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Why This Topic Is Important
Income and well being are intricately linked. Poverty can alter children's developmental trajectories in cognitive, socio-emotional, and physical health (1). The effects of poverty on child health and well being can begin during pregnancy, as low-income women are more likely to experience malnutrition and stress, and are less likely to receive adequate prenatal care (2). Children who face economic hardship when they are young, or who experience deep and prolonged poverty, are at greatest risk for poor outcomes (1). The effects of poverty and the stress associated with it can be lasting, contributing to increased risk of dropping out of school, poor adult health, and poor employment outcomes, among other adverse consequences (1, 3, 4). The impacts extend beyond individuals, too. For example, it is estimated that the total annual cost of child poverty in the U.S. is more than a trillion dollars, due in part to loss of economic productivity and increased health care costs (5). In addition, for every dollar spent on poverty reduction strategies, the U.S. could save an estimated $7 related to the economic costs of poverty (5).
The link between income and wellness is evident even for those living above the poverty threshold. A health gradient exists along the economic spectrum such that health status improves as income level increases; e.g., the health of those in the middle-income range tends to be inferior to those in higher-income groups (3). This is especially concerning given that income inequality in the U.S. has been increasing in recent decades (6).

Rates of poverty tend to be highest among children under age 5, those in single-parent families, and African American/black and Hispanic/Latino children (4, 7).

For more information on family income and poverty, see kidsdata.org’s Research & Links section.

Sources for this narrative:

1.  American Academy of Pediatrics Council on Community Pediatrics. (2021). Poverty and child health in the United States. Pediatrics, 137(4), e20160339. Retrieved from: https://publications.aap.org/pediatrics/article-abstract/137/4/e20160339/81482/Poverty-and-Child-Health-in-the-United-States

2.  Hamad, R., & Rehkopf, D. H. (2015). Poverty, pregnancy, and birth outcomes: A study of the Earned Income Tax Credit. Paediatric and Perinatal Epidemiology, 29(5), 444-452. Retrieved from: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4536129

3.  Aron, L., et al. (2015). Can income-related policies improve population health? Urban Institute & Virginia Commonwealth University Center on Society and Health. Retrieved from: https://www.urban.org/research/publication/can-income-related-policies-improve-population-health

4.  Murphey, D., & Redd, Z. (2014). Five ways poverty harms children. Child Trends. Retrieved from: https://www.childtrends.org/publications/5-ways-poverty-harms-children

5.  McLaughlin, M., & Rank, M. R. (2018). Estimating the economic cost of childhood poverty in the United States. Social Work Research, 42(2), 73-83. Retrieved from: https://academic.oup.com/swr/article-abstract/42/2/73/4956930

6.  Stone, C., et al. (2020). A guide to statistics on historical trends in income inequality. Center on Budget and Policy Priorities. Retrieved from: https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality

7.  Bohn, S., & Danielson, C. (2017). Geography of child poverty in California. Public Policy Institute of California. Retrieved from: https://www.ppic.org/publication/geography-of-child-poverty-in-california
Policy Implications
Poverty has multiple causes and dimensions, many of which public policy can address. Maintaining a public safety net for pregnant women and families lacking adequate resources for food, clothing, health care, and shelter can mitigate economic hardship (1, 2). Other strategies, such as tax credits and parental work support, also help families meet their basic needs. Reducing child poverty, and income inequality more broadly, requires a long-term commitment from leaders at the local, state, and federal levels, as well as a broad policy strategy targeting poverty's diverse root causes. While California has made strides in recent years, including a new state Earned Income Tax Credit and minimum wage increases, continued efforts are needed to ensure that all children and families have the opportunity to thrive (1).

Policy and program options that could influence family income and poverty include:
  • Maintaining and strengthening CalWORKs (California's version of the federal Temporary Assistance to Needy Families (TANF) program, which provides cash assistance and employment support to families), ensuring that benefits support an adequate living standard and families receive the assistance necessary to transition from welfare to work (1, 3, 4)
  • Ensuring that eligible families enroll in safety net programs—e.g., CalFresh (California's version of the federal Supplemental Nutrition Assistance Program (SNAP), also known as food stamps), the Supplemental Nutrition Program for Women, Infants, and Children (WIC), and free or reduced-price school meals—through outreach and elimination of administrative barriers; also, ensuring that safety net programs have the capacity to expand during economic downturns, when unemployment and family needs increase (1, 4, 5)
  • Maintaining and strengthening tax credits aimed at reducing poverty among families, e.g., the federal Earned Income Tax Credit and Child Tax Credit, and raising awareness about the California Earned Income Tax Credit (1, 6, 7)
  • Extending refundable state tax credits to all families with children, irrespective of immigration status, and including those with no earned income (7)
  • Increasing access to high-quality, affordable child care in a variety of settings, especially for low-income children, by capitalizing on the expansion of federal and state subsidies for early childhood programs and ensuring that eligible children receive subsidies (8)
  • Strengthening and increasing participation in California's Paid Family Leave program by raising the rate of earnings replacement and providing job protection for those who take time away from work to care for or bond with a new child (9)
  • Promoting state and local policies to increase the supply of affordable housing, such as expanding housing bonds, supporting inclusionary zoning requirements, and creating other funding mechanisms (10)
  • Adjusting state tax credits to account for regional variation in the cost of living, and expanding eligibility for safety net programs in particularly high-cost areas (7, 11)
  • Ensuring comprehensive and consistent benefits across public and private health insurance carriers, so that all families can access high-quality, affordable care; this may include increasing Medi-Cal provider rates, reducing the administrative burden on providers, and developing a tool to regularly monitor children's access to quality care in Medi-Cal (8)
  • Continuing to strengthen child support enforcement programs that work effectively with non-custodial parents and ensure that support reaches the families that need it (12)
For more policy ideas and information on this topic see kidsdata.org’s Research & Links section or visit Public Policy Institute of California, California Budget and Policy Center, and Center for Law and Social Policy. Also see Policy Implications on kidsdata.org under Food Security, Housing Affordability and Resources, Health Care, and Early Care and Education.

Sources for this narrative:

1.  Danielson, C., et al. (2021). California's future: Safety net. Public Policy Institute of California. Retrieved from: https://www.ppic.org/publication/californias-future-safety-net

2.  Page, M. (2017). Safety net programs have long-term benefits for children in poor households. UC Davis Center for Poverty Research. Retrieved from: https://poverty.ucdavis.edu/policy-brief/safety-net-programs-have-long-term-benefits-children-poor-households

3.  Davis, L. M., et al. (2016). Evaluation of the SB 1041 reforms to California's CalWORKs welfare-to-work program: Findings regarding the initial policy implementation and outcomes. RAND Corporation. Retrieved from: https://www.rand.org/pubs/research_reports/RR1348.html

4.  Schumacher, K. (2015). Even CalWORKs and CalFresh food assistance combined fails to lift families out of poverty. California Budget and Policy Center. Retrieved from: https://calbudgetcenter.org/resources/even-calworks-and-calfresh-food-assistance-combined-fails-to-lift-families-out-of-poverty

5.  California Department of Public Health, Center for Family Health. (2016). Making connections: Understanding women's reasons for not enrolling in WIC during pregnancy, California 2010-2012. Retrieved from: https://www.cdph.ca.gov/Programs/CFH/DMCAH/MIHA/CDPH Document Library/MIHA-MakingConnections-2010-2012.pdf

6.  Anderson, A. (2017). More awareness should be raised on the California Earned Income Tax Credit. California Budget and Policy Center. Retrieved from: https://calbudgetcenter.org/resources/more-awareness-should-be-raised-on-the-california-earned-income-tax-credit

7.  Bohn, S, & Danielson, C. (2017). Reducing child poverty in California: A look at housing costs, wages, and the safety net. Public Policy Institute of California. Retrieved from: https://www.ppic.org/publication/reducing-child-poverty-in-california-a-look-at-housing-costs-wages-and-the-safety-net

8.  Children Now. (2020). 2020 California children's report card: A survey of kids' well-being and roadmap for the future. Retrieved from: https://www.childrennow.org/portfolio-posts/20-report-card

9.  Stanczyk, A. B. (2016). Paid family leave may reduce poverty following a birth: Evidence from California. Employment Instability, Family Well-Being, and Social Policy Network. Retrieved from: https://cpb-us-w2.wpmucdn.com/voices.uchicago.edu/dist/5/1068/files/2018/05/stanczyk_einetbrief-13l9z7e.pdf

10.  Johnson, H., et al. (2020). California's future: Housing. Public Policy Institute of California. Retrieved from: https://www.ppic.org/publication/californias-future-housing

11.  Bohn, S., & Danielson, C. (2017). Geography of child poverty in California. Public Policy Institute of California. Retrieved from: https://www.ppic.org/publication/geography-of-child-poverty-in-california

12.  U.S. Department of Health and Human Services, Administration for Children and Families. (2021). Office of Child Support Enforcement annual report to Congress FY 2018. Retrieved from: https://www.acf.hhs.gov/css/report/fy-2018-annual-report-congress
How Children Are Faring
In 2018, an estimated 17% of California children lived below the federal poverty threshold ($25,465 annually for a family of two adults and two children). Across counties with data in 2018, official child poverty rates ranged from less than 4% in Marin County to more than 30% in Fresno County. In Merced and Tulare counties in 2018, more than one in eight children lived in deep poverty—i.e., on annual income lower than half the federal poverty threshold ($12,732 for two adults and two children in 2018).

The Supplemental Poverty Measure (SPM) accounts for expenses (e.g., state-level differences in housing costs) and resources (e.g., government safety net program benefits) not captured in the official poverty measure. According to SPM estimates, 13% of California children lived in poverty in 2020. California's SPM child poverty rate consistently exceeds comparable U.S. figures. More than one in five African American/black and Hispanic/Latino children in California lived below their SPM threshold in 2018-2020, compared with fewer than one in twelve of their white and multiracial peers.

The California Poverty Measure (CPM) builds on the SPM by adjusting for California-specific safety net policies and for regional variation in the cost of living within the state. CPM data from 2017-2019 show that 19% of children statewide lived in poverty and 4% lived in deep poverty. In the absence of social safety net programs, it is estimated that the child poverty rate would have been 13 percentage points higher and the deep poverty rate 10 percentage points higher during this period. CPM child poverty rates vary widely across counties, from 10% in Placer County to 24% in Orange County, among regions with data in 2017-2019. Overall, children whose parents are single, non-U.S. citizens, or who did not finish high school tend to experience higher rates of CPM poverty and deep poverty than children in families with married parents, U.S. citizens, and higher levels of educational attainment.

The Self-Sufficiency Standard (SSS) represents the estimated income a family needs to adequately meet its basic needs without public or private assistance. Across California counties, the SSS for a family of two adults and two school-aged children in 2018 ranged from $52,566 (Modoc) to $114,215 (Marin) annually. In 2016, nearly half (48%) of all families with children statewide lived on incomes below their SSS.
Rates of poverty among California women with a recent birth—and, by extension, their children—are especially high. Statewide, an estimated 41% of mothers with a birth in 2013-2014 lived in families with income below the federal poverty guideline ($23,850 for a family of four in 2014); for African American/black and Hispanic/Latina mothers, the poverty rate was 60%, compared with 20% or less for Asian/Pacific Islander and white mothers.

Income is not distributed evenly across California households and regions. Statewide and nationally, when households are divided by income into five equally sized groups, those in the highest quintile earned an estimated 52% of all household income in 2018, compared with a 3% share of total income earned by households in the lowest quintile. Among counties with data, median annual income for families with children ranged from $43,287 in Lake County to $167,766 in Marin County in 2014-2018. Marin County also had the highest level of household income inequality among counties with data in 2014-2018, as measured by the Gini index.

The CalWORKs program, which provides cash aid and services to needy families, served more than 720,000 California children—a rate of 80 per 1,000—in 2020. Among counties with data, participation in CalWORKs ranged from 9 per 1,000 children in San Mateo County to 184 per 1,000 in Del Norte County.