Trends in Income Insecurity Among U.S. Children, 1984–2010

Abstract

Has income insecurity increased among U.S. children with the emergence of an employment-based safety net and the polarization of labor markets and family structure? We study the trend in insecurity from 1984–2010 by analyzing fluctuations in children’s monthly family incomes in the Survey of Income and Program Participation. Going beyond earlier research on income volatility, we examine income insecurity more directly by analyzing income gains and losses separately and by relating them to changes in family composition and employment. The analysis provides new evidence of increased income insecurity by showing that large income losses increased more than large income gains for low-income children. Nearly one-half the increase in extreme income losses is related to trends in single parenthood and parental employment. Large income losses proliferated with the increased incidence of very low incomes (less than $150 per month). Extreme income losses and very low monthly incomes became more common particularly for U.S. children of nonworking single parents from the mid-1990s.

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Notes

  1. 1.

    Children’s incomes are not directly observed, and family income could be standardized in different ways to approximate their economic well-being (see Atkinson et al. 1995; Buhmann et al. 1988). We explored standardization by family size, the poverty threshold, and regression adjustment for family size. Different methods of standardization of incomes yielded similar results, which were themselves similar to the analysis of unadjusted incomes.

  2. 2.

    The value of housing subsidies is not asked directly in the SIPP and is not included among near-cash benefits. Imputing the value of housing benefits also requires estimation of local market rents. With the current focus on income changes, estimation of the value of housing subsidies may introduce variation as an artifact of updates in the schedule of market rents.

  3. 3.

    The PCE data series are available online (https://research.stlouisfed.org/fred2/series/PCEPI).

  4. 4.

    Let \( \overline{l} \) be the average monthly proportion of children with very low income. These children experience extreme income losses at a rate of e l = E(e it |l it = 1). The remainder of children experience extreme income losses at the rate of e n = E(e it |l it = 0). The rate of extreme income losses for all children is ē = \( \overline{l}{e}_l \) + (1 – \( \overline{l} \))e n . Focusing just on single-parent children, and fixing the share with very low income at the 1984 level, \( \overline{l} \) 1984= .0409, while keeping other parameters at 2008 levels yields a hypothetical rate of extreme losses of 2.04 % compared with the observed rate of 3.97 %.

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Acknowledgments

This research was supported by the Radcliffe Institute for Advanced Study at Harvard University and by grants from the Russell Sage Foundation and the Spencer Foundation. We gratefully acknowledge Kathy Edin and Bob Putnam as well as other members of Harvard’s project on Inequality and Youth Civic Engagement. Seminar participants at University of Wisconsin, University of Washington, and Columbia University also provided valuable feedback on earlier drafts of this article.

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Correspondence to Bruce Western.

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Western, B., Bloome, D., Sosnaud, B. et al. Trends in Income Insecurity Among U.S. Children, 1984–2010. Demography 53, 419–447 (2016). https://doi.org/10.1007/s13524-016-0463-0

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Keywords

  • Income insecurity
  • Income volatility
  • Poverty
  • Unemployment
  • Children