The “Great Recession,” which officially lasted from December 2007 through June 2009, represents the worst U.S. economic downturn since the 1930s. Millions experienced wage cuts, layoffs, and long-term unemployment. Economically vulnerable families, who do not have substantial assets, also experienced increased housing instability due to these labor market changes and the collapse in housing values. As a result, poverty rose and foreclosures, evictions, and homelessness increased. Two years after the official end of the recession, in a recovery that has often been described as anemic, the economic problems created by unemployment and the housing crisis persist. In short, the Great Recession and its reverberations have resulted in levels of economic distress unprecedented in modern times. And the most vulnerable members of society – notably, minorities and children – have disproportionately suffered. Fifteen and one-half million children lived in poverty in 2009, up from 14.1 million in 2008. Income for African-American households fell by 4.4 percent from 2008 to 2009 (U.S Census Bureau, 2010) and the black unemployment rate is about twice as high as that for whites (U.S. Bureau of Labor Statistics, 2010). The current economic situation is likely exacting an especially high toll on black families, potentially unraveling decades of black economic progress. 

This paper relies on a unique data collection effort that covers a broad range of in-depth information for children and their parents living in settings that have been among the hardest hit by the recession. Specifically, we will use a sample of approximately 450 African-American and white children living in Southeast Michigan. Their parents are participating in the ongoing “Michigan Recession and Recovery Study” (MRRS) conducted at the National Poverty Center (NPC) at the University of Michigan. Two waves of the MRRS have been fielded, the first in 2009 and the second in 2011; our associated child sample, the Michigan Recession and Recovery Study – Child and Youth Study (MRRS-CYS), was incorporated in the 2011 wave of the MRRS. Sample members have been severely affected by the recession: Michigan has one of the highest rates of unemployment and home foreclosures in the country. Approximately 1 in every 160 houses in Southeast Michigan is in foreclosure (Realtytrac, 2010) and the unemployment rate was 13.4% in August 2010. Mirroring national trends, Detroit-area black families have been disproportionately affected;  in 2008 the unemployment rate for blacks in Wayne county (where Detroit is located) was about 32%, compared to about 14% for whites (American Community Survey, 2009).

The study is among a very few that can provide insights regarding the link between economic instability and child health specific to the most recent downturn – a key contribution given that extant findings based on less-severe business cycle fluctuations are inadequate for informing current policy. The paper will also explore whether the association between economic instability and child health differs for blacks versus whites, taking advantage of the roughly equal sample representation of the two racial groups.