Extreme Child Poverty and the Role of Social Policy in the United States

This paper applies improved household income data to reevaluate the levels, trends, composition, and role of social policy in extreme child poverty in the U.S. from 1997-2015. Unlike prior research, we correct for the underreporting of means-tested transfers and incorporate the Supplemental Nutritional Assistance Program (SNAP). Doing so reduces the share of children below $2 per day from about 1.8% to 0.1%. That said, we acknowledge use of survey data omits the estimated 1.3 million homeless children in 2014-2015. We find that three different measures of extreme child poverty have declined since 1997. Unlike prior literature’s focus on single motherhood, citizenship status is the more consequential characteristic. Between 58-73% of children in extreme poverty live in households headed by non-citizens. Simulations granting them access to the median SNAP benefit reduce their extreme poverty substantially. Two-way fixed effects models show that higher state-level generosity and take up of SNAP and TANF significantly reduce extreme poverty. Unlike prior research’s focus on the decline of TANF, we show SNAP has grown in generosity and take-up. In turn, changes to social policy since 1997 have probably had offsetting effects on extreme child poverty.