The NAS Report Provides Concrete Proposals to Reduce Child Poverty, But Will the U.S. Accept the Challenge?

A growing body of evidence shows that living in poverty has a detrimental effect on children’s development and wellbeing. Children who experience poverty, especially at young ages and over long durations, have lower academic achievement, greater behavioral problems, and ultimately attain lower socioeconomic status in their lifetime. Yet, it is not just that poverty is correlated with other circumstances that are detrimental for children (e.g., low parental education and unstable families). There is evidence that poverty has a negative causal effect on child outcomes, with the most compelling experimental evidence focused on children’s academic achievement.

Fortunately, a number of social programs and policies have been shown to offset the harmful effects of poverty on children. Programs that directly increase family income (such as the Earned Income Tax Credit) or that provide in-kind support in the form of food or medical care (such as the Supplemental Nutrition Assistance Program and Medicaid) improve educational and health outcomes for children. Yet, compared to other industrialized countries, U.S. social welfare provision is modest, leaving a higher fraction of children in poverty. This is concerning not only because it inhibits the development and well-being of individual children and flies in the face of American ideals about “equality of opportunity” and basic fairness, but also because poverty inhibits the next generation’s ability to grow up to be responsible workers, citizens, and taxpayers. Moreover, it diminishes economic growth at the aggregate level: it is simply inefficient to not have individuals be able to reach their full potential and, thereby, fully participate in and contribute to society, including earning money (and paying taxes!), to the greatest extent possible.

At the direction of Congress in late 2015, the National Academies of Sciences, Engineering, and Medicine (NAS) appointed a Committee on Building an Agenda to Reduce the Number of Children in Poverty by Half in 10 Years. The initiative brought together 15 of the nation’s leading scholars and policy analysts focused on poverty and social welfare. (Full disclosure: Carlson is married to one of the NAS Committee members, Tim Smeeding.) Ranging in their disciplinary perspectives and ideological views, these experts came together for the important task of developing a ‘roadmap’ for reducing child poverty in the U.S. Over nearly two years of work together, the committee reviewed the research evidence about how poverty affects child well-being, examined the extent to which major programs for children and families are shown to reduce poverty, and developed recommendations for how to reduce U.S. child poverty by half over the next 10 years. Their report, A Roadmap to Reducing Child Poverty, was released earlier this year.

Overall, the Committee found that reducing child poverty in the U.S. is an achievable goal. They examined 10 program and policy options by which to do so, spanning four categories: 1) work incentives and supports, 2) changing existing safety net programs, 3) introducing new programs, and 4) changing immigrants’ access to programs. While they found that no single policy option could reduce child poverty by half, they identified two “packages” of changes—a means-tested supports and work package, and a universal supports and work package—that could reach the goal of reducing child poverty rates by at least 50 percent. These would come at an absolute annual cost of $90 to $110 billion. Notably, even the most expensive of these options is far less expensive than the estimated annual cost to the U.S. economy of child poverty, which ranges from $500 billion to $1 trillion (or 4 to 5% of GDP). While they considered two additional packages that were considerably less expensive—a work-focused package ($9 billion) and a work-based and universal support package ($45 billion)—neither came close to achieving the goal of halving child poverty. 

In reading the excellent work of the Committee, we were struck by several points. It is notable that work alone is not enough to make a serious dent in child poverty rates—the work-focused package would reduce the child poverty rate by 2.5 percentage points (or 19%, but nowhere near the 50% goal). So, yes, the cost of making work-related changes to the safety net is relatively low, at less than $10 billion, but the return is also low. To substantially reduce child poverty, additional investments will be required, which could come in the form of means-tested (focused on those below a minimum threshold of income) or universal (available to all, even those who are not economically disadvantaged) supports.

We favor more universal programs (such as a universal child allowance) because they provide a more secure economic foundation for children, have much lower social stigma, and generate greater political support (particularly once enacted). Universal approaches are also far less administratively burdensome to both government and families and entail fewer administrative costs. Much like the popularity of Social Security, which efficiently provides economic support to elders after the end of their working years—and substantially reduces elderly poverty—a child allowance would enhance children’s economic foundation as they grow and develop and prepare to enter the labor force. While the universal package is expensive, the Committee estimates it would reduce child poverty by 52 percent. 

The NAS report is grounded in a staggering amount of rigorous evidence about the negative effects of poverty and potential pathways forward for reducing poverty and helping all children reach their full potential. Yet, will anything happen? Ultimately, it depends on our political will as a nation. What value does our society place on supporting children? Do we believe that all children deserve a fair chance at economic and social success? Do we really intend for there to be equality of opportunity in the U.S.?

Moving forward from the NAS report, the key question, as we see it, is: how do we get people to prioritize supporting children amidst an incredibly polarized political context? And here, we believe that poverty reduction should be a key goal for two different reasons. 

First, social justice demands that children be given a chance to reach their full potential. As Nelson Mandela said, “There can be no keener revelation of a society’s soul than the way in which it treats its children.” 

Second, it’s economically rational and efficient to reduce child poverty—it would save money and substantially grow our economy! Thus, there are very different but coterminous reasons to make a serious investment in reducing child poverty that should appeal to both ends of the political and ideological spectrum. Moreover, while cutting child poverty in half will clearly be expensive, it is eminently affordable if prioritized over other public goals.

Poverty has not (yet) played a major role in the 2020 presidential campaign—but it should. The NAS report shows that it’s possible to significantly reduce the economic deprivation that many of the youngest members of society experience and lays out a roadmap for quickly and permanently doing so. The question is will we as a society take up this challenge?

Lonnie Berger is Director of the Institute for Research on Poverty and Vilas Distinguished Achievement Professor of Social Work, and Marcia Carlson is Director of the Center for Demography and Ecology, and Professor of Sociology, at the University of Wisconsin-Madison.