Children in Poverty: Profile, Trends, and Issues

Publication Date: December 2004

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Population and demographics; Social conditions

Type:

Abstract:

Since 1996, when Congress enacted the block grant program of Temporary Assistance for Needy Families (TANF), family cash welfare rolls have fallen by more than 50%, the employment rates of single mothers in the general population have risen dramatically, and the number of poor children has declined by more than 1 million. In these years child poverty rates decreased for both lone-mother families and married-couple families, with a relatively sharper decline for the former group. At the same time, however, the incidence of poverty increased overall among families who have at least one full-time, year-round worker.

Dramatic gains have occurred in work by lone mothers. Since 1999, the employment rates of single mothers have topped those of married mothers, even among mothers with a child under age three. However, some have joined the working poor. In 2003, 15% of the children whose single mother worked year round at full-time jobs were poor. Annual hours worked by lone mothers peaked in 2000. That year 20% worked about 1,800 hours or more. The rise in mothers' work makes some of them potentially eligible for unemployment insurance in case of involuntary job loss.

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. In 2003, the rate was 17.2% (representing 12.3 million children). Who are these poor children? Fifty-seven percent are in families headed by the mother; 34% have no family worker, but 30% are in families with a year-round full-time worker; and 25% are in families headed by an immigrant.

The social safety net for children consists of (1) earnings-based social insurance and tax credits and (2) need-based transfers of cash and noncash benefits. Workrelated monthly benefits from social security are paid to 3.8 million children (almost 5% of all U.S. children) whose breadwinner is dead, disabled, or aged. In Fiscal Year (FY) 2003, $34 billion in Earned Income Tax Credit refunds went to 19 million families with earnings (mostly working parents), and child tax credit refunds for working parents totaled $6 billion. Need-based monthly cash welfare benefits now go to about 5 million children (4.1 million from TANF and 0.9 million from Supplemental Security Income -- SSI). (Also, large outlays from TANF funds are made for child care, job training, and various other services.)

The Census Bureau's official count of the poverty population is based on money income before taxes and any capital gains. Thus, it includes social insurance cash payments and cash welfare. However, it excludes noncash aid and tax credits. If families' only cash income consisted of earnings, child poverty rates generally would be about one-fourth higher than the official figures.

This report, which will be updated, examines trends in the economic well-being of children. It presents data on official poverty among children and employment rates of mothers.