No, the US Does Not Have the Highest Child Poverty Rates in the World

No, the US Does Not Have the Highest Child Poverty Rates in the World

Child poverty rates in the US are at historically low levels, and similar to other countries such as the United Kingdom, Ireland, and Canada. This truth gets lost when politicians like Sen. Bernie Sanders (I-VT) announce that, “The U.S. has the highest child poverty rate of almost any country on Earth,” or when Sen. Cory Booker (D-NJ) declares that America has “The moral obscenity of having the highest levels of child poverty in the industrialized world.” Mischaracterizing facts might help presidential hopefuls garner votes, but it risks separating important policy conversations from reality.

Incorrectly portraying the US as a high-poverty nation with a weak safety net makes existing government programs appear ineffective and threatens future anti-poverty efforts. In a new American Enterprise Institute report, I challenge conventional wisdom by showing that child poverty rates in the US are at historic lows, while government spending on children has increased dramatically in recent decades. Today, the US spends as much on children, if not more, compared to other countries and child poverty rates are similar to those in peer nations.

Since 1960, federal spending on low-income children has increased 17-fold in constant dollars, increasing from $16 billion to over $300 billion in 2018, according to data from the Urban Institute’s Kids’ Share. The creation and expansion of programs such as the Supplemental Nutrition Assistance Program (SNAP), Medicaid, and refundable tax credits, have increased federal spending dramatically. Notwithstanding concerns about the cost, size, and scope of these programs, they have effectively reduced poverty for many American children.

International comparisons that consider the full range of child spending show that the US spends as much, if not more, per child than other countries such as Belgium, Germany, Canada, France and the United Kingdom. As a percentage of GDP, the US spends more on children than Germany, Australia, Canada and the Netherlands. This includes health and education spending in the calculation, rather than narrowly focusing on “family-related” spending (such as direct cash payments to children from the government or paid family leave), which is typical in most international comparisons of child-related spending. Because so much of what the US government spends on children falls into these categories, incorporating them into spending comparisons is important to capture the full picture.

Recent studies prove that child poverty in America has reached historically low levels. Using a consumption-based poverty measure, and a threshold based on 2015 standards, economists Bruce Meyer of the University of Chicago and James Sullivan of Notre Dame University estimate that in 2018, 10.8 percent of US children were below the poverty line compared to 32.9 percent in 1980. The authors of the 2019 “A Roadmap to Reducing Child Poverty” published by the National Academies of Sciences, Engineering, and Medicine, found a similar pattern using an income-based measure. They found that US child poverty rates declined from a high of 30 percent in the 1980s to 15.6 percent in 2016 — a number that would be lower if government benefits were fully captured in poverty measurement surveys.

The methodological details behind different measures of poverty are important, and they often get lost when people hear provocative statements about America having the highest child poverty rates in the world. It is true that the US has high “relative” poverty rates, but countries like the US always will because we have a wide income distribution and higher overall incomes than other countries. This means that children in “relative” poverty in the US likely have a higher standard of living than children who occupy a similar spot on the socioeconomic ladder in Canada, France, and the United Kingdom, for example.

To get a better sense of poverty, we need a threshold that reflects the same standard of living across countries. The authors of “A Roadmap to Reducing Child Poverty,” for example, created their own poverty measure to reflect an “absolute” threshold and to account for differences in incomes across countries. They found that the child poverty rate in the US (12.5 percent) was lower than the UK (13.5 percent) and only slightly higher than Canada (10.3 percent).

None of this is to suggest that child poverty in the US is not a pressing issue. But misstating the status of poverty among American children, and underestimating how government programs have contributed to its decline could divert policymakers from finding further solutions. A proper understanding of the situation suggests that spending more government money on existing programs might reduce child poverty marginally more, but it does little to address the root causes that impede upward mobility, such as limited parental employment, not having two involved parents, and living in an unengaged community. But policy debates over these issues will only be successful when our leaders acknowledge basic truths about child poverty in America and the government’s role in reducing it.

Angela Rachidi is a research fellow in poverty studies at the American Enterprise Institute

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