Association for Public Policy Analysis & Management

Recent research highlights the tremendous disparities that exist in newborn poverty rates across racial, ethnic, and economic lines.  While this work is quite compelling, it does not address the diverse array of demographic risk factors behind newborn poverty, or with the addition of a child into the home, more generally. For many babies, being born into poverty is simply a result of being born to parents who were poor before they were born. However, the mathematics of poverty thresholds also suggest the possibility that an additional child may “push” a low-income family that was slightly above the poverty line into poverty, as the addition of a new child increases their estimated family expenses and correspondingly their poverty threshold. Of course, the addition of a child also often brings about a host of changes in a family, particularly with respect to maternal employment, and for this reason the causal impact of childbearing on family poverty is difficult to estimate.  However, a careful analysis of the literature allows one to estimate how families typically respond to the addition of a child in terms of employment decisions. 

In this paper, we tease out who may be particularly “at risk” of being pushed into poverty through the birth, adoption, or fostering of a child.  To do so we examine trends in family demographics, childbirth, and family employment in order to construct and analyze counterfactual scenarios.  We use American Community Survey (ACS) data from 2015, which reflect 2014 income and poverty statistics, generating a nationally representative sample of 2,983,791 individuals across 1,363,306 family households.  First, we describe the characteristics of families that are poor before having an additional child, as such families are likely to remain in poverty afterward.  Next we simulate poverty status and ask whether or not a family would fall into poverty with the addition of a child. To do this, we compare each family’s total income to the corresponding poverty threshold of a family with one additional child. Then, we recalculate the family’s poverty status to determine the share of families that would become poor under this scenario. For example, a hypothetical two-adult, two-child family had a poverty threshold of $23,624 in 2013. In this analysis, we adjust their poverty threshold to that of a two-adult, three-child family, or $27,801. We then recalculate their poverty status.  Finally, we examine five plausible scenarios that emerge for families after the arrival of a new child: family income increases by 25 percent, family income increases by 10 percent, family income remains constant, family income decreases by 10 percent, and family income decreases by 25 percent. We find that those groups more likely to live in poverty—Blacks and Hispanics, children and seniors, less-educated, and those from more rural or highly urban environments—are also at heightened risk of falling into poverty with an additional child.  Moreover, we find that this heighted risk generally persists across the five hypothetical family income scenarios we examine.