The Case for Giving Money to Poor Parents

About a month and a half ago, Demos’ Matt Bruenig launched an Internet scuffle with a post suggesting that recent conservative proposals to rejigger the tax code in parents’ favor are unnecessarily complicated. If we want to address child poverty, Bruenig asked, why should we “create three different child-related tax carve outs and then also two different sets of tax rates for parents and non-parents”—when we could instead just give parents money? (Bruenig co-authored a New Republic piece with Elizabeth Stoker elaborating on the idea, and mentioned it again in a Salon piece today.)

Given the politics of anti-poverty programs, you already know what you think of that idea by the time you’ve reached this sentence. Perhaps you believe that, whatever their complexity, expanded child tax credits have the virtue of guarding against moral hazard. In most of these proposals, parents who don’t file income taxes—because they have insufficient income—would not benefit. Put another way, if you see anti-poverty programs as somehow valorizing a set of choices that led to a family’s poverty, you might want to withhold public support for their children (since this would “reward” the parents’ poor choices).

But a new piece from Greg Duncan, Katherine Magnuson, and Elizabeth Votruba-Drzal in an edition of The Future of Children journal dedicated to two-generation strategies for fighting poverty asks us to consider a different framing for the problem. What if we left contentious, contested questions of adults’ moral deservedness out of the picture for a moment, and just asked whether increased income for parents would improve outcomes for children? This would be a useful contribution to debates over whether persistent American poverty is a function of a “tailspin of culture...in the inner cities” or a lack of resources for families.

The authors explored whether increasing a family’s income—without changing their “culture” or any other factors—would improve academic, developmental, and social outcomes for children. They also tested to see when additional income would make the most difference. Is earlier better?

To gauge the benefits of additional resources, it pays to get a clearer picture of what poverty does to young children. First of all, poverty correlates with a host of other structural challenges. Poor children are more likely to live in crowded, substandard housing, where their chances of lead poisoning are higher. They’re likely to attend overcrowded, less effective schools.

These—and other—factors undermine critical family structures that could support young children’s healthy growth. The authors cite research indicating that this has little to do with cultural values: “Evidence suggests that poor people hold many middle-class values and beliefs, but that circumstances make it hard for them to behave accordingly.” Limited family resources strain parental relationships and increase the likelihood that children will grow up in one-parent homes. Children born into households with an income below the U.S. poverty line are far more likely to be born out of wedlock than those born into households with incomes over twice the poverty line.

But these are only the most obvious elements of adversity American children growing up in poverty face. The combination of these (and other challenges) produce toxic stress levels in young children. Persistent exposure to uncertainty, anxiety, and other forms of physiological pressure can significantly impair children’s development. Specifically, the authors note, “chronically elevated physiological stress may interfere with the development of poor children’s stress response system and health, as well as the regions of their brains responsible for self-regulation (the ability to regulate attention and emotions).” Poverty in early childhood prevents children’s brains from developing on track—and this happens well before they arrive at school.

Add up all these challenges, and our national mantra—that all hardworking folks have a decent chance at success in the United States—rings hollow for these kids. And we’ve only looked at the deficits thus far. The authors showed that the gap in annual dollars spent on children’s enrichment between the richest and poorest 20 percent of Americans grew by nearly 300 percent. Poor children start behind their wealthier peers—and their families have fewer resources to help them catch up. These resource gaps are replicated at school, since we frequently invest more resources in schools with high percentages of wealthy students than those with high percentages of poor students.

No surprise, then, that by kindergarten, we see significant academic gaps between poor students and their wealthier peers. The authors calculate that less than 20 percent of kindergartners from families below the U.S. poverty line scored proficient in letter recognition—in contrast with over 70 percent of middle-class kindergartners. These data highlight the roots of the so-called “wealth achievement gap,” which is now approximately twice the size of the racial achievement gap. Over time, students whose families’ incomes are in the bottom 10 percent will fall an average of nearly four years behind peers whose families’ incomes are in the top 10 percent.

At some level, then, we would expect that increased resources for parents would help to alleviate some of poverty’s debilitating effects. The logic behind these sorts of “dual-generation” poverty-fighting strategies is straightforward. We know that poor parents—like nearly all parents—want to do more for their kids. Presumably, additional income would help them do so. By investing in better conditions for parents, we improve conditions for kids. By improving conditions for kids, we advance their academic progress and long-term life prospects. By investing in those prospects early, we forestall later, expensive public costs like remedial education and incarceration.

In a survey of the research, Duncan, Magnuson, and Votruba-Drzal conclude that there is growing evidence linking increased family income in the early years with improvements in children’s academic achievement and behavior. In one study, “a $3,000 boost in annual income was associated with a…[statistically significant] gain in achievement scores” for children in families qualifying for public assistance. Other studies suggested links between increases in family income during the first five years of a child’s life and increased work hours and earnings as adults.

Robust causal data are still lacking. As always, better research would make the case clearer. But the existing evidence is sufficient for the authors to warn that while “the wider discussion of policy has been cast in the optimistic light of benefits that might result from increasing the incomes of low-income families...reductions in the generosity of programs such as the [Earned Income Tax Credit] can be expected to reduce children’s success at school and increase their mothers’ stress levels and mental health problems.”

Their piece doesn’t settle the question of how we ought to transfer more resources to poor families. It does, however, clarify the question at hand. Are we concerned with discouraging already-poor parents from having made the choices that (supposedly) led to their poverty? Or are we concerned with policies that would improve these parents’ lives, national productivity, and—above all—the academic and life prospects of their children? If we’ve decided that fighting child poverty in the short- and long-term is a priority, however, there’s growing research evidence that early investments in the nation’s poorest children and their families are a sensible use of resources.

This post was originally published at Forbes.