Impact of Government Policy on Poor Children

The "Impact of Government Policy on Poor Children" focuses on the substantial effects of U.S. government policies on children living in poverty. With the United States reporting a notably high childhood poverty rate—second only to Romania among industrialized nations—this topic addresses critical factors such as social and fiscal policies, welfare systems, and the political economy of anti-poverty initiatives. It highlights childhood poverty as a significant demographic issue, emphasizing the long-term consequences poverty has on children's development, well-being, and future economic productivity.

The overview also points to the complexities in measuring poverty, noting how definitions and thresholds can vary, impacting the effectiveness of policies aimed at alleviating poverty. The evolution of American welfare policy, particularly post-1996 reform, is examined to understand its implications on the safety net for poor families. As poverty rates continue to rise, particularly among children, discussions about the effectiveness of current policies and the need for increased social spending become crucial. This exploration aims to inform potential solutions, advocating for policies that could enhance support for vulnerable children and families in the U.S.

Published in: 2021

By: Flynn, Simone I.

Subject Terms

Impact of Government Policy on Poor Children

Abstract

This article will focus on the impact of American government policy on poor children. While childhood poverty is a global concern, the United States, as reported by UNICEF in 2012, has the second-highest rate of childhood poverty among industrialized Western countries. Reasons for the high childhood poverty rate in the United States will be explored. Areas of discussion and analysis include American social and fiscal policies, approaches to defining and measuring the childhood poverty rate, the political economy of American anti-poverty policies and American welfare state, and the present and future impact of American anti-poverty policies on poor children. United States government anti-poverty policies will be explored within the larger context of international anti-poverty policies and initiatives.

Overview

Government policies impact poor children in different ways and in varying amounts depending on the scope and type of the public policy initiatives. Governments of industrialized countries use social, fiscal, and urban policies to combat childhood poverty and its related conditions. Childhood poverty is considered by governments and international development organizations to be an especially important demographic: a disproportionately high rate of childhood poverty tends to influence and often limit adult economic production and quality of life (Ashworth, 1994).

Poor children are a global and national concern. The United Nations Convention on the Rights of the Child is a treaty that defines the social, civil, economic, health, and cultural rights of children. It went into effect in 1990 and as of 2018 has been ratified by 196 countries—every member of the United Nations except the United States, which has signed but not ratified it. It serves as a global pact against childhood poverty and its related conditions. Articles 4 and 27 of the Convention on the Rights of the Child together establish the elimination of child poverty as a global goal (Corak, 2006). Globally, significant childhood poverty exists in all industrialized countries. In 2012, the child poverty rate was lowest in Iceland, Finland, and Cyprus (4.7–6.1 percent) and highest in Romania (25.5 percent). The United States is second highest, with 23.1 percent. The child poverty rate is related to a government's social expenditures as measured by a percentage of the gross domestic product (GDP). Countries with higher social expenditures have significantly lower childhood poverty rates. Data illustrates that high social expenditures do not negatively impact a country's fiscal performance. For example, a country such as Finland with high social expenditures and a low child poverty rate continues to compete in the global marketplace with high competitive productivity rates and income growth (Allegretto, 2006).

Measuring Childhood Poverty. Childhood poverty, and poverty in general, is measured through poverty rates and poverty lines. These measures are subjective and influenced by the values and standards of the countries in which they are created. There are absolute poverty lines and relative poverty lines. There are fixed poverty lines and moving poverty lines. Budget studies illustrate that poverty lines must be developed within the context of the consumption norms, habits, and patterns of particular communities and must be updated to reflect inflation and consumption needs. Governments track economic patterns and changes and set poverty rates and poverty lines. That said, poverty lines are value judgments and require input and approval from citizens. Corak developed a set of six principles to serve as a guide for countries in best practice of poverty-line development (2006):

Avoid unnecessary complexity
Measure material deprivation directly—areas of direct measurement include income, health, nutrition, clothing, housing, services, and opportunities.
Set a poverty line determined by social norms.
Implement a consistent monitoring system.
Establish a target with which to measure progress.
Provide leadership and increase public support for poverty reduction.

Countries use these guidelines differently. Indeed the practice of poverty rate development varies greatly between countries. Countries either do not define or measure child poverty, attempt but fail at the complicated task of child poverty measurement, or establish clear poverty rates, definitions, measures, monitoring, and targets.

The US federal government established a base-line poverty income threshold in the 1960s at three times the necessary income for maintaining an economy food plan created by the US Department of Agriculture for families of all different sizes. The poverty income threshold is revised annually using the consumer price index to incorporate and account for inflation. The United States began revising consumer trends to calculate consumer price indices every two years beginning in 2002 (Corak, 2006). Governmental agencies use the poverty income threshold rates, as well as the poverty rates measured and determined annually by the US Census Bureau, to determine eligibility criteria for social welfare programs and public assistance.

Critics of the US government's measurement approach argue that the poverty income threshold (and its annual adjustment for inflation) is an inaccurate and partial measurement tool for documenting childhood poverty. Criticisms of the poverty income threshold include the following (Lichter, 1997):

The poverty income threshold does not incorporate consumption by children, near-income such as food stamps, and in-kind public assistance such as subsidized school lunches.
The poverty income threshold does not account for the geographic differences in the costs of feeding, clothing, and housing children.
The poverty income threshold does not account for income representing costs associated with working such as childcare.
The poverty income threshold does not consider economies of scale or quantify poverty income for different family sizes or adult-children composition.
The poverty income threshold does not reflect increasing share of children reared by single parents.
The poverty income threshold implicitly presumes that parental resources are equally invested in all children.

Applications

History & Political Economy of American Welfare Policy. The ecology of the American family changed significantly in the twentieth century due to industrialization and to rising divorce rates and out-of-wedlock birth rates. The changes in the American family have created both new patterns of poverty and new social policy to aid people (particularly children) in need. The American government's efforts to aid poor children come primarily through the welfare system. The political economy of American welfare (or anti-poverty) policy illustrates the interrelationship between political institutions, the political environment, market forces and structures, and morals and values.

Social policy in the United States serves and functions as a social safety net for citizens. The United States has a welfare state that serves, protects, and provides for its members through social welfare provisions, social policy, social programs, and social welfare initiatives. Public sector (or governmental) social policy and support became common practice in the early twentieth-century. Twentieth-century socio-economic history is characterized, in part, by a switch in national perspective from individualism to interdependence. The social safety net switched from private sector (family, charity, community) to public sector (social policies such as welfare). The government became a source for social welfare provisions, such as public education, welfare payments, pensions, and social security for disadvantaged groups such as the poor, elderly, disabled, and students.

The modernization argument for social policy contends that the twentieth-century economic expansion and transition to industrialized production created the reasons and means to finance social policy and programs in the United States. The needs of populations changed as society transitioned from small-scale production to industrialized production. Economic development, created by industrialization, increased work force, wage labor, the prevalence of isolated nuclear families, and created the need for social policy. The new work force, dependant on income rather than agriculture or small business, was at risk from problems associated with income loss. The government (along with citizen self-support paid through taxes) subsidized or insured the risk that citizens took by joining and working in industrialized economies and societies, through social policy. Twentieth-century America could afford and desperately needed social policy (Amenta & Bonastia, 2001).

Significant social policy of the twentieth-century includes social security, welfare, Medicare, Medicaid, and public housing. America’s welfare system, the cornerstone of much US social policy, began in 1935 with President Franklin D. Roosevelt’s enactment of a social welfare program called Aid to Dependent Children (ADC) and expanded in the 1960s when President Johnson added Medicare, Medicaid, and public housing programs. The American welfare system as it was first established, based on cash assistance policies, historically forced parents with few job opportunities to decide between being on welfare and working and created little opportunity or incentive to leave poverty. In 1996, President Clinton reformed the social policies that structure the American welfare state or system to increase work requirements and reduce overall welfare dependence. The 1996 reform was a significant drop in government’s protective role.

The 1996 federal welfare reform (entitled "Personal Responsibility and Work Opportunity Reconciliation Act") replaced the joint federal-state cash assistance program known as Aid to Families with Dependent Children (AFDC) with a new block grant called Temporary Assistance for Needy Families (TANF). The new block grants to states ended most federal welfare regulations and gave local governments the power to reshape their antipoverty policies based on their local needs, resources, and values (Sherman, 1999). The reform included instituted time limits (continuous participation time limit of two years and lifetime participation time limit of five years) and new work requirements for recipients would be stipulated (Lichter, 1997).

The federal welfare law of 1996 has had numerous affects on federal-state relationships, budgets, and children. As described by Sherman:

States are requiring far more recipients to work using a variety of threats, encouragements, penalties, and services.
States are combining services and cash assistance to permit the least advantaged families to work their way out of poverty.
States have increased their investments in child care, transportation, medical coverage, substance abuse treatment, and other services for families who could not otherwise find stable work (Sherman, 1999).

Unfortunately, childhood poverty rates have increased rather than decreased as a result of the welfare reform. State policies, though tailored to local needs, have failed to fully provide a safety net for poor families with children and working families who remain poor. State policy is based on the assumption that living-wage jobs are available to all citizens. As a result, the five-year lifetime time limit on welfare leaves many parents without financial resources or government support to provide materially (and sometimes emotionally or psychologically) for their children.

Issues

The Impact of American Anti-Poverty Policies on Poor Children. Child poverty rates are increasing in the United States and are higher than comparative rates in 1960 and higher than current rates in other industrialized Western countries. According to Lichter, there are numerous possible reasons why child poverty rates in the United States have increased since 1960:

Changing family structure and family size
Changing parental work and earnings
Changing public assistance and government policy (1997)

The emphasis on different causes for the growth in child poverty rates implies different political agendas and different policy solutions. In reality, the explanations and causes of childhood poverty vary for different groups of children such as whites and blacks, children in single-parent families and those living with two parents, and children of working and nonworking parents.

The impact of government policy on poor children is a much-debated topic. The anti-welfare perspective argues that government assistance corrupts and undermines family structures and values. Critics of the traditional welfare model argue that welfare undermines the traditional family by providing support to single mothers. Critics of traditional welfare model also believe that welfare provides incentives for people to avoid working and exacerbates the impoverished position of children who live in households headed by females. The pro-welfare (and pro-social spending) perspective argues that society needs more social spending and government involvement. Critics of welfare reduction argue that the federal welfare reform has negatively impacted poor children and pushed many families deeper into poverty.

The chief characteristics of modern child poverty in America are long-term poverty and dependence on public aid. Poor children today are more likely than in the past to be chronically poor and government dependent. The income composition of poor families includes welfare, AFDC, and cash assistance from the government. This dependence on welfare or other public assistance programs is a characteristic not present among poor children thirty years ago. The experience of American children living in poverty is not homogeneous. There are six types or patterns of poverty that affect children and are based on number, duration, and spacing of poverty and out-of-poverty spells. The patterns include transient poverty, persistent poverty, permanent poverty, occasional poverty, recurrent poverty, and chronic poverty (Ashworth, 1994):

Transient poverty: one short poverty spell lasting a maximum of one year.
Persistent poverty: one non-short poverty spell lasting over one year and at least one out-of-poverty spell.
Permanent poverty: one unceasing poverty spell lasting continuously for at least fifteen years.
Occasional poverty: repeated short poverty spells all lasting at least one year.
Recurrent poverty: multiple poverty spells interspersed by non-short out of poverty spells.
Chronic poverty: multiple poverty spells some lasting over one year interspersed with short out-of-poverty spells lasting one year.

The variables of duration, degree, intermittence, and continuity affect poor children. Recurrent poverty is the most common childhood poverty pattern. Children who experience periods of intermittent relative prosperity may collect (material, emotional, and psychological) resources that they can use during periods of scarcity. Chronically and permanently poor children face the most difficult circumstances and the grimmest long-term prospects.

Childhood poverty, no matter what the cause, harms children both in the moment and in the future. American children living at or below the poverty line are considered to be "at risk"; lacking material, psychological, and emotional resources. There are significant short and long-term consequences of poverty for children and society. Examples include (Lichter, 1997):

Childhood poverty impairs physical growth, cognitive development, and socio-emotional functioning. Poor children are also more likely than average-income children to be physically abused.
The incidence, length, and continuation of poverty during childhood have significantly detrimental effects on children’s IQ and potential for educational success.
The incidence, duration, and chronicity increases their adult welfare dependency and has negative effects on later adult productivity.

Conclusion

Poverty rates are increasing in the majority of industrialized Western countries. The increasing rates of poverty in America suggest that eradicating childhood poverty is not a primary public priority. Corak argues that the lack of effective child poverty reducing policy is due to multiple factors (2006):

Lack of clarity in a policy-relevant definition of poverty
Lack of understanding of how families and labor markets work to determine poverty rates
Lack of understanding of the priorities embedded in government tax and transfer programs (Corak, 2006, p. 44).

The US government's 1960s War on Poverty campaign was based on the idea that poverty was a homogeneous entity and problem (Ashworth, 1994). Today, poverty is currently understood as a dynamic and often particular problem and force. That said, the United States spends less of its gross domestic product on social spending than any other industrialized Western country. The American anti-poverty policies include social spending programs such as Head Start, nutrition programs such as subsidized school lunches, immunization programs, public education, and structural policies of welfare and tax incentives. Despite anti-poverty policies, childhood poverty persists and grows in America. Childhood poverty, affecting one out of every five children in the United States in 2011, is a seemingly intractable problem.

Poverty puts children at higher risk for infant death, obesity, poor nutrition, lead poisoning, and related health problems of stunted growth, kidney damage, and learning delays, failing to finish high school, crime involvement, and low adult earning potential. In an effort to positively impact the lives and futures of poor children, local, state, and federal government may consider increasing social spending to levels similar to other industrialized Western countries. Examples of additional spending and policy areas include child-care, wage support, job training, and child support. These social services along with others could return the social safety net for poor children and poor families in general that was reduced or eliminated by the welfare reform of 1996 (Sherman, 1999).

While there is debate about how to measure and define poverty, increased social spending and targeted anti-poverty policies in areas such as those described above will potentially save America money and improve the lives of poor children. “The high cost of childhood poverty to the United States suggests that investing significant resources in poverty reduction might be more cost-effective over time than we previously thought. Of course, determining the effectiveness of various policies requires careful evaluation research in a variety of areas. But a range of policies—such as universal pre-kindergarten (or pre-K) programs, various school reform efforts, expansions of the earned income tax credit (EITC), and other income supports for the working poor, job training for poor adults, higher minimum wages and more collective bargaining, low-income neighborhood revitalization and housing mobility, marriage promotion, and faith-based initiatives—might all be potentially involved in this effort. Given the strong evidence that already exists on some of these efforts (like high-quality pre-K and the EITC), some investments through these mechanisms seem particularly warranted” (Holzer, 2007).

Terms & Concepts

Childhood poverty: The persistent or intermittent condition of living below the poverty line as established by a national government or international organization.

Federal government: A form of government in which a group of states recognizes the sovereignty and leadership of a central authority while retaining certain powers of government.

Fiscal policy: The expenditures by federal, state, and local governments and the taxes levied to finance these expenditures.

Gross domestic product (GDP): The total market value of all the goods and services produced within a certain country during a specific time period.

Poverty rate: The percentage of people (or families) who are below the poverty line.

Public policy: The basic policy or set of policies that serve as the foundation for public laws.

Political economy: The interactions between political processes and economic variables such as economic policies.

Social policy: Policy, enacted through social welfare programs and serving as a social safety net, that regulates and governs human behavior in areas such as general morality and quality of life.

Social welfare: The relationship and responsibilities of governments to their members.

Social welfare provision: Government program that provides a minimum level of income, service, or other support for disadvantaged groups such as the poor, elderly, disabled, and students.

Welfare state: The social programs and public institutions providing unemployment support, aging population assistance, public assistance, and health, housing, and educational benefits to citizens.

Bibliography

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Impact of Government Policy on Poor Children

On this Page

Subject Terms

Impact of Government Policy on Poor Children

Abstract

Overview

Applications

Issues

Conclusion

Terms & Concepts

Bibliography

Suggested Reading