Association for Public Policy Analysis & Management

A core American ideal is that all children should have a clear pathway to thrive and prosper as adults. Yet, poor children—particularly persistently poor children—face steep obstacles on their path to success. These obstacles include family and neighborhood disadvantage, as well as the instability these children face.

More than one in ten US children grow up in persistently poor families—spending at least half of their childhood living in poverty. This paper uses longitudinal data from the Panel Study of Income Dynamics (PSID) to follow persistently poor children from birth through age 30 to examine the paths they take into adulthood. We show that persistently poor children experience significant instability throughout childhood and are twice as likely to experience family income volatility from year to year, as compared with all children. This paper also highlights the characteristics of persistently poor children who are “successful” as young adults—defined as being connected to work or school and not poor.

The pathways persistently poor children take into adulthood are generated using trajectory analysis. We find four patterns of both connectedness and poverty status. Each analysis shows that among people who were persistently poor as children, a small group does consistently well in their 20s, while most struggle from year to year with some consistently doing poorly. Overall, 16 percent of persistently poor children escape poverty and are connected to work or school in their late 20s (“most successful”), 8 percent have little connection to work or school and are mostly poor as young adults (“least successful”), and 76 percent are somewhere in the middle.

While persistently poor children face greater income volatility compared with all children, we do not find evidence that the most successful group of young adults experience less income volatility during childhood. In fact, under some measures of volatility (25 percent income drop), the most successful group of young adults experienced greater volatility during childhood. The higher levels of income that accompany the greater volatility may help to off-set the negative effects of volatility.

Looking to other childhood experiences, we find a number of other significant differences between the most and least successful young adults. Among persistently poor children, young adults in the most successful group spent less of their childhoods living in poverty, and are less likely to be poor early on (ages 0-2), a time that’s important for children’s development and future academic success. Other family characteristics, including a strong employment connection and disability, are related to persistently poor children’s future success. We also find that neighborhood characteristics matter. Among persistently poor children, those most successful as young adults lived in significantly less disadvantaged neighborhoods and less segregated cities, as compared with less successful young adults. This paper also offers strategies for helping improve the life chances of persistently poor children.