Children born into poverty are far more likely to remain poor in adulthood in the United States than in other wealthy countries. Why?
The stickiness of poverty in the U.S. challenges the self-image of a country that prides itself on upward mobility. Most scholarship on the issue tends, logically enough, to focus on conditions during childhood, including the role of government income transfers in promoting children’s development. These studies have yielded important insights, but they overlook one major reason why poverty in the U.S. is so much stickier than in peer countries: Americans born into poverty receive far less government support during their adulthood.
In a new study published in Nature Human Behaviour, my co-authors (Gøsta Esping-Andersen, Rafael Pintro-Schmitt, and Peter Fallesen) and I quantify the persistence of poverty from childhood to adulthood in the U.S. We find that child poverty in the U.S. is more than four times as likely to lead to adult poverty than in Denmark and Germany, and more than twice as likely than in the United Kingdom and Australia. These findings hold across multiple measures of poverty.
We also sought to understand why poverty is so much more persistent in the U.S., using more complete data on household incomes than past studies have generally used. Studies focused on the U.S. have found that strong social networks, high-quality neighborhoods, and access to higher education all facilitate social mobility, yet these factors also matter in other wealthy countries where mobility is notably higher. When it comes to upward mobility from childhood poverty, what separates the U.S. from the U.K., Australia, Germany, and Denmark is a robust set of public investments to reduce poverty’s lingering consequences for adults who were born to disadvantaged families. We calculate that if the U.S. were to adopt the tax-and-transfer generosity of its peer countries, the cycle of American poverty could decline by more than one-third.
Imagine a resident of the U.S. and a resident of Denmark who each grew up spending, say, half of their childhood in poverty. Our study finds that both children will be less likely to pursue higher education or work full-time in adulthood compared with children who didn’t grow up poor. But the Dane is more likely to receive unemployment benefits, means-tested income support, or a child allowance and is therefore far less likely to live in poverty as an adult. This tax-and-transfer insurance effect—or the role of the state in reducing adult disadvantages that stem from childhood poverty—matters more than other oft-studied characteristics, such as parental education or marital status, in shaping the U.S. disadvantage compared with peer nations.
We were surprised by some factors that did not explain the U.S.’s outlier status—in particular, the role of racial discrimination. We and others have documented how historic and ongoing discrimination affects racial differences in poverty rates. But racial discrimination does not appear to explain why poor children in the U.S. are so much likelier to also be poor adults. Black Americans are much more likely than white Americans to experience childhood poverty, but the white children who do grow up poor are just as likely to be poor in adulthood.
We were also struck by the fact that, when it comes to escaping childhood poverty, the differences between the U.S. and its peer countries are much larger than the differences between places within the U.S. As the economist Raj Chetty and his co-authors have shown, growing up in a high-mobility city such as San Jose, California, confers significant long-term benefits compared with growing up in a low-mobility city such as Charlotte, North Carolina. Our study reveals, however, that even in the most economically mobile places in the U.S., poverty is stickier from childhood to adulthood than it is in the U.K., Australia, Denmark, or Germany.
It might seem tautological to say that poor American children would be less likely to be poor as adults if the government gave them more money. But Americans still tend to treat the distribution of government benefits as a symptom of economic deprivation rather than a potential solution to it. Many academic studies of intergenerational disadvantage have used welfare benefits as a direct proxy of poverty. Our study, in contrast, emphasizes that receipt of well-designed government transfers can directly reduce the persistence of poverty. As recent proof of this claim, Americans do not even need to look abroad. In 2021, the expanded child tax credit brought the U.S. poverty rate to its lowest level ever recorded and had the American welfare state temporarily reducing poverty at the rate of Norway’s. After the benefit expansions expired in 2022, poverty and food hardship predictably increased. Evidence from the other high-income countries in our study suggests that the U.S.’s return to a more restrictive and targeted welfare state is unlikely to promote upward mobility from poverty.
Some people might argue that self-sufficiency—giving people the means to overcome poverty without government income assistance—should be the aim of government policy. That is a defensible perspective and policy aim, yet it is inconsistent with the fact that all high-income countries include government taxes and transfers when measuring poverty. Moreover, it implies that it is better for American children who were born into poverty—through no fault of their own—to stay poor in adulthood than to escape poverty thanks to government transfers.
Breaking the cycle of poverty is not merely about increasing families’ child-care support or promoting higher education to wayward teenagers; it also requires direct state effort to improve the ability of disadvantaged adults to meet their basic needs. The United States’ reluctance to do so largely explains why its poor children are more likely to become poor adults.
The post Why Poor American Kids Are So Likely to Become Poor Adults appeared first on The Atlantic.
