Child Poverty and the Social Safety Net in...

Child Poverty and the

Social Safety Net in California

Sarah Bohn and Caroline Danielson

The stakes are high for reducing child poverty

� Economic hardship has a big effect on children

� About one-quarter of California’s children live in poverty

� Rates of child poverty are higher than among � Rates of child poverty are higher than among working-age and older Californians

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Policymakers need an accurate picture of need among the state’s children

� Official poverty measure was devised in 1960s and has not been modified

� California Poverty Measure is more comprehensive and up-to-date

Measures how children are faring across state

and up-to-date

– Measures how children are faring across state regions

– Accounts for impact of safety net programs

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How the California Poverty Measure works

Earnings

Safety net benefits

Medical

Commuting

Child care

Varies by:

Family size

Region

– < >Resources Expenses Poverty threshold*

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Other incomeChild care Region

Homeownership status

* Average threshold $30,063 in 2011

Outline

� Children in or near poverty

� Regional variations in child poverty

� Factors that drive child poverty

� Conclusions and future research� Conclusions and future research

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Our findings are sobering

� 2.3 million children in poverty in 2011

– 25.1% of population age 17 and under

� Our estimate is slightly higher than the official poverty ratepoverty rate

� Rates are declining, but still high

6

Statewide, poverty rates are roughly similar for children of different ages

25.1%26.3%

24.8% 24.2%

15%

20%

25%

30%

rate

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SOURCE: California Poverty Measure estimates for 2011.

0%

5%

10%

15%

All Children 0-5 6-12 13-17

CP

M r

ate

Age

“Deep” poverty is relatively low, but “near” poverty is high

530,000, 6%

1,790,000, 19%

4,530,000, 49% Under 50%

50% to 99%

100% to 149%

150% and above

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2,390,000, 26%

Outline





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Child poverty rates are higher in Los Angeles and Orange counties

Northern16.6%

Bay Area22.4%

Sacramento region22.0%

Central Sierra

16–19

20–23

24–27

28–31

Ranges of child poverty rates (%)

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22.4%

Central Coast26.9%

Central Sierra17.7%

Los Angeles30.6%

Inland Empire22.6%

San Diego26.3%

Orange30.4%

In most areas, rates are higher among younger children

Central Coast

Central Sierra

Bay Area

Sacramento area

Northern

under 5

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0 10 20 30 40

San Diego

Orange

Los Angeles

Inland Empire

Central Coast

CPM rate for children

under 5

6-12

13-17

Outline





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Three major factors drive child poverty

� Cost of living

� Family earnings

� Safety net resources

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Cost of living is higher in populous parts of the state

-$6,000 -$4,000 -$2,000 statewide avg $2,000 $4,000

Bay Area

Sacramento area

Northern

Cost of Living comparison (amount above or below statewide average)

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San Diego

Orange

Los Angeles

Inland Empire

Central Coast

Central Sierra

Bay Area

Most children in poverty live in working families…

Central Coast

Central Sierra

Bay Area

Sacramento area

Northern Earnings of $12,000 or more

Any earnings

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0 20 40 60 80 100

San Diego

Orange

Los Angeles

Inland Empire

Central Coast

Percent

…but family earnings are often below a minimum-wage level

Central Coast

Central Sierra

Bay Area

Sacramento area

Northern Earnings of $12,000 or more

Any earnings

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0 20 40 60 80 100

San Diego

Orange

Los Angeles

Inland Empire

Central Coast

Percent

The social safety net includes many programs with diverse aims

Recipients (millions)

Federal, state, and local expenditures

(billions)

CalWORKs 1.47 $3.44

General Assistance 0.15 $0.40

Supplemental Security Income 1.27 $9.14Supplemental Security Income 1.27 $9.14

CalFresh 3.64 $6.73

Child Tax Credit 2.91 (filers) $4.14

Earned Income Tax Credit 3.27 (filers) $7.25

Federal housing subsidies 0.48 (units) $3.60

School breakfast and lunch 2.18 $2.04

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The safety net plays a major role in mitigating need

� Without major safety net program benefits, 1.3 million more children would be poor

– 420,000 age 5 and under

– 510,000 ages 6 to 12510,000 ages 6 to 12

– 360,000 ages 13 to 17

� In other words, nearly 40 percent of California’s children would be poor

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Safety net resources moderate child poverty across the state

22

22

18

17

21

8

17

21

Central Sierra

Bay Area

Sacramento area

Northern

CPM rate Percentage points higher if no safety net

19


26

30

31

23

27

11

7

15

16

15

0 10 20 30 40 50

San Diego

Orange

Los Angeles

Inland Empire

Central Coast

Percent of children

Disentangling the factors that drive child poverty

� Variation in housing costs means that families need substantially more resources in some regions

– Poor families in high-cost areas do earn more

� Safety net benefits are not tied to the cost of livingSafety net benefits are not tied to the cost of living

– Contributes to regional differences in the impact of the safety net

� Eligibility for, accessibility of, and willingness to enroll in safety net programs also play a role

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Outline





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� 2.3 million of California’s children in poverty

� More than official estimates suggest

� Children in some areas struggle more; but there are high levels of need across the state’s diverse areas

Poverty is a reality for a quarter of California’s children

high levels of need across the state’s diverse areas

� Substantially more children would be poor were it not for safety net program resources

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Can policy make a deeper impact on child poverty?

� Policies to increase the safety net’s impact are routinely debated

� Of current interest:

– Minimum wage– Minimum wage

– State Earned Income Tax Credit (EITC)

� CPM methodology lays groundwork for simulating how proposed changes might affect family budgets and poverty status

– Assessing effects on inequality also possible

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What would it take to eliminate deep poverty among California’s children?

� Among families with children in deep poverty, how much is the total dollar amount of the “gap”?

– We estimate $1.5 - $2.0 billion annually

� How much could be filled by increasing program take up? Raising eligibility thresholds? Increasing How much could be filled by increasing program take up? Raising eligibility thresholds? Increasing benefits?

� What would be principal challenges of targeting?

– What opportunities and challenges do regional differences present?

� Which programs could see the largest increases?

– Opportunity costs of supporting those increases24

Notes on the use of these slides

These slides were created to accompany a presentation.

They do not include full documentation of sources,

data samples, methods, and interpretations. To avoid

misinterpretations, please contact:

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Sarah Bohn ([email protected]; 415-291-4413)Caroline Danielson ([email protected]; 415-291-4462)

Thank you for your interest in this work.

Child Poverty and the

Social Safety Net in California

Sarah Bohn and Caroline Danielson

Child Poverty and the Social Safety Net in...

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