To Reduce Child Poverty, Increase Family Incomes

Children are more likely to live in poverty than any other age group in the United States. Poverty undermines children’s development and threatens their long-term prospects. In 2019, before the COVID-19 pandemic, 12 million children lived in families with incomes below the federal poverty level; another 15 million lived in families that were one economic shock away from slipping into poverty. The COVID recession has since swelled the ranks of both groups.

Fortunately, there is a proven, straightforward way to significantly reduce the percentage of children in poverty and provide a buffer for families at risk of becoming poor: Increase the income of families raising children. This strategy has worked for the elderly, and it can work for children. Two proposals before Congress aim to do this. President Biden’s American Rescue Plan would increase the existing child tax credit, make it fully refundable, and pay it in monthly installments. Senator Romney’s Family Security Act would provide a monthly per-child cash benefit for families, replacing some existing family income supports. Both proposals gradually phase out benefits at higher income levels.

Money—especially in the form of a stable income—matters to children’s well-being, both right now and over the longer term. On average, children in more affluent families are more likely to receive medical care on a regular basis and are in better physical and mental health than their peers who live in poor families. Additionally, they have better educational outcomes and are less likely to have contact with the child welfare and juvenile justice systems. As adults, they generally earn more.

Money allows parents to meet their children’s basic needs for food, housing, health care, and other essentials. It also matters to children in other important but less obvious ways that support their healthy development:

Money provides the resources to support early brain development.

Research indicates that poverty experienced in early childhood, when brain development is most rapid, is particularly damaging to children’s long-term outcomes. Young children’s brains need critical inputs for healthy development. These inputs include having their nutritional and other basic needs met, and having caregivers with the time and presence to offer consistent, sensitive, and responsive caregiving.

Having an adequate income allows parents to make supportive and preventive investments in their children.

Sufficient income pays for activities, from sports to music lessons to after-school and summer programs—in other words, what social scientists refer to as “promotive factors” that provide social, emotional, and educational benefits to children. Adequate income also makes possible investments in prevention—for example, by getting help to address learning issues early.

Money can give parents time with and for their kids.

Extra income may let a parent stay home longer after the birth of a child or alter their work hours to facilitate family routines such as meals together or family reading—activities that research tells us contribute to children’s well-being. Adjusted work hours may also make it possible for parents to meet with a teacher, volunteer in the classroom, or attend a child’s school event.

A child benefit paid on a monthly basis can support parental employment.

Extra income can be a stabilizing factor for working parents, helping them pay for child care arrangements that better meet their child’s and family’s needs. For some families, such an arrangement may involve a location or hours better suited to parents’ work schedules. For others, securing a more stable child care arrangement—or one that is safer, of higher quality, or more culturally appropriate—may lessen stress for parents on the job.

Secure, stable income reduces parental stress and promotes children’s well-being.

Income swings—for example, because of seasonal employment or a job in the gig economy—are stressful for parents and can wreak havoc on the family routines and relationships that are essential to children’s social, emotional, and cognitive well-being. A child benefit paid on a monthly basis could help smooth income fluctuations and thus minimize disruptions in a child’s life.

Money may help level the playing field for many children of color.

As a result of structural racism and higher levels of poverty, Black, Hispanic, and Indigenous children are more likely to live in substandard housing and unsafe neighborhoods, to attend lower-performing schools, and to be exposed to more environmental toxins. While it is unrealistic to assume that a child benefit will address all of these threats, it could help some families move for better housing, more supportive neighborhoods, stronger school districts, and healthier environments.

Of course, money can’t provide all the essentials a child needs to flourish. As The Beatles famously sang, “money can’t buy me love,” nor does it guarantee the nurture, care, and protection that a loving parent or caregiver gives in abundance. But money is essential to meeting children’s basic needs. It provides the resources and opportunities that support optimal child development. It can free up parental time, support parental employment, and promote equity. These are good things not only for kids, but for everyone.