A Roadmap to Reducing

CHILD POVERTY

INTRODUCTION

The Issue

Millions of American children live in families with incomes below the poverty line. A wealth of evidence suggests that growing up in poverty compromises children’s ability to grow and achieve success in adulthood, hurting them and the broader society as well.

The Approach

Congress asked the National Academies of Sciences, Engineering, and Medicine to conduct a comprehensive study of child poverty in the U.S., and to identify evidence-based programs and policies for reducing the number of children living in poverty by half within 10 years. The National Academies appointed a committee with expertise in economics, psychology, cognitive science, public policy, education, sociology, and pediatrics to conduct the study and issue a report.

Possible Solutions

The committee’s report identifies four packages of policies and programs that emphasize both poverty reduction and work incentives that could substantially reduce child poverty in the U.S. This includes two options that reduce child poverty by 50 percent. These packages expand upon existing policies and programs, such as SNAP, the Earned Income Tax Credit, and the Child and Dependent Care Tax Credit, and offer up new ones, such as a national job training program and a universal child allowance. The costs of these packages range from $9 billion to $108.8 billion per year, and have different impacts on child poverty, jobs, and the federal budget.

Explore how each of the four policy packages would affect child poverty and the nation in terms of jobs, taxes, and government costs.

POLICY DIRECTIONS

Work-Based Package

This package combines four policies and programs that have proven to be cost-effective at reducing poverty or promoting work, or both.

Work-Based Plus Universal Supports Package

This package combines expansions of two work-promoting tax credits (the Earned Income Tax Credit and the Child and Dependent Care Tax Credit) with an income support program, the child allowance.

Means-Tested Supports and Work Package

This package expands four existing programs, the Earned Income Tax Credit, the Child and Dependent Care Tax, Credit.

Universal Supports and Work Package

The fourth package combines work incentives, economic security, and social inclusion with some existing programs, plus.

POLICY DIRECTIONS

2. Work-Based Plus Universal Supports Package
This package combines expansions of two work-promoting tax credits (the Earned Income Tax Credit and the Child and Dependent Care Tax Credit) with an income support program, the child allowance.

EITC #1 Increase payments along the phase-in and flat portions of the EITC schedule.
Child Care Policy #1 Convert the CDCTC to a fully refundable tax credit and concentrate its benefits on families with the lowest incomes and with children under the age of five.
Child Allowance Policy #1 Pay a monthly benefit of $166 per month ($2,000 per year) per child to the families of all children under age 17 who were born in the United States or are naturalized citizens.

3. Means-Tested Supports and Work Package
This package expands four existing programs, the Earned Income Tax Credit, the Child and Dependent Care Tax, Credit.

EITC #1 Increase payments along the phase-in and flat portions of the EITC schedule.
Child Care Policy #1 Convert the CDCTC to a fully refundable tax credit and concentrate its benefits on families with the lowest incomes and with children under the age of five.
SNAP Policy #2 Increases Supplemental Nutrition Assistance Program (SNAP) benefits by 35 percent as well as increasing benefits for older children.
Housing Voucher Policy # Increase the number of vouchers directed to families with children so that 70 percent of eligible families that are not currently receiving subsidized housing would use them.

4. Universal Supports and Work Package
The fourth package combines work incentives, economic security, and social inclusion with some existing programs, plus.

EITC #2 Increase payments by 40 percent across the entire schedule, keeping the current range of the phase-out region.
Child Care Policy #1 Convert the CDCTC to a fully refundable tax credit and concentrate its benefits on families with the lowest incomes and with children under the age of five.
Child Allowance Policy #2 Pay a monthly benefit of $225 per month ($2,700 per year) per child to the families of all children under age 17.
Minimum Wage #1 Raise the current $7.25 per hour federal minimum wage to $10.25 and index it to inflation after it is implemented.
Immigration Policy #1 Restore program eligibility for non-qualified legal immigrants. This option would eliminate eligibility restrictions for non-qualified parents and children in the SNAP, TANF, Medicaid, SSI, and other means-tested federal programs.
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Work Based Package

EITC #1 Increase payments along the phase-in and flat portions of the EITC schedule.
Child Care #1 Convert the Child and Dependent Care Tax Credit to a fully refundable tax credit and concentrate its benefits on families with the lowest incomes and with children under the age of five.
Work Advance #2 All male heads of families with children and income below 200 percent of the poverty line would be eligible for WorkAdvance programming. Training slots would be created for 30 percent of eligible men.
Minimum Wage #1 Raise the current $7.25 per hour federal minimum wage to $10.25 and index it to inflation after it is implemented.
report cover Read more about the Work Based Package

Work-Based Plus Universal Supports Package

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EITC #1 Increase payments along the phase-in and flat portions of the EITC schedule.
Child Care Policy #1 Convert the CDCTC to a fully refundable tax credit and concentrate its benefits on families with the lowest incomes and with children under the age of five.
Child Allowance Policy #1 Pay a monthly benefit of $166 per month ($2,000 per year) per child to the families of all children under age 17 who were born in the United States or are naturalized citizens.
report cover Read more about the Work-Based Plus Universal Supports Package

Means-Tested Supports and Work Package

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EITC #1 Increase payments along the phase-in and flat portions of the EITC schedule.
Child Care Policy #1 Convert the CDCTC to a fully refundable tax credit and concentrate its benefits on families with the lowest incomes and with children under the age of five.
SNAP Policy #2 Increases Supplemental Nutrition Assistance Program (SNAP) benefits by 35 percent as well as increasing benefits for older children.
Housing Voucher Policy # Increase the number of vouchers directed to families with children so that 70 percent of eligible families that are not currently receiving subsidized housing would use them.
report cover Read more about the Means-Tested Supports and Work Package
close window

Universal Supports and Work Package

EITC #2 Increase payments by 40 percent across the entire schedule, keeping the current range of the phase-out region.
Child Care Policy #1 Convert the CDCTC to a fully refundable tax credit and concentrate its benefits on families with the lowest incomes and with children under the age of five.
Child Allowance Policy #2 Pay a monthly benefit of $225 per month ($2,700 per year) per child to the families of all children under age 17.
Minimum Wage #1 Raise the current $7.25 per hour federal minimum wage to $10.25 and index it to inflation after it is implemented.
Immigration Policy #1 Restore program eligibility for non-qualified legal immigrants. This option would eliminate eligibility restrictions for non-qualified parents and children in the SNAP, TANF, Medicaid, SSI, and other means-tested federal programs.
report cover Read more about the Universal Supports and Work Package

STATE IMPACT

REDUCTION IN CHILD POVERTY AND DEEP POVERTY RATE

The change in the rates of child poverty and deep poverty under each package

Poverty Deep Poverty

Notes: Poverty data are presented using the Supplemental Poverty Measure and adjusted for underreporting. The data reflect the 2015 tax law applied to the 2015 population. Results for the 2018 tax law applied to the 2015 population are similar and can be found at www.nap.edu/catalog/25246

NATIONAL IMPACT

COST
Total change in government spending,
including changes in tax revenue, but not including adminstrative costs, in billions of dollars

EMPLOYMENT
Change in number of
low-income people employed

EARNINGS
Total change in earnings among
low-income people, in billions


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