Poor Children in Working Families Continue to Lag Behind

Washington, DC – In 2001, children in poor families were less likely to have working parents than a year earlier; a substantial percentage of working poor parents who pay for child care spent more than half of their cash income on child care expenses; and among those living with two-parents, children in working poor families were less likely to be covered by health insurance than those in families who were not meeting work requirements.

These findings and more are reported in Child Trends’ latest research brief, Poor Families in 2001: Parents Working Less and Children Continue to Lag Behind, by Richard Wertheimer, Ph.D. The brief provides a snapshot of working poor families in 2001, focuses on the characteristics of children living in poverty, and offers some policy options. This research was funded by the Foundation for Child Development.

Poor parents were working less in 2001.

  • The percentage of poor children whose parents met the work standard steadily increased from 32 percent in 1995 to 43 percent in 2000, but dropped to 40 percent in 2001. (To meet the work standard, single parents must work at least 20 hours per week and two-parent families must work at least 35 hours per week.)
  • Among children in single-mother families, the percentage of mothers who met the work standard increased from 24 percent in 1995 to 38 percent in 2000, but dropped to 33 percent in 2001.

Working poor families spend a large portion of their income on child care.

  • Forty percent of working poor families headed by single mothers who paid for child care spent at least half of their cash income on child care; another 25 percent spent 40 to 50 percent of their income on child care.
  • Twenty-three percent of working poor families headed by married couples who paid for child care spent more than half of their income on child care, while another 21 percent spent between 40 and 50 percent.

“Significant attention has gone to middle- and upper-income workers losing their jobs recently, but low-income families are being affected by the economy as well” said Dr. Richard Wertheimer, Ph.D., vice president at Child Trends. “And when 65 percent of poor single mothers who are working and paying for child care spend more than 40 percent of their income on child care, it is difficult for them to get ahead.”

Children in poor, two-parent families are less likely to be covered by health insurance.

  • In 2001, 72 percent of children in two-parent, working poor families were covered by health insurance, compared to 78 percent of children in poor families that did not make a substantial work effort.
  • Eighty-three percent of children in two-parent, modest income families and 95 percent of children in two-parent, middle-to-upper income families were covered by health insurance.
  • For poor children living with single mothers, rates ranged between 83 percent of those that met the work requirement and 89 percent of those that did not meet the work requirement.

Children in poor families fall behind on behavioral measures.

  • Sixteen to 19 percent of children in working poor families had been suspended or expelled from school, compared to 12 percent of children in modest income families and nine percent of children in middle-to-upper income families
  • Ten to 13 percent of children in working poor families had repeated a grade, compared to only 6 percent of children in middle-to-upper income families.

“Child poverty is a complex and widespread problem. One-size-fits-all solutions are not as likely to be effective as approaches tailored to the local community or to a particular family,” said Wertheimer. “What is needed is a mix of effective policy initiatives that get to the root of what each family needs to rise out of poverty.”

Several policy options are presented in the brief that may help working families get out of poverty. These options include:

  • Increasing the number of hours families work. Of course, there has to be a demand for predominately low-skilled labor and affordable child care services. (Findings from simulations from The Heritage Foundation and The Brookings Institution are presented.)
  • Providing direct and indirect wage subsidies. These subsidies, such as the Earned Income Tax Credit (EITC) and child care subsidies, increase the incentives to enter and stay in the labor market.
  • Providing assistance in finding and getting jobs. For instance, implementing programs that help low-income parents to work more consistently and to embark on career paths may lead to higher wages and benefits. However, little research exists on what particular programs are likely to be successful.
  • Promoting marriage. Two-income families are less likely to be poor than single-parent families. Programs that encourage healthy marriages for single parents and help preserve marriages for currently married couples could decrease the number of families in poverty. Again though, little research exists on what programs are successful, particularly for low-income families.

Click on the title to view a PDF copy of Child Trends’ research brief, Poor Families in 2001: Parents Working Less and Children Continue to Lag Behind .

Child Trends, founded in 1979, is an independent, nonpartisan research center dedicated to improving the lives of children and their families by conducting research and providing science-based information to the public and decision-makers.

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