Hispanics account for the largest
share of poor children in married-couple families (45.9%).
Thus, Hispanic children in female-headed families have a slightly higher poverty
rate than African-American children in female-headed families, and also have a
substantially higher poverty rate than African-American children in married-couple
families. However, their poverty rates among all children are lower than those for
African-Americans. This is because Hispanic children are more likely than African-
American children to be in married-couple families, and children in married-couple
families have lower poverty rates than children in female-headed families.

Figure 6. Poverty Rates Among Related Children in Married Couple
Families, By Race and Ethnicity, 2007


Poverty RatesPercent of All Poor Children in
Married Couple Families
White4. 7%White
35.4%Af r i can-
Am er ican
10.4%Af r ican-
11. 0%Am er ic an
Other19. 3%Hispanic
8.4%
H i spanic9. 1%O t her
45.9%
0. 0% 5. 0% 10. 0% 15. 0% 20. 0% 25. 0%
Source: Congressional Research Service (CRS) with data from the U.S. Census Bureau.
Child Poverty by Annual Work Experience
of the Family Head or Spouse
If a family has no earnings, a child is almost certain to be poor. The poverty rate
in 2007 for children without a working parent (or spouse of the family head) was
70.0% (bar chart in Figure 7). However, millions of children are poor even though
the family head (or spouse) works full time, year round. In 2007, about seven out
of 100 children with such a worker were poor. The number of these children totaled
4.2 million, and they accounted for 32.4% of all poor children (pie chart in Figure
7). Most children (77.4%, not shown on the chart) live in families where either the
head or, if present, the spouse is a full-time, full-year worker. Hence, these children
account for a relatively large share of all poor children even though their poverty rate
is low. The bar chart shows that the incidence of poverty is 35.1% among children
in families with a parent who works full-time part-year and 40.0% among those in
which a parent works part-time, full-year.

Figure 7. Poverty Among Related Children, By the Work Experience
of the Family Head or Spouse, 2007


Poverty RatesPercent of All Poor Children
Full- t im e
Full-time7.4%full year
full yearFull-time
32.4%part yearFull-time
16.1%35.1%part year
Part-tim e40. 0%Part-tim ef u ll- year
f u ll- year
7. 8%Part-tim e
Part-tim e65. 3%par t - year
par t - year Nonwor k e r
9. 8% 33. 9%70. 0%Nonwor k e r
% . 0% . 0% .0% .0%
0.0 20 40 60 80
Source: Congressional Research Service (CRS) with data from the U.S. Census Bureau.
The relationships between work experience for family adults over the year and
child poverty also hold for children in female-headed families (though these families
are without a potential spouse to supplement the work of the family head). Among
children in female-headed families where the head works full-time, year-round,
18.7% were poor (bar chart in Figure 8). Of children in single, female-headed
families without an earner, 76.2% were poor.
The pie chart in Figure 8 depicts the composition of all poor children in female-
headed families. Of these children, 20.5% — totaling 1.5 million children — lived
in families where the mother was a full-time worker, year round. However, the pie
chart also shows that 42.9% of all poor children in these families had a mother who
did not work during the year. Though work among lone mothers has increased
dramatically in recent years (discussed later in this report), 24.2% of all children in
female-headed families had a mother who did not work. In comparison, only about
2.6% of all children in married-couple families had neither adult heading the family
in the workforce.

Figure 8. Poverty Among Related Children in Female-Headed
Families, by Work Experience of the Female Head, 2007


Poverty Rates inPercent of All Poor Children in
Female-Headed FamiliesFemale-Headed Families
Full-tim e18.7%Full-tim efull-year
part-yearPa rt-tim e
Full-tim e14.5%
full-yearfull-year48.9%Full-tim e
20.5%8.9%part-year
Pa rt-tim e46.8%Pa rt-tim efull-year
part-year
13.2%
72.3%Pa rt-tim epart-year
Nonworker76.2%Nonworker
42.9%
% .0 % . 0% . 0% .0 % .0 %
0 .0 20 4 0 60 80 1 00
Source: Congressional Research Service (CRS) with data from the U.S. Census Bureau.
Child Poverty by Educational Credential
of the Family Head or Spouse
From 1960 to 2007, the share of the population (at least 25 years old) with a
high school diploma (or more) has more than doubled, from 41.1% to 85.7%. In the
same period the share with 4 or more years of a college education more than tripled,
from 7.7% to 28.7%.4 The returns to education have also increased over time, as the
average wages of those with a college degree have increased relative to the average
wages of those without such a degree. Increasingly, job applicants must have
postsecondary credentials. By some measures, high school graduates and those who
failed to complete high school have seen declining real wages.
Thus, child poverty rates depend in part on the educational level of the family
head (or spouse). In 2007, almost half (49.6%) of children whose family head had
not completed high school were poor. This group made up one-third of all poor
children (see Figure 9). Children whose family head (or the family head’s spouse)
had completed high school, but not gone beyond it, had a poverty rate of 27.3% and
represented 37.2% of all poor children. If the family head or family head’s spouse
4 U.S. Census Bureau, data at [http://www.census.gov/population/www/socdemo/educ-
attn.html].

achieved an associates degree, the child poverty rate was sharply lower (9.7%) than
that of one with some postsecondary education, but no degree (16.0%).
Figure 9. Poverty Among Related Children, by the Educational
Attainment of the Family Head or Spouse, 2007


Poverty RatesPercent of All Poor Children
Less than H.S.49.6%Less than H.S.
33.8%
27.3%High schoolor equiv.
High SchoolBachelorsSome
or Equiv.or higher16.0%post-secondary
37.2% 7.0%
Associates9.7%Associates
6.0%
Some post-secondary
16.1%Bachelors
3.5%or higher
% .0% .0% .0% . 0% . 0% . 0%
0. 0 1 0 2 0 3 0 40 50 60
Source: Congressional Research Service (CRS) with data from the U.S. Census Bureau.
In 2007, more than two out of three children (68.3%) in families headed by a
mother who failed to complete high school were poor (see Figure 10). This group
represented 33.6% of all poor children in female-headed families. Attainment of a
high school diploma reduced the child poverty rate, but it still was almost one-half
(49.2%). As with the overall child population, poverty rates were much lower when
the female head earned a college degree. Children in families where the female head
received an associates degree had a poverty rate of 24.6%, compared with 35.5% for
those who had some post-secondary education but no degree. Poverty rates were
relatively low (13.9%) for children with female heads who had a bachelors degree
or an advanced degree.

Figure 10. Poverty Among Related Children in Female-Headed
Families, by Educational Attainment of the Female Head, 2007


Poverty Rates inPercent of All Poor Children in
Female-Headed FamiliesFemale-Headed Families
68.3%Less than H.S.
Less than H.S.
33.4%High School
49.2%or Equiv.
35.5%Somepos t-s e c onda ry
High SchoolBachelors +
or Equiv.4.4%
38.0%24.6%Associates
Associates5.4%
Some13.9%Bachelorsor higher
pos t-s e c onda ry
18.8%
% .0 % .0% . 0% . 0% . 0% . 0% .0 % . 0%
0 .0 1 0 20 30 4 0 50 60 70 80
Source: Congressional Research Service (CRS) with data from the U.S. Census Bureau.
Child Poverty by the Age of the Head or Spouse
Child poverty rates are highest in young families with children. The poverty rate
for preschool children (children under the age of six) was 20.8% in 2007, compared
with a 16.0% poverty rate for older children. This is because, in part, these children
have on average younger parents. Younger parents, who have less job experience in
the workforce, tend to earn less than older adults with more experience.
Figure 11 shows the child poverty rate by the age of the household head or
spouse if present. For married-couple families, the age of the older adult was used
to determine the age of the head or spouse. It shows that child poverty rates tend to
mirror the “life-cycle” pattern of earnings of adults. That is, earnings tend to be low
in the early years, peak in middle age, and decline as adults approach and reach
retirement age. This explains some of the pattern shown on the figure. However,
children in families with a never-married female head (the group with the highest
poverty rate) also tend to be in families where the head was young.
Children in families with the head or spouse under age 25 have the highest
poverty rates, almost 50%. For children in families with a head or spouse aged 30
to 34, the poverty rate drops to 22.4%. Among poor children, 45% are in families
with the head and spouse younger than age 35. Child poverty rates drop below the

average rate for all children (17.6%) for age groupings with the head or spouse over
35 and younger than age 64, but are about the same as the overall rate for children in
families with a head or spouse age 65 and older.
Figure 11. Poverty Among Related Children, by Age of the Family
Head or Spouse, 2007


Poverty RatesPercent of All Poor Children
Age 25-2915.5%Age 30-3448.5%Under 25
18.8%32.4%Age 25-29
22.4%Age 30-34
Under 2510.4%15.5%Age 35-39
Age 65 +2.5%12.6%Age 40-44
Age 35-3918.1%11.1%Age 45-49
Age 50-6410.7%11.1%Age 50-54
15.8%Age 55-59
Age 40-4414.1%Age 45-4910.0%15.6%Age 60-64
17.7%Age 65 and Older
% . 0% . 0% .0 % .0 % .0 % . 0%
0 .0 10 20 30 40 50 6 0
Source: Congressional Research Service (CRS) with data from the U.S. Census Bureau.
The basic relationships between child poverty and age of the family’s adults
shown in Figure 11 also tend to hold for children in female-headed families: the
highest poverty rates are for children with younger parents. (No figure is shown.)
However, poverty rates for children in female-headed families are higher than for all
related children for all age categories of the family head.
Child Poverty by Immigrant Status
of the Family Head or Spouse
Figure 12 shows that slightly more than one out of every four poor children is
the child of a parent born outside the United States. The poverty rate for these
children in 2007 was 26.8%, compared with a rate of 15.7% for children whose
family head or spouse was native born. Any children born in the United States are
citizens, regardless of their parents’ citizenship status.

Figure 12. Poverty Rates Among Related Children, By Immigrant
Status of the Family Head and Spouse, 2007


Poverty RatesPercent of All Poor Children
Immigr ant26.5%
26.8%Head and spouseimmigrants
15.7%Head or spousenative born
Native born
73.5%
% . 0% .0 % . 0 % . 0% . 0% . 0%
0. 0 5 10 15 2 0 2 5 3 0
Source: Congressional Research Service (CRS) with data from the U.S. Census Bureau.
Trends in Child Poverty
Children have been more likely than any other age group in the U.S. to be poor
since 1974, when their poverty rate first topped that of the aged. In records dating
back to 1959, the incidence of poverty among related children in families has ranged
from a peak of 26.9% (1959) to a low of 13.8% (1969). (See Figure 13). In 2007,
the rate was 17.6%. Child poverty rates display both cyclical and longer term trends.
Except for the 1961-1962 recession, child poverty rates rose during economic
slumps, peaking in the year or two after the end of the recession.

Figure 13. Poverty Rates for Related Children, 1959-2007


30%


25%


20%


2007

17.6%


15%


10%


5%


0%


59 96 1 963 965 967 969 971 973 975 977 979 98 1 983 985 987 989 991 993 9 95 997 999 001 003 005 007
19 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2
Source: Congressional Research Service (CRS) with data from the U.S. Bureau of the Census and
the National Bureau of Economic Research.
Note: Shaded areas indicate periods of economic recession.
During the years covered by Figure 13, the poverty rate for the aged (not
shown) fell from 35.2% in 1959 to 9.7% in 2007.
Trends in Child Poverty Rates, by Type of Family
Figure 14 shows poverty rates of related children, by family type, from 1959-
2007. Poverty rates for children in female-headed families have been higher than
those for children in male-present (married couple or families with a male-head but
no spouse) since poverty data have been recorded. The figure shows that poverty
rates for both female-headed families and male-present families fell in the early
period (1960s). Since then, much of the variation in poverty rates among children
in male-present families has been cyclical.
Poverty rates for children in female-headed families show little cyclical
variation in the first three recessions shown (1961, 1970-1971, 1974-1975).
However, by the 1982-1983 recession, poverty rates for children in female-headed
families do begin to exhibit cyclical increases and decreases, likely attributable to
increased labor force participation of women. Poverty rates for children in female-

headed families also show pronounced secular (noncyclical) patterns. Rates during
the entire economic expansion of the 1980s were higher than in the mid- and late-
1970s, coincident with the increase in the number of children of never-married
mothers, who have high poverty rates compared to children in other types of female-
headed families.
From the mid-1990s to 2000, in the wake of the 1996 welfare reform law, the
drop in the poverty rate was more pronounced for children in families headed by a
lone mother than for children in families with a male present. However, the increase
in the poverty rate for children in single parent families from 2000 to 2007 was also
more pronounced than the increase in the rate shown for children in families with a
male present.
Figure 14. Child Poverty Rates by Family Type, 1959-2007


80%


60%


Children in
female-headed
families, 2007:

40% 43.0%


All
children,

20% 2007:17.6


Children in
male-present
families, 2007:

0% 9.5%


59 9 61 96 3 9 65 9 6 7 96 9 9 71 97 3 9 75 9 7 7 97 9 9 81 9 8 3 9 8 5 9 87 9 8 9 99 1 9 93 9 9 5 9 97 9 9 9 0 0 1 00 3 0 0 5 00 7
1 9 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2
Source: Congressional Research Service (CRS) with data from the U.S. Bureau of the Census and
the National Bureau of Economic Research.
Note: Shaded areas indicate periods of economic recession.
Trends in the Number and Composition of Poor Children
In 1959, the first year of official poverty data, 17.2 million children were
counted as poor (see Figure 15). The poor child population declined through most
of the 1960s and hovered around 10 million during the 1970s (with an all-time low
of 9.5 million in 1973). During the 1980s the peak number was 13.4 million (1983);

and during the 1990s, 15 million (1993). It rose in 2004 to 12.5 million. Since 1970,
the number of poor children has fluctuated because of both the economy and
demographic trends. The number of related children under 18 fell from 70 million
in 1968 to 62 million in 1978. The number of related children began to rise again in

1988, reaching 72.8 million in 2007.


Figure 15 shows the number of poor children from 1959 to 2007 by family type.
It shows both the variation in the number of poor children, and its changing
composition. In 1959, most poor children and most children lived in married-couple
families. Since 1972, the majority of poor children have been in female-headed
families.
Figure 15. Number of Poor Related Children, By Family Type, 1959-

2007


Millions
20
15
F em ale- headed
10 Male-presentf a m ilie s
families
5
0
5 9 96 1 9 63 9 6 5 9 6 7 96 9 9 71 9 7 3 9 7 5 97 7 9 79 9 8 1 9 8 3 9 8 5 9 8 7 98 9 9 9 1 9 9 3 9 9 5 99 7 9 99 0 0 1 0 0 3 00 5 0 07
19 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2
Source: Congressional Research Service (CRS) with data from the U.S. Census Bureau.
The historical trend toward an increased prevalence of children living in female-
headed families has resulted in higher overall child poverty rates than would have
otherwise been the case had children’s living arrangements been unchanged over the
past several decades. In order to approximate the effects of historical changes in
living arrangements on the overall child poverty rate, we estimate overall child
poverty rates based on the relative composition of children by family type that existed

in 1960, while maintaining historically observed child poverty rates by family type.5
Effectively, the adjusted poverty rates present a crude approximation of what the
overall child poverty rate might have been had family composition remained
unchanged from its 1960 level. Figure 16 shows the effects of these adjustments.
The top line of the figure shows historical child poverty rates, whereas the bottom
line shows the overall adjusted child poverty rate had child family living
arrangements been the same as those observed in 1960. The figure shows, for
example, that in 2007 the child poverty rate was 17.6%, but had family composition
in 2007 been the same as in 1960, the overall adjusted child poverty rate would have
been 12.6%; instead of the observed 12.8 million children being counted as poor in
2007 had family composition remained unchanged from 1960, the number of poor
children estimated by this method would have been 9.2 million, or 3.6 million fewer
than the number observed.


5 For example, in 1960, 9.2% of children lived in female-headed families, but in 2007,
24.1% lived in such families. In 2007, the poverty rate for children in female-headed
families was 43.0%. If, in 2007, 9.2% of children had lived in female-headed families (i.e.,
the same share as in 1960), rather than the 24.1% observed, they would have numbered 6.7
million, rather than the 17.6 million observed. Assuming that the child poverty rate
remained at its 2007 level (i.e., 43.0% of children in such families being considered poor),
then an estimated 2.9 million children in female-headed families would have been poor (i.e.,
.430 x 6.7 million) rather than the 7.5 million observed (i.e., .430 x 17.6 million).
Considering then children living in male-present families, their estimated number in 2007,
assuming 1960 incidence rates, would have been 66.1 million, rather than the 55.2 million
observed. Applying the child poverty rate of 9.5%, in 2007, for children living in male-
present families, to the number of children who would have been estimated to be living in
such families when adjusted to 1960 incidence levels (66.1 million), the number of poor
children in such families would be 6.3 million, rather than the observed 5.3 million.
Although the estimated number of poor children in male-present families would be about
1 million higher, if family composition in 2007 was the same as in 1960, the number in
female-headed families would be 4.7 million lower, for a net effect of 3.6 million fewer poor
children in 2007, than what was actually observed. Based on these adjustments, the total
number of poor children in 2007 would have been 9.2 million, rather than the observed 12.8
million, resulting in a child poverty rate of 12.6%, rather than the observed 17.6%.

Figure 16. Child Poverty Rates:
Historic Rates and Adjusted Rates,
Holding Family Composition at 1960 Levels


30 . 0 %
Actual total child poverty rate
Total adjusted poverty rate applying historical poverty rates to 1960's composition
25 . 0 %
20 . 0 %
ate
15.0%erty R
v
Po
10 . 0 %
5. 0%
0. 0%1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Ye a r
Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census
Bureau Historical Poverty Tables from the Current Population Survey (CPS), Table 10. - Related
Children in Female Householder Families by Poverty Status; available at [http://www.census.gov/
h h e s / www/ p o v e r t y / h i s t p o v / h s t p o v 1 0 . h t ml ] .
Rise in Work by Lone Mothers
Dramatic gains have occurred in recent years in work by lone mothers —
especially among those with preschool age children. Employment rates of single
mothers with infants or toddlers (under age 3) increased markedly from 1993
through 2000, rising from 35.1% to 59.1% over the period (see Figure 17).6 In 2000
their rate of employment overtook that of their married counterparts — in earlier
years these single mothers’ rate of employment had lagged behind their married
counterparts by as much as 18 percentage points. Similarly, single mothers with
somewhat older preschool age children (age 3 to 5) also experienced significant
employment gains over most of the 1990s. Among these women, their employment
rate rose from 54.1% in 1992, to 72.7% in 2000, overtaking their married
counterparts in 1999. Employment rates among single mothers have yet to rebound
to the peak levels attained prior to the last economic (2001) recession, marked as
beginning in March 2001 and ending in November of that year.
6 Employment rates are for March of the indicated year.

Figure 17. Employment Rates of Married and Single Mothers,
by Age of Youngest Child, March 1988 to March 2007


100%Percent employed100%Percent employed
95%
90% 90%
85%
80% 80%
75%Age 6 to 17
70% 70%
65%Age 3 to 5
60% 60%
55%Under age 3
50% 50%
45%
40% 40%
35%
30%30%Married mothers
25%Single mothers
20% 20%
15%
10% 10%
5%
0% 0%
r 0 0 2 0 0 3 0 0 4 0 0 5 0 0 6 0 0 7 00 8 0 0 9 0 10
1 9 8 8 1 9 8 9 1 9 90 1 9 9 1 1 9 92 1 9 9 3 1 99 4 1 9 9 5 1 99 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 2 2 2 2 2 2 2 2
Year
Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census
Bureau Mar. 1988 through 2007 Current Population Survey (CPS) data.
Note: r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived.
Factors encouraging work by single mothers include a healthy economy during
much of the 1990s, the transformation of the family cash welfare program into a
work-conditioned and time-limited operation, increases in the EITC and increases in
the federal minimum wage. TANF — and preceding state-waivered programs of Aid
to Families with Dependent Children (AFDC) — converted cash assistance from a
needs-based entitlement to a program of temporary help aimed at promoting work
and personal responsibility. Under the TANF block grant, most states reward work
by permitting recipients to add to their benefits some (or all) of their earnings, at least
for a time. And most states have increased sanctions for failure to perform required
work. Increases in the EITC, passed by Congress in 1993 and phased in between

1994 and 1996, have increased the financial incentive for single mothers to work.7


Other factors, such as increased funding for child care subsidies, may also have
7 Bruce D. Meyer and Dan T. Rosenbaum attribute 60% of the increase in single mothers’
weekly and annual employment between 1984 and 1996 to the EITC. See their paper,
“Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers,” NBER
Working Paper No. 7363, September 1999.

contributed to making work possible for more single mothers. For more details about
trends in welfare, work, and the economic well-being of lone-mother families with
children, see CRS Report RL30797, Trends in Welfare, Work and the Economic
Well-Being of Female-Headed Families with Children: 1987-2006, by Thomas Gabe.
How Many Single Mothers Are Poor Despite Working?
Figure 18 shows the trend in the distribution of annual hours worked by poor
lone-mothers from 1987 to 2007. The figure shows, for example, that poor lone-
mothers increased their job attachment during these years, based on annual hours of
work. The picture of hours worked mirrors the employment rate numbers depicted
earlier, in Figure 17. Hours worked among poor lone-mothers increased over the
same period in which their employment rates were increasing. Lone-mothers are not
only more likely to be working in the later years than in earlier years, but are likely
to be working more hours. For example, in 1995, half of all poor lone mothers did
not work, as indicated by the median number of hours worked (i.e., estimated hours
worked was zero at the 50th percentile). By 1999 and 2000, half of all poor singleth
mothers (the 50 percentile) were working nearly 480 hours per year or more, and in
2000 20% (80th percentile) were working 1,760 or more hours. The figure shows the
decline in hours worked from 2000 to 2005, for all but the top 10% of poor working
mothers (90th percentile), probably reflecting the effects of the past (2001) recession
on poor mothers’ work attachment. Annual hours worked have increased somewhat
since 2005 but are still below their 2000 peak.
Figure 18.Annual Hours Worked by Poor Mothers
in Mother-Only Families at Various Percentile Rankings of Hours
Worked, 1987 to 2007


25 00
90th percentile
20 00
80th percentile
15 00orked
rs w70th percentile
l hou
10 00Annua
60th percentile
50050th percentile
(m edian)
40th percentile
019 87 1988 1989 199 0 1991 1 992 1993 1994 1 995 1996 1997 1998 199 9 2000 2001 2002 2003 2 004 2005 2006 20 07
Ye a r
Source: Estimates prepared by the Congressional Research Service based on U.S. Census Bureau
Mar. 1988 through 2008 Current Population Survey (CPS) data.

Overall, among all types of families with related children, Census Bureau data
show that the incidence of “full-time work poverty” increased somewhat from 1987
to 2007. Full-time full-year workers are considered to have worked 35 or more hours
per week for 50 or more weeks during the year. Among all children, the rate at which
at least one of their parents were full-time, full-year workers increased from 71.8%
in 1987 to 79.8% in 2000, and stood at 77.4% in 2007 (see Table 1). The decline
since 2000 was due, at least in part, to the 2001 recession and unemployment in its
aftermath. Tracking this trend, the percent of poor children in families where one
parent was a full-time, year-round worker rose from 19.6% of poor children in 1987
to 35.4% of poor children in 2000, before falling to 30% in 2003. It stood at 32.4%
in 2007. The share of children in families with lone mothers who worked full-time
year-round also increased fairly sharply, from 8.3% in 1987 to 21.6% in 2000, falling
to 16.6% in 2003, before rising again to 20.4% in 2007.
Table 1. Percent of Related Children in Families
Below the Poverty Threshold with at Least One
Full-Time, Year-Round Worker, 1987-2007
Percent of
Children inPercent of Poor Children with a Full-Time,Year Round Working Parent
Families with a
Full-Time, Married
Year- RoundCoupleMother-Only
YearWorking ParentAll FamiliesFamiliesFamilies
1987 71.8 19.6 36.5 8.3
1988 72.7 22.6 40.8 10.3
1989 72.3 22.4 41.2 9.4
1990 72.5 22.6 39.2 9.7
1991 71.3 20.8 37.3 10.4
1992 71.7 19.9 36.0 9.9
1993 71.4 21.5 38.8 9.6
1994 72.7 24.3 45.5 10.9
1995 73.9 25.4 44.6 14.1
1996 74.9 24.8 47.3 10.2
1997 75.5 25.4 45.7 13.2
1998 76.6 31.5 55.0 17.6
1999 78.4 31.4 51.4 18.6
2000 79.8 35.4 57.8 21.6
2001 78.4 31.9 53.3 18.7
2002 77.6 33.4 49.1 19.0
2003 76.6 30.0 52.6 16.6
2004 77.4 32.7 55.7 18.6
2005 77.8 32.1 56.3 17.9
2006 78.1 32.8 57.9 19.2
2007 77.4 32.4 54.4 20.4
Source: Table prepared by the Congressional Research Service, based on data from the U.S.
Census Bureau.



Government “Safety Net” Policy
The framework for federal cash income support policy can be found in the
Social Security Act and the Internal Revenue Code. A two-tier safety net was put
into place in the 1935 Act. The first tier, consisting of Old-Age Insurance (usually
thought of as social security) (Title II) and unemployment insurance (Title III) aimed
to protect families from the economic risks associated with the retirement or
unemployment of their workers. Workers earned rights to these social insurance
benefits by paying payroll taxes in a covered job. The second tier made grants to
states to help make means-tested payments to specified categories of needy persons
not expected to work, namely, the aged (Title I),8 children (with only one able-bodied
parent in the home) (Title IV), and the blind (Title X).
Added to the social insurance tier over time were Survivors’ Insurance (1939
Social Security Act Amendments), Disability Insurance (1956 Amendments), and
Medicare (1965 Amendments) health insurance for the elderly. Added to the welfare
tier over time was aid for needy persons who were permanently and totally disabled
(1952), replaced in 1972 by a 100% federal cash program for the aged, blind, and
disabled called SSI. Health insurance for low-income aged, blind, and disabled
persons and for needy families with children was added in the form of the Medicaid
program (1965 Amendments). Health insurance for low-income children ineligible
for Medicaid was added by enactment of the State Children’s Health Insurance
Program (SCHIP) (Balanced Budget Act of 1997). Also, the cash welfare program
for needy children was opened up to some unemployed two-parent families (1961)
and, finally (1996) was replaced by a block grant for temporary assistance.
The social insurance programs are designed to provide benefits when a family
loses earnings because its breadwinner is permanently or temporarily out of the labor
market (through death, disability, unemployment). At the outset the welfare
programs were restricted to persons not expected to work, but over time, work
requirements have been added to the cash welfare program for families with children,
and it now emphasizes moving families from welfare to work.
In 1975, Congress enacted a program to explicitly support and supplement the
income of working poor parents — the EITC. This provision of the tax code makes
payments from the Treasury to parents whose credit exceeds any income tax liability.
In tax year 2005, the EITC was claimed by 22.8 million tax filers, with credits9
totaling $42.4 billion.
In addition, child care subsidies have been expanded for families receiving cash
welfare by the Family Support Act of 1988, the Omnibus Budget Reconciliation Act
of 1990, which created child care programs for the working poor, and the 1996
welfare reform law, which consolidated child care funding. FY2008 appropriations


8 Aid to the needy aged was placed in Title I as the most popular provision of the Social
Security Act.
9 See CRS Report RL31768, The Earned Income Tax Credit (EITC): An Overview, by
Christine Scott.

for child care totaled $5 billion ($2.9 billion for the mandatory child care block grant
and $2.1 billion for the discretionary Child Care and Development Block Grant).10
Finally, the federal child support enforcement program (begun in 1975) has
shifted its role from reimbursing federal and state governments for welfare costs to
facilitating income transfers to families with children where one parent (usually the
father) is noncustodial. The increased role of child support is particularly important
in light of the growth of female-headed families. In FY2006, child support
enforcement offices collected $24 billion: $0.9 billion for TANF cash welfare
families, $9.5 billion for former TANF cash welfare families, $3.1 billion for families
receiving Medicaid (and no TANF), and $11.3 billion for families that never received
TANF cash welfare.11
Social Security
As noted above, the Social Security Act established an old-age insurance
system for workers; and later, social security was enlarged to cover dependents and
survivors of retired or disabled workers.12 With these additions, social security
became a system of comprehensive insurance for all families with a worker who paid
social security payroll taxes.13 If the family breadwinner died or became disabled,
social security would provide cash for his dependents and survivors. It was widely
hoped that coverage by work-related social insurance eventually would eliminate
most need for cash relief to families who lost their breadwinner.
In September 2008, there were 50.6 million social security recipients, of which
3.1 million were children.14 This means the federal government makes social security
payments to about 4% of U.S. children. Total benefits to children totaled nearly $1.5
billion in that month, a rate of $17.5 billion per year. In addition, some adult social
security beneficiaries are in families with children, so that this program reaches an
even greater proportion of the child population.15
Unemployment Insurance
The Social Security Act also established the federal-state unemployment
insurance (UI) program. This program provides temporary unemployment benefits
to workers who are unemployed through no fault of their own, provided they have
earned a state-determined sum of wages during an established base period, usually


10 See CRS Report RL30785, The Child Care and Development Block Grant: Background
and Funding, by Melinda Gish.
11 See CRS Report RS22380, Child Support Enforcement: Program Basics, by Carmen
Solomon-Fears.
12 Child survivor benefits were first paid in January 1940.
13 Until 1950, social security omitted farm and domestic workers.
14 Source of this data is the Social Security Administration’s web site,
[ h t t p : / / www.ssa.gov/ OACT / Pr ogDat a / i c p.ht ml ]
15 See CRS Report RL33289, Social Security’s Effect on Child Poverty, by Thomas Gabe.

the first quarter of the last five completed calendar quarters, and are available for
work.
Historically there has been concern that UI eligibility rules present barriers to
low-wage workers with unstable work histories. To what extent might
unemployment benefits be available for former welfare recipients who lose a job?16
Studies of former cash recipients in a number of states conclude that most recipients
who leave welfare for work have sufficient earnings to qualify for UI at some point
after leaving welfare.17 However, having sufficient earnings is only one of the
qualifying conditions for receiving UI upon losing a job. The job loss must be
considered as occurring through no fault of the potential recipient, a definition that
varies among the states. A study of welfare leavers in New Jersey, considered a
fairly liberal state with respect to UI eligibility rules, found that as many as 60% of
those with monetary eligibility might have been disqualified for other reasons —
especially the high rates of voluntarily quitting a job. It found that about half of the
job quitters did so for a personal reason, such as a health problem, having to care for
a child at home, or a transportation issue. Advocates of broadening UI rules to
qualify more low-wage workers have recommended that states permit job quits for
“good reason.”
Cash Public Assistance for Children
Before passage of the Social Security Act in 1935, some states offered
“mothers’ pensions” so that needy mothers could stay home to raise their children.
This aid was largely restricted to “paternal orphans,” children whose father had
died.18 In response to the Great Depression, the Social Security Act provided federal
funds to enable states to help certain needy groups, including children whose second
parent was dead, incapacitated, or continually absent from home — Aid to
Dependent Children (ADC).19 The original purpose of AFDC was to help states
enable needy mothers to be full-time caregivers at home. Thus, it had no expectation
of mothers’ work and no requirement for it. In fact, the law penalized work by


16 For a discussion of unemployment insurance issues raised by the welfare-to-work
movement, see Rethinking Income Support for the Working Poor, Perspectives on
Unemployment Insurance, Welfare, and Work, edited by Evelyn Ganzglass and Karen Glass
(Washington, DC, National Governors Association, 1999).
17 See Anu Rangarajan, Carol Razafindrakoto, and Walter Corson, Study to Examine UI
Eligibility Among Former TANF Recipients: Evidence from New Jersey, Final Report
(Princeton, N.J., November 2002, Mathematica Policy Research, Inc.). This study was
prepared for the U.S. Department of Health and Human Services and the Department of
Human Services of New Jersey. See also Anu Rangarajan and Carol Razafindrakoto,
Unemployment Insurance as a Potential Safety Net for TANF Leavers: Evidence from Five
States (Princeton, N.J., September 2004, Mathematica Policy Research, Inc.). Prepared for
the Department of Health and Human Services, Office of the Assistant Secretary for
Planning and Evaluation.
18 In 1931, widows made up 82% of the needy mothers who received state aid (mothers’
pensions) and whose marital status was known. Winifred Bell, Aid to Dependent Children
(New York and London: Columbia University Press, 1965), p. 9.
19 In 1962, the program was renamed Aid to Families with Dependent Children (AFDC).

requiring states to reduce benefits by the full amount of any earnings (including those
spent on work expenses).
However, this changed over the years. Gradually the assumption that AFDC
mothers belonged at home faded as more and more nonwelfare mothers went to work
and as rising numbers of unwed mothers joined AFDC, altering the character of the
caseload.
Since the early 1960s, Congress has tried to promote work and self-support of
welfare families by means of work requirements, financial incentives,20 and various
services. The first work rule (1961) applied to unemployed fathers (a group that
Congress admitted to AFDC — at state option — that year). The rule required states
to condition AFDC for Unemployed Fathers (AFDC-UF) on acceptance of work. In
1967, Congress established a Work Incentive Program (WIN) for AFDC families and
required states to assign “appropriate” persons to this education and training
program. The 1967 law required states to give AFDC parents who went to work a
financial reward: disregard of some earnings when calculating benefits.21 In 1971,
Congress removed from states the discretion to decide who must work or train.
Instead, it specified that states must assign to WIN all able-bodied custodial parents
except those with a preschool child, under age six. In the Family Support Act of
1988, Congress lowered the young child age threshold for work exemption. It
required states to assign to a new Jobs and Basic Skills (JOBS) Training program for
AFDC families all able-bodied custodial parents except those with a child under age
three (under age one, at state option). However, the law required states to
“guarantee” child care for children below age six.
Finally, in 1996, Congress replaced AFDC with the TANF block grant. TANF
law requires states to engage certain percentages of adult recipients in specified
“work activities.” The law exempts no one from work participation, but it permits
states to exempt a single parent caring for a child under age one (and to exclude that
parent in calculating the state’s work participation rate). In addition, the law bars a
state from penalizing a single parent with a child under age six for failure to engage
in required work if the person cannot obtain needed child care because appropriate
care is unavailable (or available care is unsuitable). States decide individual
participation rules.
In June 2008, 3.0 million children were in families that received cash benefits
from TANF programs or separate state-funded (TANF) programs. This is down from
a historic peak of 9.6 million children in families receiving cash benefits from AFDC


20 In 1962, Congress removed the financial work penalty by requiring states to permit
working parents to add to their AFDC grant “any expenses reasonably attributed to the
earning of income.”
21 States were to disregard the first $30 monthly in earnings plus one-third of the remainder.
By regulation, the “reasonable”work expense deduction, including child care cost (already
in law) was added to the new disregard and taken last. In 1981, Congress capped the general
work expense disregard, added a capped child care disregard, and specified that these
disregards must be taken first; it also put a time limit on the one-third disregard. These
changes reduced the earnings level at which a person lost AFDC eligibility.

in 1994. In FY2006, federal and state spending on cash welfare benefits totaled $9.9
billion — a little less than half the amount spent on cash welfare by the federal
government and states back in the mid-1990s.22
Money Income Poverty Rates of Children,
by Income Source
Although there are numerous government “safety net” programs that aid
families with children, the chief component of money income for most families with
children is earnings. The first bars in Figures 19 and 20 show what child poverty
rates in 2007 would have been if families had no cash income other than earnings.
The rates would have been 21.8% for all related children and 52.4% for related
children in female-headed families. The last bars show the official money income
poverty rates, 17.6% for all related children and 43.0% for children being raised by
the mother alone. In succession, the intervening bars show the poverty-reducing
contributions of (1) cash from other family effort (property income, private pensions,
child support and alimony), and (2) government cash transfers (social insurance,
other cash benefits, and cash welfare). In general, the official poverty rates are about
20% lower than market income (earnings only) poverty rates. Figures 19 and 20
show only sources of pre-tax money income (income counted in determining official
poverty rates). They exclude noncash aid and tax benefits.


22 For updated statistics on cash welfare, see CRS Report RL32760, The Temporary
Assistance for Needy Families Block Grant: Responses to Frequently Asked Questions, by
Gene Falk.

Figure 19. Poverty Rates for All Related Children, 2007, by
Source of Income
25. 0%
21. 8% 21. 5% 21. 1%
20. 3% 20. 2%
18. 9% 18. 6% 18. 2% 17. 8%20. 0%
17. 6%
15. 0%
10. 0%
5. 0%
0. 0%
tyate srityentshersSSINF
onencomensionsupporonrivferecuymefit Otefitdd TA
s Alrty Ie Peild S Alimer Pransial SmploBenAddBenAAdd
ningropeivat Ch& OthTSocUne
Eard Pd PrAddAdddd dd
Ad Ad A A
Figure 20. Poverty Rates for Related Children in Single Parent
Families, 2007, by Source of Income


60. 0%
52. 4% 51. 9% 51. 4%
48. 5% 48. 3%50. 0%
45. 6% 45. 3% 44. 5% 43. 6%
43. 0%
40. 0%
30. 0%
20. 0%
10. 0%
0. 0%
necomesionspportnyrivateerscuritymentfitsOtherfitsd SSITANF
Aloty In Pend Sulimoer Pnsfl Seployenedd eneAddd
ingsopervate Chil& A OthTraocianemBABA
Earnd Prd PriAddAdddd Sdd U
A d A d A A
Source: Figures 19 and 20 prepared by the Congressional Research Service (CRS) with data from
the U.S. Census Bureau.

Conclusion
This report examined both the role of work and the role of government income
supports as factors affecting the official child poverty rate. Work is the principal
means by which families with children support themselves. Child poverty rates are
correlated with factors associated with wage rates, such as parent(s)’ educational
attainment and work experience; the amount of work done during the year; and
family type, which affects the likelihood that a family will have a second earner.
Without family earnings, a child is almost certain to be poor.
However, earnings alone often fail to overcome poverty. In 2006, one-third of
all poor children lived with at least one adult who was a full-time, full-year worker.
The economy has many jobs that pay low wages. Parents in such jobs may escape
poverty only through job advancement that results in higher wages, possibly only by
upgrading skills and education while working. Often, it takes work of both parents
to move their children and families out of poverty. This often comes at the cost of
arranging child care to permit both parents to work outside of the home.
Additionally, work is not always steady, with some parents experiencing spells of
joblessness for part of the year.
Access to the first tier of the “safety net,” social insurance, is restricted to
families with a current or previous wage earner. Social insurance benefits are
established through work, and are characterized as earned rights. Although these
programs are not targeted to the poor per se, these programs — which partially
replace earnings because of the death, old age, disability or involuntary
unemployment of a worker — have a significant impact on reducing poverty among
families with children. Over the past 20 years, the social insurance tier of the safety
net has remained relatively static. The protections of its cash benefit programs have
generally been maintained. However, the social insurance tier has not been revised
to take into account changes in the economy, family structure, and work patterns of
parents.
In contrast, the second tier of the “safety net,” programs targeted to low-income
families and persons, has undergone a radical transformation over the past 20 years.
Cash welfare for needy families with children has increasingly been tied to a
philosophy of mutual obligations — adult recipients have been expected to engage
in either work or activities to move them into work. In the wake of welfare reforms
made at the federal and state levels in the mid-1990s, the cash welfare rolls
plummeted, so that children in families receiving cash assistance represent a small
and decreasing share of both the overall and poverty child populations. Need-tested
assistance increasingly is paid to families only in the form of noncash benefits
(Medicaid and food stamps) whose value is not reflected in the official child poverty
statistics. These programs cast an uneven net of basic support to families. Moreover,
when parents receiving need-tested benefits go to work, benefits are often
significantly reduced as earnings increase, at times creating a perverse disincentive
to work. For many families with limited earnings capacity, the route toward self-
sufficiency can be a steep climb, yielding only small economic gain for additional
work effort.



Along with the transformation of need-tested benefits have come expansions of
refundable tax credits for families with children, particularly the Earned Income Tax
Credit (EITC). As a work support, the EITC helps offset the financial disincentives
relating to work that poor families have traditionally faced under welfare programs.
For some families with very low earnings, the EITC may supplement up to 40 cents
on every dollar a parent earns. EITC payments (either advance payments, tax
refunds, or reductions in tax liabilities that would otherwise be owed) are not
included in the official poverty statistics. However, for a single parent with two
children, who works full-time, all year at the 2006 federal minimum wage, those
earnings combined with food stamps and the EITC are sufficient to lift that family
to just above the poverty threshold.
Thus, recent changes to taxes and benefits targeted to low-income families have
sought to increase the rewards to work. However, the world of work does not
guarantee steady income. Working parents face risks to financially supporting their
children, stemming from job loss associated with either cyclical or structural changes
in the economy or interrupted periods of work because of their own or a family
members’ illness. Moreover, there remain a small but not insignificant group of
families with children where no parent has an attachment to the labor force. This
creates a series of policy dilemmas which include how to balance protections against
economic risk while maintaining a policy that rewards work, and helping children in
those families without a worker without undermining the efforts of working parents.



Appendix A: Support Tables to Selected Figures
in This Report
Table A1. Poverty Rates and Number of Poor Children,
by Family Type, 1959-2007
(Support Table for Figures 13-15)
Number of Poor Related
Poverty Rates for RelatedChildren under Age 18
Children Under Age 18(in thousands)
Female- Male- Female- Male-
Al l Headed P resent Al l Headed P r esent
Year Families Families Families Families Families Families
1959 26.9 72.2 22.4 17,208 4,145 13,063
1960 26.5 68.4 22.3 17,288 4,095 13,193
1961 25.2 65.1 21.0 16,577 4,044 12,533
1962 24.7 70.2 19.9 16,630 4,506 12,124
1963 22.8 66.6 18.0 15,691 4,554 11,137
1964 22.7 62.3 18.2 15,736 4,422 11,314
1965 20.7 64.2 15.7 14,388 4,562 9,826
1966 17.4 58.2 12.6 12,146 4,262 7,884
1967 16.3 54.3 11.5 11,427 4,246 7,181
1968 15.3 55.2 10.2 10,739 4,409 6,330
1969 13.8 54.4 8.6 9,501 4,247 5,254
1970 14.9 53.0 9.2 10,235 4,689 5,546
1971 15.1 53.1 9.3 10,344 4,850 5,494
1972 14.9 53.1 8.6 10,082 5,094 4,988
1973 14.2 52.1 7.6 9,453 5,171 4,282
1974 15.1 51.5 8.3 9,967 5,387 4,580
1975 16.8 52.7 9.8 10,882 5,597 5,285
1976 15.8 52.0 8.5 10,081 5,583 4,498
1977 16.0 50.3 8.5 10,028 5,658 4,370
1978 15.7 50.6 7.9 9,722 5,687 4,035
1979 16.0 48.6 8.5 9,993 5,635 4,358
1980 17.9 50.8 10.4 11,114 5,866 5,248
1981 19.5 52.3 11.6 12,068 6,305 5,763
1982 21.3 56.1 13.0 13,139 6,696 6,443
1983 21.8 55.4 13.5 13,427 6,747 6,680
1984 21.0 54.0 12.5 12,929 6,772 6,157
1985 20.1 53.6 11.7 12,483 6,716 5,767
1986 19.8 54.4 10.8 12,257 6,943 5,314
1987 19.7 53.7 10.6 12,275 7,019 5,256
1988 19.0 52.9 10.0 11,935 6,955 4,980
1989 19.0 51.1 10.4 12,001 6,808 5,193
1990 19.9 53.4 10.7 12,715 7,363 5,352
1991 21.1 55.4 11.1 13,658 8,065 5,593
1992 21.6 54.6 11.8 14,521 8,368 6,153
1993 22.0 53.7 12.4 14,961 8,503 6,458
1994 21.2 52.9 11.7 14,610 8,427 6,183
1995 20.2 50.3 10.7 13,999 8,364 5,635

1996 19.8 49.3 10.9 13,764 7,990 5,774



Number of Poor Related
Poverty Rates for RelatedChildren under Age 18
Children Under Age 18(in thousands)
Female- Male- Female- Male-
Al l Headed P resent Al l Headed P r esent
Year Families Families Families Families Families Families
1997 19.2 49.0 10.2 13,422 7,928 5,494
1998 18.3 46.1 9.7 12,845 7,627 5,218
1999 16.6 41.5 9.1 11,510 6,602 4,984
2000 15.6 40.1 8.6 11,005 6,300 4,705
2001 15.8 39.3 8.8 11,175 6,341 4,834
2002 16.3 39.6 9.2 11,646 6,564 5,082
2003 17.2 41.8 9.6 12,340 7,085 5,255
2004 17.3 41.9 9.7 12,473 7,152 5,321
2005 17.1 42.8 9.3 12,335 7,210 5,125
2006 16.9 42.2 9.0 12,299 7,341 5,958
2007 17.6 43.0 9.5 12,802 7,546 5,256
Source: Table prepared by the Congressional Research Service, based on data from the U.S. Census
B ureau.
Table A2. Employment Rates of Single Mothers and Married
Mothers, by Age of Youngest Child, March 1988 to March 2008
(percent of single mothers employed in March, Support Table for Figure 17)
Single MothersMarried Mothers
With aYoungestWith aYoungest
Child Child Yo ung est Yo ung est Child Child Yo ung est Yo ung est
underunder AgeChild AgeChild AgeunderunderChild AgeChild Age
YearAge 1833 to 5 6 to 17Age 18Age 3 3 to 5 6 to 17
1988 57.4 35.1 52.9 69.1 61.8 50.7 58.1 69.6
1989 58.2 37.9 53.1 70.0 63.0 51.4 60.8 70.6
1990 60.3 38.0 61.0 70.9 63.4 52.7 60.9 70.8
1991 58.1 36.6 55.7 70.2 63.1 52.7 60.5 70.5
1992 57.3 35.2 54.1 69.8 63.9 53.1 59.4 71.9
1993 57.3 35.1 54.8 70.1 63.9 53.2 59.4 71.9
1994 58.0 37.7 55.2 69.3 65.5 56.0 61.2 72.6
1995 61.1 43.1 58.5 70.5 67.1 57.4 63.9 73.4
1996 63.5 44.7 60.4 72.9 67.6 58.2 63.3 74.2
1997 65.6 51.5 64.3 72.0 68.5 58.3 64.4 75.2
1998 68.8 54.8 63.7 76.4 67.9 58.3 64.1 74.2
1999 70.7 55.8 69.8 77.1 67.9 57.0 63.1 75.1
2000 72.8 59.1 72.7 78.5 68.4 56.8 66.0 75.0
2001 73.0 56.1 74.4 79.8 68.5 57.1 64.7 75.4
2001r 72.5 57.6 71.3 79.1 68.0 56.0 64.2 75.1
2002 71.2 57.9 71.0 76.3 66.7 54.9 61.7 74.1
2003 69.6 54.8 69.3 75.4 66.3 53.5 61.7 74.2
2004 69.7 54.1 69.5 75.7 65.3 52.4 62.3 72.7
2005 68.9 53.7 66.7 75.7 65.9 54.9 61.9 72.8
2006 69.6 57.0 68.0 75.1 66.1 55.4 61.8 73.1
2007 70.0 56.5 68.6 76.0 67.3 56.9 63.0 74.2
2008 69.1 54/5 68.5 75.5 67.0 56/1 63.6 73.7
Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau
Mar. 1988 to 2008 Current Population Survey (CPS) data.
Note: r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived
we i ght s.



CRS-34
Table A3. Annual Hours Worked by Poor Mothers in Mother-Only Families
at Various Percentile Rankings, 1987 to 2007
(Support Table for Figure 18)

50th th th th th


10th20th 30th40thPercentile6070 80 90
Year P ercentile P ercentile P ercentile P ercentile (Median) P ercentile P ercentile P ercentile P ercentile
1987 0 0 0 0 0 80 450 1,040 1,680
1988 0 0 0 0 0 120 480 936 1,716
1989 0 0 0 0 0 128 480 1,040 1,664
1990 0 0 0 0 0 208 600 1,080 1,680
1991 0 0 0 0 0 192 546 1,040 1,800
iki/CRS-RL326821992 0 0 0 0 0 120 550 1,040 1,664
g/w1993 0 0 0 0 0 120 480 1,040 1,760
s.or1994 0 0 0 0 0 252 640 1,150 1,820
leak1995 0 0 0 0 0 340 784 1,320 2,080
://wiki1996 0 0 0 0 80 432 800 1,300 1,840
http1997 0 0 0 0 255 600 1,040 1,456 2,080
1998 0 0 0 21 400 700 1,040 1,584 2,080
1999 0 0 0 132 480 840 1,200 1,600 2,080
2000 0 0 0 60 480 875 1,280 1,760 2,080
2001 0 0 0 0 320 780 1,144 1,664 2,080
2002 0 0 0 0 320 780 1,170 1,664 2,080
2003 0 0 0 0 260 660 1,040 1,560 2,080
2004 0 0 0 0 225 640 1,040 1,600 2,080
2005 0 0 0 0 180 600 1,040 1,560 2,080
2006 0 0 0 0 209 680 1,152 1,640 2,080
2007 0 0 0 0 320 784 1,200 1,610 2,080
Estimates prepared by the Congressional Research Service based on U.S. Census Bureau, Mar. 1988 through 2008 Current Population Survey (CPS) data.