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The 2022 Increase in Child Poverty is Especially Detrimental for Young Children

September 25, 2023

This blog explains the impact of the policy choice to not renew the Child Tax Credit on the child poverty rate.

“Poverty, for American children, is not some accident. It is a policy choice,” said Senator Corey Booker at a press conference conducted by the six legislators who have been pushing for renewal of the Child Tax Credit (CTC). The CTC worked: The child poverty rate in 2021 was significantly reduced from previous years due to the policies and funding provided by Covid-era programs, especially the CTC. However, recently released data shows that the child poverty rate for 2022 has significantly increased, back to pre-Covid levels, because of the choice to end it.

When this policy choice was made, the number of children in poverty increased from 3.8 million in 2021 to 9 million in 2022. According to the Children’s Defense Fund, young children under age six are particularly vulnerable, with 45 percent living in low-income families and 23 percent living in poor families.

Children of color are likewise disproportionately affected by poverty, with Hispanic and Black families over-represented (at 1.5) in the ratio of poverty population to the total populations, and American Indian and Alaskan Natives at 2.2 in the ratio of poverty to their total population.

Those of us in the early childhood field know well the importance of the first 1,000 days of a child’s life to the development of their brain architecture. The Harvard Center for the Developing Child states: Early experiences affect the development of brain architecture, which provides the foundation for all future learning, behavior, and health. Just as a weak foundation compromises the quality and strength of a house, adverse experiences early in life can impair brain architecture, with negative effects lasting into adulthood.

As the Children’s Defense Fund notes, the adverse experiences of “growing up in poverty has wide-ranging, sometimes lifelong, effects on children, putting them at a much higher risk of experiencing behavioral, social, emotional, and health challenges. Childhood poverty also plays an instrumental role in impairing a child’s ability and capacity to learn, build skills, and succeed academically. Much work remains for the benefit of America’s children.”

When the Child Tax Credit was expanded, directly giving families a monthly allotment of $3,500, families spent this money on the expenses most impacted by poverty: food (59 percent); utilities (52 percent); rent/mortgage (45 percent); clothes (44 percent), and education (40 percent). One in four parents of young children used the CTC payments to cover child care.

Studies are increasingly demonstrating that economic and concrete supports lead to better outcomes in child development and family wellbeing. A recent study on poverty’s impact on children’s cognitive, emotional, and brain development by Baby’s First Years found that “an anti-poverty intervention had a direct impact on children’s brain development. After one year, infants of mothers in low-income households receiving $333 in monthly cash support were more likely to show faster brain activity, in a pattern associated with learning and development at later ages.”

Researchers at Chapin Hall at the University of Chicago have examined the detrimental effects on child welfare involvement of economic hardship and insecurity. They recommend policies and programs for child welfare prevention that include economic and concrete supports. Again, for young children, prevention of child welfare involvement is critical as nationally, over 40 percent of all children going into foster care are birth-to-five years of age.

In his September 14 column in the New York Times, America Betrays Its Children Again, economist Paul Krugman noted that more than half the rise in child poverty could have been avoided by extending the 2021 enhancement of the CTC. Aid to low-income children is a “highly cost-effective investment” in children who end up healthier, better educated, and more economically self-sufficient.

Policymakers must choose to extend the CTC. There is no downside to doing so, and our children’s well-being is at stake.

Cynthia L. Tate, PhD

Cynthia L. Tate, PhD serves as the State Services Liaison for Washington and South Carolina; is the PN-3 Hub Lead for Washington; is a part of the faculty for the Equity Leaders Action Network, and works to advance cross-systems collaboration between early childhood and child welfare systems.

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