Three decades ago, a team of researchers at Duke University set off to follow a group of schoolchildren in a stretch of rural North Carolina that happened to include a small reservation. Soon after, the Eastern Band of Cherokee Indians opened a casino and began sharing the profits, about $4,000 per adult each year, with every household in the tribe — essentially creating a local version of guaranteed income.
What followed should interest anyone concerned about America’s high levels of child poverty or worried how poor children will fare amid the worst unemployment crisis since the Great Depression.
The Cherokee children did better than their unsubsidized counterparts — much better, the researchers found. They completed more schooling. They committed fewer crimes. They had fewer problems with anxiety, depression and substance abuse. The poorest children benefited most. Researchers are still following the kids, who are now in middle age.
The Great Smoky Mountains Study is part of a trove of evidence that has reshaped expert views of child poverty, and it is ripe with lessons today, when the number of needy children is soaring.
As conveyed last year in a landmark report by the National Academies of Science Engineering and Medicine, a growing scholarly consensus can be expressed in two parts. One is that even brief stays in poverty can cause children lifelong harm, especially when the children are young. The other is that money helps — subsidizing the incomes of poor families leads their children on average to better health, more schooling and higher earnings as adults.
That may sound obvious, but the idea that giving poor parents money (or as skeptics would say, “welfare”) improves their children’s chances has been vigorously contested and until recently difficult to prove.
While the coronavirus was initially said to spare the young, that no longer appears to be true medically, and economically it never was — certainly not for the 10 million children below the poverty line and even larger numbers just above it. With hunger rising, classrooms closing and parental stress surging, the pandemic is a threat to low-income children of epochal proportions, one that could leave an entire generation bearing its scars.
Most rich countries do more to protect kids. At least 17 offer child allowances, income supplements to families with children, generally paid to both the poor and middle class in recognition that society has an interest in seeing children thrive. A few years ago, Canada increased its maximum payment to about $4,800 per child per year (in American dollars), and quickly reduced child poverty by a third. Britain has been paying child allowances since the end of World War II.
Until recently, there seemed little chance the United States would do the same, given its high tolerance for child poverty and distrust of income guarantees. Child poverty ranks curiously low even on lists of progressive concerns. It hasn’t been an issue in the year’s outcries over racial injustice. Children don’t lobby, contribute, protest or vote. No vanguards unfurl banners to proclaim that “Young Lives Matter.” Child poverty drew little attention in the Democratic primaries. Joe Biden’s website pledges economic justice but hardly mentions poor kids.
Still, the movement to create a child allowance was quietly advancing in the wonkier precincts of the Democratic Party even before the pandemic, and it has gained ground amid a crisis that has deepened needs and expanded the country’s notions about what the government can spend.
Though few people have noticed, a majority of Democrats in both chambers of Congress have endorsed a child allowance, and a temporary version recently passed the House as part of the Heroes Act, a giant package of coronavirus relief. Analysts estimated that the allowance would cut child poverty by 42 percent, based on pre-pandemic data — among Black kids by more than half.
Mr. Biden hasn’t expressed a view. But if a blue wave prevails in November, it’s possible to imagine a Democratic Congress giving him the chance to start his presidency by lifting four million children out of poverty with a stroke of his pen.
America’s high level of child poverty is old, but the empirical case for reducing it is new. Advances in brain science have shown how much of a child’s life course is set in the first few years. Economists have found that even limited periods of poverty can have lasting effects — less schooling, lower adult earnings and worse adult health.
Historically, the United States could look past its unusual child poverty and boast of its unusual mobility. Poverty is more readily excused when seen as a stage, not a fate. But most researchers now think the American advantage in class fluidity has faded, if it ever truly existed. What remains exceptional is the poverty itself, not the odds of escaping it.
One lesson of recent years is that progress is possible: With low unemployment and the expansion of programs like the earned-income tax credit, child poverty before the pandemic had fallen to an American low, 13.7 percent. But that was still notably high by the standards of wealthy nations.
Depending on the yardstick used, child poverty in the United States is 65 percent to 90 percent greater than the average in its four main English-speaking peers (Australia, Britain, Canada and Ireland). Among them, America’s public spending on children, as a share of its economy, consistently ranks last.
Money helps children in part because of what it buys — food, housing, better schools, health care and summer camps. But it also important in a less obvious way: It reduces stress, which can reach toxic levels in poor households. The academies’ report warns that children chronically exposed to excessive stress can suffer “permanent changes in brain structure and function,” leading to problems from learning disabilities to heart disease and diabetes. Some scientists have found that toxic stress can even alter children’s chromosomes.
If poverty was that harsh before the pandemic, imagine what is doing to children now, amid mass unemployment, closed schools and fears of a deadly pandemic.
This crisis targets the needy. Unemployment rates have grown by 4.8 percentage points for college graduates, but 9.7 points for workers without a high school degree. Perhaps no one is suffering more than undocumented immigrants, who are ineligible for government aid and whose households include more than four million American children.
There is no age group for whom the pandemic does not pose a threat. Toxic stress has been shown to harm infants still in the womb. School closures will confine rich and poor kids to homes even more unequal than their classrooms, at the risk of widening the achievement gap. (Sean F. Reardon, a Stanford sociologist, has found poor eighth graders have the math and reading skills of rich kids in fourth grade.) It’s hard to measure child hunger amid a pandemic, but four different surveys show sharp increases, and food banks have seen astounding lines.
“The kids are not all right — every aspect of their lives is being affected,” said Bruce Lesley, president of First Focus on Children, a Washington advocacy group.
At special risk of long-term harm are young people joining the work force, for whom the earnings penalties are large and lasting. Till von Wachter, an economist at the University of California, Los Angeles, found that a five-point rise in unemployment rates (an increase smaller than today’s) costs disadvantaged workers about a quarter of their first few years’ pay, because they work less and receive lower wages. For workers without a high school degree, it takes more than a decade for their earnings to fully recover, with the total losses over that time equal to a full year’s pay.
The impact goes beyond earnings. Mr. von Wachter (with Hannes Schwandt of Northwestern) found that workers who started out in the deep recession of 1982 had lower marriage rates, more divorce and higher rates of mortality, in part because of heart and liver disease. He estimates that the timing of their labor market entry will shorten their average lives by six to nine months.
“These people lead more stressful lives — they work harder and switch jobs more often,” he said. “Being poor is a very stressful and unhealthy state.”
It’s clear that poor kids on average fare worse than others but, as researchers are quick to warn, correlation is not causation. The question is whether poverty itself harms kids or whether other issues that harm kids also cause poverty. Do poor children do worse in school because they lack money — or because their parents on average have less education, which leaves them less able to help?
If money is the problem, subsidies could be the solution. If not, the money may do little good. In some cases (if, say, a parent has a drug problem) it might even hurt.
In 2015, Congress put the question to the National Academies, a private group (chartered under Abraham Lincoln) that convenes ad hoc panels of scholars to give the government scientific advice. Its pronouncements are arrived at by consensus, and meant to offer cautious, authoritative views. Fifteen scholars pondered the question and concluded last year, “Poverty itself causes negative child outcomes.”
How do they know?
The evidence comes in part from natural experiments — events that randomly subsidize one group of poor families but not others — like the opening of the Cherokee casino. Randall K.Q. Akee, an economist at U.C.L.A., has published four studies of the tribal subsidies and found they improved everything from the children’s education to their propensity as adults to vote. “When you remedy child poverty, children become more productive members of society across multiple dimensions,” he said.
Another natural experiment compared low-birthweight babies who qualified for disability payments with those just above the eligibility threshold. The babies who received the Supplemental Security Income payments during their first nine months developed motor skills more rapidly than those who did not — a result especially notable since the heavier, slightly healthier babies should have had the edge. (The payments now average about $640 a month.)
Other important evidence comes from the rollout of the food stamp program, which was introduced a county at a time from 1962 to 1975. The local differences allowed three researchers (Hilary Hoynes, Diane Whitmore Schanzenbach and Douglas Almond) to compare kids who grew up with access to the program and those who did not.
The differences were large. Children in counties with a food stamp program finished high school at a rate 18 percentage points higher than those raised in places without one. Children in food stamps counties also earned more as adults, enjoyed better health, and were less likely to be poor or receive public aid.
“Some people fear that if you give people benefits you create a culture of poverty,” said Ms. Schanzenbach, an economist at Northwestern. “This shows the opposite is true — if you invest in poor kids, they’re less likely to need benefits as adults.”
Congress asked the academies what it would take to cut child poverty in half. The panel considered the expansion of 10 programs, including job training, housing aid, child care, food stamps and the earned-income tax credit.
None reduced child poverty nearly as much as creating a child allowance. An annual payment of $3,000 per child would lift at least 38 times as many children out of poverty than an increased ($10.25 an hour) minimum wage. Advocates would pay it monthly, to temper damaging income swings like those hitting families today.
“If I had to pick one policy, I would put my bet on a child allowance,” said Greg J. Duncan, an economist at the University of California, Irvine, who led the academies’ study group.
One argument against a child allowance is cost. At about $100 billion a year, such a program is expensive, but less than half as expensive as Donald Trump’s 2017 tax cuts, which mostly benefit the wealthy. In the context of Covid-19 spending measured in the trillions, the costs seem less forbidding.
The other objection is that offering parents a cash subsidy would discourage some from working, a standard anti-welfare concern. But the classic way welfare discourages work is by reducing benefits as earnings grow — in essence, taxing the effort to get ahead. A child allowance, by contrast, would give families the full amount until they were solidly middle class. Every dollar earned would be a dollar gained.
The academies estimated that a child allowance would reduce earnings by just under two-thirds of 1 percent. Public policy involves trade-offs. Maintaining 99.4 percent of the work effort while cutting child poverty more than 40 percent is a trade-off supporters should be able to sell.
Actually, the United States already has a child allowance of sorts — it just happens to be one that largely omits the families that need it the most. A provision of the tax code called the child tax credit offers up to $2,000 per child a year, but only for households with sufficient earnings.
A single mother with two children has to earn more than $30,000 to fully qualify. More than a third of children fail to get the full benefit, including half of Blacks and Latinos and nearly 70 percent of those raised by single mothers. Families with earnings up to $400,000 get the full sum.
In a season of reckonings over social injustice, a plan to shrink child poverty would seem well timed. Think of it as reparations for the accident of being born poor. The child allowance recently passed by the House combines universalist appeal (families with earnings up to $180,000 would be eligible) with outsize help for the disadvantaged. According to Sophie Collyer of Columbia, of the four million children it would lift from poverty, 70 percent would be Black or Latino.
But few people noticed the advance of a plan whose natural habitat is the seminar room, not the streets or the campaign rally. To grasp how the little the Democratic candidates said about child poverty, recall how much they said about “Medicare for all.” (Andrew Yang’s call for a guaranteed income of $12,000 a year per adult is a partial exception, though vastly more expensive and aimed at a different problem, technological change.) When the candidates were asked about child poverty in February, the Children’s Defense Fund called it the first presidential debate question on the issue in two decades.
Their responses were not of the sort that suggested great forethought. Bernie Sanders blamed “the 1 percent.” Pete Buttigieg called for “a different kind of politics.” Joe Biden said that he had been known as the poorest man in Congress. Amy Klobuchar alone mentioned the academies’ report, but glossed over its major recommendation — a child allowance — to tell a story about Franklin Delano Roosevelt and the importance of empathy.
The candidate who had made child poverty his focus was Senator Michael Bennet of Colorado — no one’s idea of a radical. (As the head of Denver’s public schools, he’d seen the many ways, from hunger to unstable housing, that poverty held children back.) But he hadn’t gotten enough support to make it onto the stage.
Perhaps the policy’s low profile has helped shield it from attack. Mr. Bennet is a co-author of two child allowance plans (of differing amounts) and Senator Kamala Harris, the vice-presidential nominee, has co-sponsored both. The House speaker, Nancy Pelosi, a paradigmatic liberal, is among the Capitol’s main enthusiast but there are pockets of conservative support, too.
Libertarians like policies that let parents spend money as they wish, rather than constricting their choices. Traditionalists like the idea that a child allowance benefits non-working mothers, unlike subsidies for child care. Sixteen conservative intellectuals, including J.D. Vance, Robert George and Yuval Levin, recently called for a one-year child allowance as part of coronavirus relief.
Mr. Biden’s view remains a mystery — repeated queries to his campaign this week went unanswered. But he pledges to take the country beyond recovery to reinvention. (“Build back better,” he likes to say.) One place to start is by reinventing a country without so many poor kids.