Data released by the U.S. Bureau of the Census on
Tuesday, September 24, show that black child poverty decreased in
2001, reaching the lowest level in U.S. history. This decline in black child
poverty occurred despite the current economic recession which began
in April 2001.
Census Bureau report also shows that, despite the current economic
recession, overall child poverty did not increase in 2001. The failure
of child poverty to rise during a recession is highly unusual. In
all previous recessionary years since the early 1960s, child
poverty increased sharply. Historically, the average increase in
child poverty during a recessionary year has been 1.4 percentage
points. Annual increases in child poverty range from a low of 1.0
percentage point in the recession year 1990 to a high of 1.9
percentage points in both 1980 and 1982.
past recessions, the most severe economic impact invariably has
fallen on children. On average, the increase in child poverty
during recessions has been twice as large as the increase in
poverty among the general population. During the 2001 recession,
this pattern was reversed for the first time. For example, during
prior recessionary years, child poverty increased by an average of
1.4 percentage points while non-elderly adult poverty increased by
only 0.6 percentage point. In 2001, child poverty remained
essentially flat while non-elderly adult poverty increased
significantly by 0.5 percentage point.
typical racial impacts of a recession were also reversed in the
current economic downturn. Historically, recessions have increased
poverty among black and Hispanic children far more than among
non-Hispanic white children. During the 2001 recession, this
long-standing pattern was reversed; poverty among non-Hispanic
white children increased (from 9.1 percent to 9.5 percent) while
poverty among black and Hispanic children actually fell. Among
black children, the poverty rate actually fell by one full
percentage point from 31.2 percent to 30.2 percent.
Obviously, the recession that started in
2001 differs markedly from previous recessions. For individuals and
families without children, the current recession appears to follow
normal patterns. But for families with children, and minorities in
particular, the current recession has clearly broken from the
normal historical pattern.
The Impact of Welfare Reform
unusual changes in poverty during 2001 can be traced back to the
mid-1990s. In the early 1990s, states began to experiment with
welfare reform. In 1996, Congress enacted national welfare reform,
replacing the traditional Aid to Families with Dependent Children
(AFDC) program with a new program called Temporary Assistance to
Needy Families (TANF). Welfare reform, for the first time, required
many welfare recipients either to obtain jobs or to prepare for
After welfare reform, child poverty began
to drop at an unprecedented rate precisely among those groups most
tightly linked to the welfare system: children in single-mother
families, black children, and Hispanic children. Between 1995 (the last year
before enactment of national reform) and 2001, poverty in each of
these three groups dropped by at least 11 percentage points. For
example, Hispanic child poverty fell by nearly one-third, from 40.0
percent in 1995 to 28 percent in 2001.
contrast, poverty among groups unaffected by welfare reform
declined only slightly. For example, poverty among the elderly
dropped from 10.5 percent in 1995 to 10.1 percent in 2001. Poverty
among non-elderly adults fell from 11.4 percent in 1995 to 10.1
percent in 2001.
Historically, non-Hispanic white children
are far less likely to receive welfare than are Hispanic or black
children. Consequently, these children were less affected by
welfare reform. After reform, child poverty declined twice as
rapidly among blacks and Hispanics as it did among non-Hispanic
pattern continued into the current recession. Groups less affected
by welfare reform experienced increases in poverty, but among the
groups most directly affected by reform, normal recession patterns
were disrupted and poverty either remained constant or fell.
Welfare Reform and Black Child
decline in poverty since welfare reform has been particularly
dramatic among black children. As Chart 1 shows, for a
quarter-century prior to welfare reform, there was little change in
black child poverty. Black child poverty was actually higher in
1995 (41.5 percent) than in 1971 (40.4 percent).
the enactment of welfare reform in 1996, black child poverty
plummeted at an unprecedented rate, falling by more than a quarter
to 30.2 percent in 2001. Over a six-year period after welfare
reform, 1.2 million black children were lifted out of poverty. In
2001, despite the recession, the poverty rate for black children
was at the lowest point in national history.
Poverty Among Children of
Since the enactment of welfare reform, the
drop in child poverty among children in single-mother families has
been equally dramatic. For a quarter-century before welfare reform,
there was little net decline in poverty in this group. Poverty was
only slightly lower in 1995 (50.3 percent) than it had been in 1971
(53.1 percent). After the enactment of welfare reform, the poverty
rate for children of single mothers fell at a dramatic rate, from
50.3 percent in 1995 to 39.3 percent in 2001. In 2001, despite the
recession, the poverty rate for children in single-mother families
was at the lowest point in U.S. history.
How Welfare Reform Reduced Child
1996 welfare reform dramatically changed the traditional welfare
system. The reform required, for the first time, that welfare
recipients take a job or prepare for work. As a result, the
caseload in the Temporary Assistance to Needy Families program
dropped by 50 percent. As welfare caseloads fell, employment of
disadvantaged single mothers increased by 50 percent to 100
percent. As the employment of single mothers increased, the poverty
rate in this group fell at an unprecedented rate.
Welfare reform has also kept poverty from
rising in a recession. In prior recessions, single mothers have
tended to leave the labor force and enroll in Aid to Families with
Dependent Children. Families on welfare will, in nearly all cases,
be poor. Thus, as AFDC caseloads rose, child poverty automatically
increased as well.
Welfare reform created pressure for single
mothers to remain in the labor force and not to enter the welfare
rolls. Consequently, the increase in welfare caseloads during the
current recession has been quite modest. The fact that few single
mothers have left the labor force and enrolled in welfare is a
significant factor in preventing the rise of child poverty during
the current recession.
Welfare reform's emphasis on personal
responsibility also affected family patterns. Prior to welfare
reform, the out-of-wedlock birth rate increased at an alarming
pace. In the mid-1960s, 7 percent of all American children were
born outside marriage; by the mid-1990s, the number had risen to 32
percent. With the enactment of welfare reform, the growth of
non-marital childbearing came to a near standstill. The percentage
of black children living in married two-parent families also
increased for the first time in a half-century. This increase in
black married couples has contributed to the decline of black child
Opposition to Welfare Reform
current good economic news about child poverty clashes strongly
with the dire predictions made by opponents of welfare reform. When
welfare reform was enacted in 1996, opponents predicted it would
lead to dramatic increases in child poverty even in good economic
times. The Children's Defense Fund claimed that welfare reform
would cast millions of children into poverty and hunger. The Urban
Institute predicted that the welfare law would cause the incomes of
one out of 10 American families to fall and throw 1.1 million
children into poverty.
Obviously, these predictions were
inaccurate. The exact opposite occurred. In 1995, prior to reform,
14.7 million children lived in poverty; by 2001, the number of poor
children had fallen to 11.7 million. Thus, in 2001, there were
nearly 3 million fewer children in poverty than there had been
before the reform. Similarly, the child poverty rate fell from a
pre-reform level of 20.8 percent in 1995 to 16.3 percent in
Confronted with the obvious fact of
rapidly declining child poverty in the late 1990s, opponents of
welfare reform adopted a fallback position. They argued that reform
had undermined the economic safety net. While reform might work
well in good economic times, the weakened safety net would make the
poor far more vulnerable to economic downturns. When a recession
hit, children would be thrown into poverty in unusually large
Again, the exact opposite has occurred.
Far from rising at above average rates, child poverty, for the
first time, has remained flat during the recession.
Deep Child Poverty
Concern has been raised by some
organizations concerning the so-called severity of child poverty. One measure
of this concept is the percentage of children living in deep
poverty, defined as children who live in families with annual
incomes less than half the official poverty thresholds.
2001, 5.1 million children, or 7.1 percent of all children, lived
in deep poverty. In contrast to child poverty in general, deep
child poverty does appear to have increased slightly during 2001.
However, the rate of deep child poverty in 2001 was lower than in
1995 prior to the enactment of reform, when the rate was 8.5
percent. There were some 800,000 fewer children living in deep
poverty in 2001 than in 1995. The present deep child poverty rate
is also lower than the rate at the beginning of the last recession
in 1990, when the rate was 8.8 percent.
Nonetheless, it is true that deep child
poverty has declined less rapidly in the six years since welfare
reform than has child poverty in single-mother families, or black
and Hispanic child poverty, or child poverty in general. Welfare
reform has clearly had less impact on this group than among the
poor in general. Relatively few parents in these families are
employed. The deep poverty group might best be viewed as the
population that welfare reform has not yet reached.
The Continuing Recession
recession that began in April 2001 has not ended. Unemployment
increased in 2002. This means that when the poverty figures for
2002 are released, they may show that child poverty has risen.
Nonetheless, the poverty figures for 2001
strongly suggest that if child poverty does rise in 2002, the
increase is likely to be modest. If the 2001 census figures are
indicative of the rest of the current recession, they imply that
any overall increase in child poverty is likely to be far lower
than in previous economic downturns.
record of welfare reform is striking. For a quarter-century prior
to welfare reform, black child poverty and poverty among single
mothers remained virtually frozen. After reform, poverty among both
groups dropped rapidly, reaching the lowest levels in U.S. history.
In all recessions since the beginning of the War on Poverty in the
mid-1960s, child poverty has increased sharply; but in the
recession of 2001, child poverty did not rise at all.
track record of the past six years indicates that welfare reform
should be strengthened and expanded. Regrettably, however, the
numerous groups that adamantly opposed reform in 1996 have remained
entrenched in their opposition. Despite occasional lip service to
the contrary, these groups seek a de facto repeal of the current
reform and enjoy strong support for their aims among liberals in
the House and Senate.
evidence demonstrates that, with welfare reform, our nation has
found for the first time a successful policy that can lead to
substantial long-term reductions in child poverty. Current efforts
to undermine reform, if enacted, will have serious negative effects
on the future well-being of low-income Americans.
Rector is a Senior Research Fellow at The Heritage