America's Children: Key National Indicators of Well-Being, 2007
Child Poverty and Family Income
Children in low-income families fare less well than children in more affluent families on many of the indicators presented in this report. Compared with children living in families at or above the poverty line, children living below the poverty line are more likely to have difficulty in school, to become teen parents, and, as adults, to earn less and be unemployed more frequently.36, 37 This indicator is the official poverty measure for the United States, which is based on Office of Management and Budget Statistical Policy Directive 14.38
Indicator ECON1.A: Percentage of related children ages 0–17 living in poverty by family structure, 1980–2005
NOTE: Estimates refer to children ages 0–17 who are related to the householder. In 2005, the average poverty threshold for a family of four was $19,971.
SOURCE: U.S. Census Bureau, Current Population Survey, 1981 to 2006 Annual Social and Economic Supplements.
- In 2005, 18 percent of all children ages 0–17 lived in poverty, unchanged from 2004. The poverty rate was higher for Black children and for Hispanic children than for White, non-Hispanic children. In 2005, 10 percent of White, non-Hispanic children lived in poverty, compared with 35 percent of Black children and 28 percent of Hispanic children.3
- The percentage of children living in families with incomes below their poverty threshold was 17 percent in 2005, unchanged from 2004. The official poverty rate for children has fluctuated since the early 1980s: it reached a high of 22 percent in 1993 and decreased to 16 percent in 2000.39
- The poverty rate for children living in female-householder families (no spouse present) also fluctuated between 1980 and 1993, then declined between 1993 and 2000 more than the rate for all children in families. In 1993, 54 percent of children living in female-householder families were living in poverty; by 2005, this proportion was 43 percent.
- Children ages 0–5 were more likely to be living in families with incomes below the poverty line than children ages 6–17. In 2005, 20 percent of children ages 0–5 lived in poverty, compared with 16 percent of older children.
- Children in married-couple families were much less likely to be living in poverty than children living only with their mothers. In 2005, 9 percent of children in married-couple families were living in poverty, compared with 43 percent in female-householder families.
- In 2005, 5 percent of White, non-Hispanic children in married-couple families lived in poverty, compared with 33 percent of White, non-Hispanic children in female-householder families. Thirteen percent of Black children in married-couple families lived in poverty, compared with 50 percent of Black children in female-householder families. Twenty percent of Hispanic children in married-couple families lived in poverty, compared with 50 percent of Hispanic children in female-householder families.
The distribution of the income of children's families provides a broader picture of children's economic situations.
Indicator ECON1.B: Percentage of related children ages 0–17 by family income relative to the poverty line, 1980–2005
NOTE: Estimates refer to children ages 0–17 who are related to the householder. The income classes are derived from the ratio of the family's income to the family's poverty threshold. A child living in extreme poverty is defined as a child living in a family with income less than 50 percent of the poverty threshold. Below poverty, but above extreme poverty is defined as 50–99 percent of the poverty threshold. Low income is defined as 100–199 percent of the poverty threshold. Medium income is defined as 200–399 percent of the poverty threshold. High income is defined as being at or above 400 percent of the poverty threshold. For example, a family of four with two children would be in extreme poverty if their income was less than $9,903 (50 percent of $19,806). The same family would be classified as low income if their income was at least $19,806 and less than $39,612.
SOURCE: U.S. Census Bureau, Current Population Survey, 1981 to 2006 Annual Social and Economic Supplements.
- In 2005, more children lived in families with medium income (32 percent) than in families in other income groups. Fewer children lived in families with low income and with high income (21 and 30 percent, respectively).
- The percentage of children living in families with medium income was lower in 2005, at 32 percent, than in 1980, at 41 percent. Conversely, the percentage of children living in families with high income was higher in 2005, at 30 percent, than in 1980, at 17 percent.
- The percentage of children living in families classified as in extreme poverty was 7 percent in 1980. This percentage rose to 10 percent in 1992 and decreased to 7 percent in 2005. The percentage of children who lived in families with very high incomes (600 percent or more of the poverty threshold) was three times higher in 2005 than in 1980 (14 percent and 4 percent, respectively).
ECON1A HTML Table, ECON1B HTML Table
ECON1A Excel Table, ECON1B Excel Table
3 Federal surveys now give respondents the option of reporting more than one race. Therefore, two basic ways of defining a race group are possible. A group such as Black may be defined as those who reported Black and no other race (the race-alone or single-race concept) or as those who reported Black regardless of whether they also reported another race (the race-alone-or-in-combination concept). This report shows data using the first approach (race alone). Use of the single-race population does not imply that it is the preferred method of presenting or analyzing data. The Census Bureau uses a variety of approaches. Data on race and Hispanic origin are collected separately. Persons of Hispanic origin may be of any race.
36 Duncan, G. and Brooks-Gunn, J. (Eds.). (1997). Consequences of growing up poor. New York, NY: Russell Sage Press.
37 An, C., Haveman, R., and Wolfe, B. (1993). Teen out-of-wedlock births and welfare receipt: The role of childhood events and economic circumstances. Review of Economics and Statistics, 75(2), 195–208.
38 The measurement of poverty used in this report is the official poverty measure used by the U.S. Census Bureau. A child is living below poverty if the child lives in a family with before-tax cash income below a defined level of need, called the poverty line. The official poverty line in use today was devised in the early 1960s based on the minimum cost of what was considered to be a nutritionally adequate diet. As originally defined, the poverty index signified the inability of families to afford the basic necessities of living, based on the budget and spending patterns of those Americans with an average standard of living. Since then, the poverty line has been updated annually for inflation using the Consumer Price Index for all urban consumers. The poverty line depends on the size of the family and the number of children in the family.
A 1995 report by the National Research Council recommended changing the definition of both the poverty thresholds and the resources that are used to measure poverty. Its recommendations included the following:
Defining income: On the one hand, the definition of family income should be expanded to include other important resources of purchasing power, such as the earned income tax credit, food stamps, and housing subsidies. On the other hand, some necessary expenditures that reduce a family's resources available for basic consumption needs should be subtracted from income, such as taxes, necessary child care and other work-related expenditures, child support payments, and out-of-pocket medical expenditures.
Setting a threshold: Poverty thresholds should be adjusted to provide a more accurate measure of family income requirements. First, the consumption bundle used to derive thresholds should be based on food, clothing, shelter, and utilities, not food consumption alone. Second, thresholds should reflect regional variations in housing costs. Third, thresholds should be adjusted for family size in a more consistent way than is currently done. Finally, thresholds should be updated to reflect changes in expenditure patterns over time.
Recent U.S. Census Bureau reports used key elements of the National Research Council proposal to estimate alternative poverty rates from 1990 to 1997. These estimates produced increases in child poverty from 1990 to 1993 similar to, and decreases in poverty from 1993 to 1997 somewhat larger than those under the official measure. These changes reflect the fact that the new measure more completely accounts for in-kind transfers, such as food stamps and housing benefits, and for work-related expenditures. As a result, the new measure tends to decrease the relative poverty rate of children who are more likely to live in families that receive in-kind transfers, and to increase the relative poverty rate of children living with employed low-income persons with higher work-related expenses.
39 The 1993 child poverty rate is not significantly different from 1991 and 1992.