research on poverty gap

By: Joe Hasell , Max Roser , Esteban Ortiz-Ospina and Pablo Arriagada

Global poverty is one of the most pressing problems that the world faces today. The poorest in the world are often undernourished , without access to basic services such as electricity and safe drinking water ; they have less access to education , and suffer from much poorer health .

In order to make progress against such poverty in the future, we need to understand poverty around the world today and how it has changed.

On this page you can find all our data, visualizations and writing relating to poverty. This work aims to help you understand the scale of the problem today; where progress has been achieved and where it has not; what can be done to make progress against poverty in the future; and the methods behind the data on which this knowledge is based.

Key Insights on Poverty

Measuring global poverty in an unequal world.

There is no single definition of poverty. Our understanding of the extent of poverty and how it is changing depends on which definition we have in mind.

In particular, richer and poorer countries set very different poverty lines in order to measure poverty in a way that is informative and relevant to the level of incomes of their citizens.

For instance, while in the United States a person is counted as being in poverty if they live on less than roughly $24.55 per day, in Ethiopia the poverty line is set more than 10 times lower – at $2.04 per day. You can read more about how these comparable national poverty lines are calculated in this footnote. 1

To measure poverty globally, however, we need to apply a poverty line that is consistent across countries.

This is the goal of the International Poverty Line of $2.15 per day – shown in red in the chart – which is set by the World Bank and used by the UN to monitor extreme poverty around the world.

We see that, in global terms, this is an extremely low threshold indeed – set to reflect the poverty lines adopted nationally in the world’s poorest countries. It marks an incredibly low standard of living – a level of income much lower than just the cost of a healthy diet .

From $1.90 to $2.15 a day: the updated International Poverty Line

What you should know about this data.

• Global poverty data relies on national household surveys that have differences affecting their comparability across countries or over time. Here the data for the US relates to incomes and the data for other countries relates to consumption expenditure. 2
• The poverty lines here are an approximation of national definitions of poverty, made in order to allow comparisons across the countries. 1
• Non-market sources of income, including food grown by subsistence farmers for their own consumption, are taken into account. 3
• Data is measured in 2017 international-$, which means that inflation and differences in the cost of living across countries are taken into account. 4

Global extreme poverty declined substantially over the last generation

Over the past generation extreme poverty declined hugely. This is one of the most important ways our world has changed over this time.

There are more than a billion fewer people living below the International Poverty Line of $2.15 per day today than in 1990. On average, the number declined by 47 million every year, or 130,000 people each day. 5

The scale of global poverty today, however, remains vast. The latest global estimates of extreme poverty are for 2019. In that year the World Bank estimates that around 650 million people – roughly one in twelve – were living on less than $2.15 a day.

Extreme poverty: how far have we come, how far do we still have to go?

• Extreme poverty here is defined according to the UN’s definition of living on less than $2.15 a day – an extremely low threshold needed to monitor and draw attention to the living conditions of the poorest around the world. Read more in our article, From $1.90 to $2.15 a day: the updated International Poverty Line .
• Global poverty data relies on national household surveys that have differences affecting their comparability across countries or over time. 2
• Surveys are less frequently available in poorer countries and for earlier decades. To produce regional and global poverty estimates, the World Bank collates the closest survey for each country and projects the data forward or backwards to the year being estimated. 6
• Data is measured in 2017 international-$, which means that inflation and differences in the cost of living across countries are taken into account . 4

The pandemic pushed millions into extreme poverty

Official estimates for global poverty over the course of the Coronavirus pandemic are not yet available.

But it is clear that the global recession it brought about has had a terrible impact on the world’s poorest.

Preliminary estimates produced by researchers at the World Bank suggest that the number of people in extreme poverty rose by around 70 million in 2020 – the first substantial rise in a generation – and remains around 70-90 million higher than would have been expected in the pandemic’s absence. On these preliminary estimates, the global extreme poverty rate rose to around 9% in 2020. 7

• Figures for 2020-2022 are preliminary estimates and projections by World Bank researchers, based on economic growth forecasts. The pre-pandemic projection is based on growth forecasts prior to the pandemic. You can read more about this data and the methods behind it in the World Bank’s Poverty and Shared Prosperity 2022 report. 8

Hundreds of millions will remain in extreme poverty on current trends

Extreme poverty declined during the last generation because the majority of the poorest people on the planet lived in countries with strong economic growth – primarily in Asia.

The majority of the poorest now live in Sub-Saharan Africa, where weaker economic growth and high population growth in many countries has led to a rising number of people living in extreme poverty.

The chart here shows projections of global extreme poverty produced by World Bank researchers based on economic growth forecasts. 9

A very bleak future is ahead of us should such weak economic growth in the world’s poorest countries continue – a future in which extreme poverty is the reality for hundreds of millions for many years to come.

• The extreme poverty estimates and projections shown here relate to a previous release of the World Bank’s poverty and inequality data in which incomes are expressed in 2011 international-$. The World Bank has since updated its methods, and now measures incomes in 2017 international-$. As part of this change, the International Poverty Line used to measure extreme poverty has also been updated: from $1.90 (in 2011 prices) to $2.15 (in 2017 prices). This has had little effect on our overall understanding of poverty and inequality around the world. You can read more about this change and how it affected the World Bank estimates of poverty in our article From $1.90 to $2.15 a day: the updated International Poverty Line .
• Figures for 2018 and beyond are preliminary estimates and projections by Lakner et al. (2022), based on economic growth forecasts. You can read more about this data and the methods behind it in the related blog post. 10
• Data is measured in 2011 international-$, which means that inflation and differences in the cost of living across countries are taken into account. 4

The rapid progress seen in many countries shows an end to poverty is possible

Each of the countries shown in the chart achieved large declines in extreme poverty over the last generation. 11

The fact that rapid progress against poverty has been achieved in many places is one of the most important lessons we can learn from the available data on extreme poverty.

For those who are not aware of such progress – which is the majority of people – it would be easy to make the mistake of believing that poverty is inevitable and that action to tackle poverty is hence doomed to fail.

The huge progress seen in so many places shows that this view is incorrect.

After 200 years of progress the fight against global poverty is just beginning

Over the past two centuries the world made good progress against extreme poverty. But only very recently has poverty fallen at higher poverty lines.

Global poverty rates at these higher lines remain very high:

• 25% of the world lives on less than $3.65 per day – a poverty line broadly reflective of the lines adopted in lower-middle income countries.
• 47% of the world lives on less than $6.85 per day – a poverty line broadly reflective of the lines adopted in upper-middle income countries.
• 84% live on less than $30 per day – a poverty line broadly reflective of the lines adopted in high income countries. 12

Economic growth over the past two centuries has allowed the majority of the world to leave extreme poverty behind. But by the standards of today’s rich countries, the world remains very poor. If this should change, the world needs to achieve very substantial economic growth further still.

The history of the end of poverty has just begun

How much economic growth is necessary to reduce global poverty substantially?

• The data from 1981 onwards is based on household surveys collated by the World Bank. Earlier figures are from Moatsos (2021), who extends the series backwards based on historical reconstructions of GDP per capita and inequality data. 13
• All data is measured in international-$ which means that inflation and differences in purchasing power across countries are taken into account. 4
• The World Bank data for the higher poverty lines is measured in 2017 international-$. Recently, the World Bank updated its methodology having previously used 2011 international-$ to measure incomes and set poverty lines. The Moatsos (2021) historical series is based on the previously-used World Bank definition of extreme poverty – living on less than $1.90 a day when measured in 2011 international-$. This is broadly equivalent to the current World Bank definition of extreme poverty – living on less than $2.15 a day when measured in 2017 international-$. You can read more about this update to the World Bank’s methodology and how it has affected its estimates of poverty in our article From $1.90 to $2.15 a day: the updated International Poverty Line .
• The global poverty data shown from 1981 onwards relies on national household surveys that have differences affecting their comparability across countries or over time. 2
• Such surveys are less frequently available in poorer countries and for earlier decades. To produce regional and global poverty estimates, the World Bank collates the closest survey for each country and projects the data forward or backwards to the year being estimated. 6
• Non-market sources of income, including food grown by subsistence farmers for their own consumption, are taken into account. This is also true of the historical data – in producing historical estimates of GDP per capita on which these long-run estimates are based, economic historians take into account such non-market sources of income, as we discuss further in our article How do we know the history of extreme poverty?

Explore Data on Poverty

About this data.

All the data included in this explorer is available to download in GitHub , alongside a range of other poverty and inequality metrics.

Where is this data sourced from?

This data explorer is collated and adapted from the World Bank’s Poverty and Inequality Platform (PIP).

The World Bank’s PIP data is a large collection of household surveys where steps have been taken by the World Bank to harmonize definitions and methods across countries and over time.

About the comparability of household surveys

There is no global survey of incomes. To understand how incomes across the world compare, researchers need to rely on available national surveys.

Such surveys are partly designed with cross-country comparability in mind, but because the surveys reflect the circumstances and priorities of individual countries at the time of the survey, there are some important differences.

Income vs expenditure surveys

One important issue is that the survey data included within the PIP database tends to measure people’s income in high-income countries, and people’s consumption expenditure in poorer countries.

The two concepts are closely related: the income of a household equals their consumption plus any saving, or minus any borrowing or spending out of savings.

One important difference is that, while zero consumption is not a feasible value – people with zero consumption would starve – a zero income is a feasible value. This means that, at the bottom end of the distribution, income and consumption can give quite different pictures about a person’s welfare. For instance, a person dissaving in retirement may have a very low, or even zero, income, but have a high level of consumption nevertheless.

The gap between income and consumption is higher at the top of this distribution too, richer households tend to save more, meaning that the gap between income and consumption is higher at the top of this distribution too. Taken together, one implication is that inequality measured in terms of consumption is generally somewhat lower than the inequality measured in terms of income.

In our Data Explorer of this data there is the option to view only income survey data or only consumption survey data, or instead to pool the data available from both types of survey – which yields greater coverage.

Other comparability issues

There are a number of other ways in which comparability across surveys can be limited. The PIP Methodology Handbook provides a good summary of the comparability and data quality issues affecting this data and how it tries to address them.

In collating this survey data the World Bank takes a range of steps to harmonize it where possible, but comparability issues remain. These affect comparisons both across countries and within individual countries over time.

To help communicate the latter, the World Bank produces a variable that groups surveys within each individual country into more comparable ‘spells’. Our Data Explorer provides the option of viewing the data with these breaks in comparability indicated, and these spells are also indicated in our data download .

Global and regional poverty estimates

Along with data for individual countries, the World Bank also provides global and regional poverty estimates which aggregate over the available country data.

Surveys are not conducted annually in every country however – coverage is generally poorer the further back in time you look, and remains particularly patchy within Sub-Saharan Africa. You can see that visualized in our chart of the number of surveys included in the World Bank data by decade.

In order to produce global and regional aggregate estimates for a given year, the World Bank takes the surveys falling closest to that year for each country and ‘lines-up’ the data to the year being estimated by projecting it forwards or backwards.

This lining-up is generally done on the assumption that household incomes or expenditure grow in line with the growth rates observed in national accounts data. You can read more about the interpolation methods used by the World Bank in Chapter 5 of the Poverty and Inequality Platform Methodology Handbook.

How does the data account for inflation and for differences in the cost of living across countries?

To account for inflation and price differences across countries, the World Bank’s data is measured in international dollars. This is a hypothetical currency that results from price adjustments across time and place. It is defined as having the same purchasing power as one US-$ would in the United States in a given base year. One int.-$ buys the same quantity of goods and services no matter where or when it is spent.

There are many challenges to making such adjustments and they are far from perfect. Angus Deaton ( Deaton, 2010 ) provides a good discussion of the difficulties involved in price adjustments and how this relates to global poverty measurement.

But in a world where price differences across countries and over time are large it is important to attempt to account for these differences as well as possible, and this is what these adjustments do.

In September 2022, the World Bank updated its methodology, and now uses international-$ expressed in 2017 prices – updated from 2011 prices. This has had little effect on our overall understanding of poverty and inequality around the world. But poverty estimates for particular countries vary somewhat between the old and updated methodology. You can read more about this update in our article From $1.90 to $2.15 a day: the updated International Poverty Line .

To allow for comparisons with the official data now expressed in 2017 international-$ data, the World Bank continues to release its poverty and inequality data expressed in 2011 international-$ as well. We have built a Data Explorer to allow you to compare these, and we make all figures available in terms of both sets of prices in our data download .

Absolute vs relative poverty lines

This dataset provides poverty estimates for a range of absolute and relative poverty lines.

An absolute poverty line represents a fixed standard of living; a threshold that is held constant across time. Within the World Bank’s poverty data, absolute poverty lines also aim to represent a standard of living that is fixed across countries (by converting local currencies to international-$). The International Poverty Line of $2.15 per day (in 2017 international-$) is the best known absolute poverty line and is used by the World Bank and the UN to measure extreme poverty around the world.

The value of relative poverty lines instead rises and falls as average incomes change within a given country. In most cases they are set at a certain fraction of the median income. Because of this, relative poverty can be considered a metric of inequality – it measures how spread out the bottom half of the income distribution is.

The idea behind measuring poverty in relative terms is that a person’s well-being depends not on their own absolute standard of living but on how that standard compares with some reference group, or whether it enables them to participate in the norms and customs of their society. For instance, joining a friend’s birthday celebration without shame might require more resources in a rich society if the norm is to go for an expensive meal out, or give costly presents.

Our dataset includes three commonly-used relative poverty lines: 40%, 50%, and 60% of the median.

Such lines are most commonly used in rich countries, and are the main way poverty is measured by the OECD and the European Union .More recently, relative poverty measures have come to be applied in a global context. The share of people living below 50 per cent of median income is, for instance, one of the UN’s Sustainable Development Goal indicators . And the World Bank now produces estimates of global poverty using a Societal Poverty Line that combines absolute and relative components.

When comparing relative poverty rates around the world, however, it is important to keep in mind that – since average incomes are so far apart – such relative poverty lines relate to very different standards of living in rich and poor countries.

Does the data account for non-market income, such as food grown by subsistence farmers?

Many poor people today, as in the past, rely on subsistence farming rather than a monetary income gained from selling goods or their labor on the market. To take this into account and make a fair comparison of their living standards, the statisticians that produce these figures estimate the monetary value of their home production and add it to their income/expenditure.

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Interactive Charts on Poverty

Official definitions of poverty in different countries are often not directly comparable due to the different ways poverty is measured. For example, countries account for the size of households in different ways in their poverty measures.

The poverty lines shown here are an approximation of national definitions, harmonized to allow for comparisons across countries. For all countries apart from the US, we take the harmonized poverty line calculated by Jolliffe et al. (2022). These lines are calculated as the international dollar figure which, in the World Bank’s Poverty and Inequality Platform (PIP) data, yields the same poverty rate as the officially reported rate using national definitions in a particular year (around 2017).

For the US, Jolliffe et al. (2022) use the OECD’s published poverty rate – which is measured against a relative poverty line of 50% of the median income. This yields a poverty line of $34.79 (measured using 2017 survey data). This however is not the official definition of poverty adopted in the US. We calculated an alternative harmonized figure for the US national poverty using the same method as Jolliffe et al. (2022), but based instead on the official 2019 poverty rate – as reported by the U.S. Census Bureau.

You can see in detail how we calculated this poverty line in this Google Colabs notebook .

Jolliffe, Dean Mitchell, Daniel Gerszon Mahler, Christoph Lakner, Aziz Atamanov, and Samuel Kofi Tetteh Baah. 2022. Assessing the Impact of the 2017 PPPs on the International Poverty Line and Global Poverty. The World Bank. Available to read at the World Bank here .

Because there is no global survey of incomes, researchers need to rely on available national surveys. Such surveys are designed with cross-country comparability in mind, but because the surveys reflect the circumstances and priorities of individual countries at the time of the survey, there are some important differences. In collating this survey data the World Bank takes steps to harmonize it where possible, but comparability issues remain.

One important issue is that, whilst in most high-income countries the surveys capture people’s incomes, in poorer countries these surveys tend to capture people’s consumption. The two concepts are closely related: the income of a household equals their consumption plus any saving, or minus any borrowing or spending out of savings.

To help communicate the latter, the World Bank produces a variable that groups surveys within each individual country into more comparable ‘spells’ (which we include in our data download ). Our Data Explorer provides the option of viewing the data with these breaks in comparability indicated.

The international-$ is a hypothetical currency that results from price adjustments across time and place. It is defined as having the same purchasing power as one US-$ in a given base year – in this case 2017. One int.-$ buys the same quantity of goods and services no matter where or when it is spent. There are many challenges to making such adjustments and they are far from perfect. But in a world where price differences across countries and over time are large it is important to attempt to account for these differences as well as possible, and this is what these adjustments do. Read more in our article From $1.90 to $2.15 a day: the updated International Poverty Line .

​​According to World Bank data, in 1990 there were 2.00 billion people living in poverty, and in 2019 that had fallen to 0.648 billion. The average fall over the 29 years in between is: (2.00 billion – 0.648 billion)/29 = 46.6 million. Dividing by the number of days (29 x 365) gives the average daily fall: (2.00 billion – 0.648 billion)/(29 x 365) = 128,000. (All figures rounded to 3 significant figures).

The projections are generally made on the assumption that incomes or expenditure grow in line with the growth rates observed in national accounts data. You can read more about the interpolation methods used by the World Bank in Chapter 5 of the Poverty and Inequality Platform Methodology Handbook.

We use the figures presented in the World Bank’s Poverty and Shared Prosperity 2022 report. Earlier estimates were also published in Lakner, C., Mahler, D.G., Negre, M. et al. How much does reducing inequality matter for global poverty?. J Econ Inequal (2022). https://doi.org/10.1007/s10888-021-09510-w . Available online here .

Earlier estimates were also published in Lakner, C., Mahler, D.G., Negre, M. et al. How much does reducing inequality matter for global poverty?. J Econ Inequal (2022). https://doi.org/10.1007/s10888-021-09510-w . Available online here .

The figures are taken from a World Bank blog post by Nishant Yonzan, Christoph Lakner and Daniel Gerszon Mahler. The post builds on and updates the estimates published by Lakner et al. (2022).In September 2022, the World Bank changed from using 2011 international-$ to 2017 international-$ in the measurement of global poverty. The International Poverty Line used by the World Bank and the UN to define extreme poverty was accordingly updated from $1.90 a day (in 2011 prices) to $2.15 (in 2017 prices).In order to match up to the projected figures, the extreme poverty estimates shown here relate to a previous release of the World Bank’s data using data expressed in 2011 prices, which vary slightly from the latest data in 2017 prices. You can read more about this change and how it affected the World Bank estimates of poverty in our article From $1.90 to $2.15 a day: the updated International Poverty Line .Lakner, C., Mahler, D.G., Negre, M. et al. How much does reducing inequality matter for global poverty?. J Econ Inequal (2022). https://doi.org/10.1007/s10888-021-09510-w . Available online here .

We use the figures provided in the blog post, which extend the methods presented in Lakner et al. (2022).Lakner, C., Mahler, D.G., Negre, M. et al. How much does reducing inequality matter for global poverty?. J Econ Inequal (2022). https://doi.org/10.1007/s10888-021-09510-w . Available online here .

Shown are those countries with a decline of more than 30 percentage points over a period of 15 years or more.There are a number of ways in which comparability across the different household surveys on which this data is based can be limited. These affect comparisons both across countries and within individual countries over time.The World Bank’s Poverty and Inequality Platform Methodology Handbook provides a good summary of the comparability and data quality issues affecting this data and how it tries to address them. In collating this survey data the World Bank takes a range of steps to harmonize it where possible, but comparability issues remain. To help communicate the latter, the World Bank produces a variable that groups surveys within each individual country into more comparable ‘spells’. Our Data Explorer provides the option of viewing the data with these breaks in comparability indicated.

You can read more about how the World Bank sets these higher poverty lines, as well as the International Poverty Line against which it measures extreme poverty, in our article From $1.90 to $2.15 a day: the updated International Poverty Line . To the three poverty lines adopted officially by the World Bank – $2.15, $3.65 and $6.85 – we add a higher line broadly consistent with definitions of poverty in high income countries. See our article Global poverty in an unequal world: Who is considered poor in a rich country? And what does this mean for our understanding of global poverty?

For details of the methods used to produce the long-run poverty data see, Moatsos, M. (2021). Global extreme poverty: Present and past since 1820. In van Zanden, Rijpma, Malinowski and Mira d’Ercole (eds.) How Was Life? Volume II: New Perspectives on Well-Being and Global Inequality since 1820. Available from the OECD here .

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Poverty gap

The poverty gap is the ratio by which the mean income of the poor falls below the poverty line.

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The poverty gap is the ratio by which the mean income of the poor falls below the poverty line. The poverty line is defined as half the median household income of the total population. The poverty gap helps refine the poverty rate by providing an indication of the poverty level in a country. This indicator is measured for the total population, as well as for people aged 18-65 years and people over 65.

• Urbanisation, infrastructure and development
• Social policy
• Poverty reduction
• Social and economic risks
• Development
• Sustainable Development Goals (SDGs)
• Centre on Well-being, Inclusion, Sustainability and Equal Opportunity

Access the source dataset in Data Explorer

Related data.

• Indicator Net childcare costs Net childcare costs are the household expenses of using full-time centre-based childcare, after any benefits designed to reduce the gross childcare fees.
• Indicator Poverty rate Poverty rate is the ratio of the population whose income falls below the poverty line.

• Indicator Life expectancy at birth Life expectancy at birth is the average lifespan a newborn can be expected to live, assuming that age-specific mortality levels remain constant.
• Indicator Social support Social support is the share of people who report having friends or relatives whom they can count on in times of trouble.

The World Bank Group is committed to fighting poverty in all its dimensions. We use the latest data, evidence and analysis to help countries develop policies to improve people's lives, with a focus on the poorest and most vulnerable.

Around 700 million people live on less than $2.15 per day, the extreme poverty line. Extreme poverty remains concentrated in parts of Sub-Saharan Africa, fragile and conflict-affected areas, and rural areas.

After decades of progress, the pace of global poverty reduction began to slow by 2015, in tandem with subdued economic growth. The Sustainable Development Goal of ending extreme poverty by 2030 remains out of reach.

Global poverty reduction was dealt a severe blow by the COVID-19 pandemic and a series of major shocks during 2020-22, causing three years of lost progress. Low-income countries were most impacted and have yet to recover. In 2022, a total of 712 million people globally were living in extreme poverty, an increase of 23 million people compared to 2019. 

We cannot reduce poverty and inequality without also addressing intertwined global challenges, including slow economic growth, fragility and conflict, and climate change.

Climate change is hindering poverty reduction and is a major threat going forward. The lives and livelihoods of poor people are the most vulnerable to climate-related risks.

Millions of households are pushed into, or trapped in, poverty by natural disasters every year. Higher temperatures are already reducing productivity in Africa and Latin America, and will further depress economic growth, especially in the world’s poorest regions.

Eradicating poverty requires tackling its many dimensions. Countries cannot adequately address poverty without also improving people’s well-being in a comprehensive way, including through more equitable access to health, education, and basic infrastructure and services, including digital.

Policymakers must intensify efforts to grow their economies in a way that creates high quality jobs and employment, while protecting the most vulnerable.

Jobs and employment are the surest way to reduce poverty and inequality. Impact is further multiplied in communities and across generations by empowering women and girls, and young people.

Last Updated: Apr 02, 2024

Closing the gaps between policy aspiration and attainment

Too often, there is a wide gap between policies as articulated and their attainment in practice—between what citizens rightfully expect, and what they experience daily. Policy aspirations can be laudable, but there is likely to be considerable variation in the extent to which they can be realized, and in which groups benefit from them. For example, at the local level, those who have the least influence in a community might not be able to access basic services. It is critical to forge implementation strategies that can rapidly and flexibly respond to close the gaps.

Enhancing learning, improving data

From information gathered in household surveys to pixels captured by satellite images, data can inform policies and spur economic activity, serving as a powerful weapon in the fight against poverty. More data is available today than ever before, yet its value is largely untapped. Data is also a double-edged sword, requiring a social contract that builds trust by protecting people against misuse and harm, and works toward equal access and representation.

Investing in preparedness and prevention

The COVID-19 pandemic demonstrated that years of progress in reducing poverty can quickly disappear when a crisis strikes. Prevention measures often have low political payoff, with little credit given for disasters averted. Over time, populations with no lived experience of calamity can become complacent, presuming that such risks have been eliminated or can readily be addressed if they happen. COVID-19, together with climate change and enduring conflicts, reminds us of the importance of investing in preparedness and prevention measures comprehensively and proactively.

Expanding cooperation and coordination

Contributing to and maintaining public goods require extensive cooperation and coordination. This is crucial for promoting widespread learning and improving the data-driven foundations of policymaking. It is also important for forming a sense of shared solidarity during crises and ensuring that the difficult policy choices by officials are both trusted and trustworthy.

Overall, with more than 60 percent of the world’s extreme poor living in middle-income countries, we cannot focus solely on low-income countries if we want to end extreme poverty. We need to focus on the poorest people, regardless of where they live, and work with countries at all income levels to invest in their well-being and their future.

The goal to end extreme poverty works hand in hand with the World Bank Group’s goal to promote shared prosperity. Boosting shared prosperity broadly translates into improving the welfare of the least well-off in each country and includes a strong emphasis on tackling persistent inequalities that keep people in poverty from generation to generation.

Our work at the World Bank Group is based on strong country-led programs to improve living conditions—to drive growth, raise median incomes, create jobs, fully incorporate women and young people into economies, address environmental and climate challenges, and support stronger, more stable economies for everyone.

We continue to work closely with countries to help them find the best ways to improve the lives of their least advantaged citizens.

Last Updated: Oct 17, 2023

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What Is the Poverty Gap?

Understanding the poverty gap, u.s. poverty gap, special considerations, poverty gap index, the bottom line.

• Macroeconomics

Poverty Gap: Definition, Measurement, Index

Daniel Liberto is a journalist with over 10 years of experience working with publications such as the Financial Times, The Independent, and Investors Chronicle.

The poverty gap is a ratio showing the average income shortfall of a total population from the poverty line. The poverty line is the minimum level of income required to secure the basic necessities for survival. So, the poverty gap reflects the intensity of poverty in a nation.

Key Takeaways

• The poverty gap reflects the intensity of poverty in a nation, as it reveals the average  income shortfall of the total population from the poverty line.
• The poverty gap is an indicator produced by the World Bank, which measures poverty by examining per capita income and consumption in households.
• The data is available for over 100 countries and is updated semi-annually in April and September.
• The poverty gap statistic is most valuable to economists and government officials for calculating the poverty gap index.
• The poverty gap index measures how extensive and severe poverty is; it divides the mean shortfall from the poverty line by the value of the poverty line.

The poverty gap indicator is produced by the World Bank Development Research Group. It measures poverty by looking at household per capita income and consumption.

The World Bank seeks to measure all people against the same standard. As such, it sets an international poverty line at periodic intervals, calculating the cost of living at any given time by taking into account the going rate for basic food, clothing, and shelter around the world.

In 2017, the international extreme poverty line threshold was updated to $2.15 per day. Two new poverty lines were also introduced, a lower-middle-income threshold of $3.65 and an upper-middle income poverty line of $6.85.

It is challenging to set a common international poverty threshold since different countries have different levels and interpretations of poverty.

The World Bank’s poverty gap data for 2024 is available for 120 countries worldwide and is updated semi-annually in April and September.

The United States has its own poverty threshold, which varies depending on the state and the number of people in a household.

As of 2024, the average threshold for a family of four stood at $31,200. That means that a married couple with two children and an annual household income of $25,000 is judged to live below the poverty line. The poverty gap in this example is $6,200.

*For households with more than 8 persons, add $5,380 for each additional person.

In 2022, the U.S. Census Bureau reported that the official poverty rate was 11.5 percent and there were 37.9 million people living in poverty.

The 2024 U.S. poverty guidelines for Alaska and Hawaii differ, starting at $18,810 and $17,310 for a one-person household, respectively.

The commonly used poverty headcount ratio provides a simple count of all the people below a poverty line in a given population, considering them equally poor. For this reason, it is deemed by some to be a flawed measurement.

The poverty gap statistic is most valuable to economists and government officials for calculating the poverty gap index. The index, also produced by the World Bank, takes the mean shortfall from the poverty line and divides it by the value of the poverty line.

If you multiply a country's poverty gap index by both the poverty line and the total number of individuals in the country, you get the total amount of money needed to bring the poor in the population out of extreme poverty and up to the poverty line, assuming perfect targeting of transfers.

For example, suppose a country has 10 million citizens, a poverty line of $500 per year, and a poverty gap index of 5%. In such a case, an average increase of $25 per individual, per year, would eliminate extreme poverty. The $25 is 5% of the poverty line, and the total increase needed to eliminate poverty is $250 million—$25 multiplied by 10 million individuals.

The poverty gap index is additive. In other words, the index can be used as an aggregate poverty measure, as well as be broken down by various sub-groups of the population, such as region, employment sector, education level, gender, age, or ethnic group.

A higher poverty gap index figure means that poverty is more severe.

Is the Poverty Gap the Same as Income Inequality?

No, income inequality refers to income distributed unevenly throughout a population. The poverty gap is a measure of the distance between a poverty line (a threshold expressed in monetary terms) compared to incomes below the line.

How Many Americans Live in Poverty?

The latest figures show that in 2022, 37.9 million Americans lived in poverty. That is, their income didn't reach the poverty threshold. Officially, those with income above that poverty line aren't considered to live in poverty.

What Does Poverty Gap Mean?

The term "poverty gap" refers to the difference, or gap, between an individual's or household's income and an officially determined level of income (a poverty line) felt to demarcate poverty. For instance, if the poverty line is declared to be $35,000 for any family of four and an actual family of four's income is $25,000, that family lives in poverty, with a poverty gap of $10,000.

The poverty gap is the difference between a financial threshold that represents a poverty line and the actual income of those whose income is below that line. It is a measure of the severity of poverty. The greater the gap, the worse the poverty in which an individual or family lives.

The World Bank Group. " Measuring Poverty: Strategy ."

The World Bank Group. " Poverty and Equity Briefs ."

U.S. Department of Health and Human Services. " 2024 Poverty Guidelines for the 48 Contiguous States and the District of Columbia ."

U.S. Census Bureau. " Poverty in the United States: 2022 ."

World Bank Group. " Data Bank: Metadata Glossary ."

U.S. Census Bureau. " National Poverty in America Awareness Month: January 2024 ."

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The Nation Has Made Progress Against Poverty But Policy Advances Are Needed to Reduce Still-High Hardship

Testimony of Sharon Parrott, President, Center on Budget and Policy Priorities, Before the House Select Committee on Economic Disparity and Fairness in Growth

Chairman Himes, Ranking Member Steil, and members of the Committee, thank you for the opportunity to testify. I am Sharon Parrott, President of the Center on Budget and Policy Priorities, a nonpartisan research and policy institute in Washington, D.C.

This testimony will make three main points. First, the nation’s economic security programs have made tremendous progress over the past 50 years in reducing poverty and advancing equity, but significant gaps in our policies remain, keeping poverty and hardship far higher than they should be. Second, policymakers shored up economic security policies during the pandemic, achieving historic gains against poverty and lowering hardship despite the twin economic and health crises caused by the pandemic. Third, by building on the experiences of the last two recessions and the strong research base for a number of policies, policymakers should make the investments needed to address economic and health insecurity and glaring disparities in hardship and opportunity across lines of race and ethnicity.

This nation’s economic and health security programs are far stronger than they were 50 years ago and do much more to reduce poverty. After accounting for the impact of government benefits and taxes, poverty fell by more than one-third between 1970 and 2017. The progress is due to policy advances. In 1970, economic security programs reduced the number of people in poverty by just 9 percent; by 2017 that figure had jumped to 47 percent. (See Figure 1.)

Government’s increasingly effective role in reducing poverty reflects the creation of programs such as Supplemental Security Income (SSI) for the elderly and disabled (in 1974), the national food stamp program now known as SNAP (made nationwide in 1974), tax credits like the Earned Income Tax Credit or EITC (in 1975) and Child Tax Credit (in 1997), as well the strengthening of older policies such as rental assistance and Social Security. Social Security lifts more people out of poverty than any other program overall, and its impact has grown as the population has aged and more people have retired. But progress in fighting child poverty has been substantial. Among children, the government role went from not reducing poverty at all in 1970 to cutting poverty by 46 percent in 2017; the tax code — because of the EITC and Child Tax Credit — lifts more children above the poverty line than any other individual program.

These stronger policies have reduced poverty for all racial and ethnic groups while also reducing the nation’s still-large racial differences in poverty. For example, government assistance cuts poverty by about half among Black children and among white children, but it lifts a much larger share of Black children out of poverty than of white children because poverty is more widespread among Black children.

Nevertheless, U.S. anti-poverty policies have large gaps that leave U.S. children more exposed to poverty than children in other wealthy nations. For example, the U.S. has a much higher share of children living in families with incomes below half of the national median (a common way of measuring poverty internationally) than any of the world’s 18 other similarly wealthy nations. This is largely due to weaker government aid in the U.S., since many countries have child poverty rates similar to our own before counting government assistance.

In addition, an estimated 12.5 million Americans have “deep poverty” incomes, that is incomes (including government assistance) below half of the poverty line, or below just $14,200 a year for a typical family of four, after corrections for underreporting of government assistance. They include nearly 2 million children under age 18, who are particularly vulnerable to serious hardships that have long-lasting negative impacts, as well as nearly 2 million parents and other adult family members of children.

Although many families know the stresses of struggling to meet basic needs, the widespread nature of this insecurity is not always well understood, because data on such hardships seldom span more than a year of a family’s life. Many more families face hardship over multiple years than in a single year. More than 1 in 4 households, including more than 1 in 3 households with children, experienced a major form of hardship — specifically, an inability to afford adequate food, shelter, or utilities — in one or more of the years 2014, 2015, and 2016, CBPP analysis of Census data finds. Among Black and Latino households with children, roughly 1 in 2 reported one of these hardships, as did more than 1 in 4 white households with children. Even many households who are currently in the middle of the income scale may encounter hardship over time; among the middle third of households with children (ranked by their current annual income), nearly 1 in 3 reported one of these hardships over that three-year span — for example, because their incomes had fallen.

Gaps in economic security programs contribute to these problems. For example, the Child Tax Credit suffers from an “upside-down” design, providing the least help to the children who need it the most. The current design denies the credit entirely to children whose families have less than $2,500 in earnings in a single year and provides less than the full credit to low- and moderate-income families (such as a single parent with two children earning $20,000 working as a home health aide) even as married couples making up to $400,000 can receive the full credit. Some 27 million children receive a partial credit, or none at all, because their families’ incomes are too low.

Similarly, most unemployed workers do not qualify for unemployment insurance because program rules have not kept up with changes in the workforce since the system was established in the 1930s; many low-paid workers, people of color, women, and contract workers in particular, are wholly ineligible for jobless benefits when they lose their jobs. Programs like rental assistance and child care assistance help only a small share of eligible families because funding is inadequate. And the Temporary Assistance for Needy Families (TANF) program provides cash assistance to only a very small share of families with incomes below the poverty line, due to restrictive program rules and programmatic choices that make it hard for families to access assistance.

This nation’s long history of racism and discrimination in jobs, housing, education, and other areas also contributes significantly to poverty — and to the large differences in poverty rates among groups. As of 2017, poverty rates were more than twice as high among Black (20.9 percent) and Latino (20.1 percent) people than among white people (9.8 percent). Child poverty reflected the same dynamic, with Black and Latino child poverty rates at 21.3 and 20.3 percent, respectively, compared to 8.3 percent among white children.

Immigrants and their family members also have unique economic and health security challenges. Given the lack of progress on immigration reform, many immigrants who have been living and working in U.S. communities for decades are blocked from obtaining a lawful immigration status or accessing a pathway to citizenship and, as a result, are often subject to unfair labor practices and wage theft. Moreover, immigrants face systemic barriers to receiving help from economic security programs when they need it. Immigrants without a documented status are barred from receiving most forms of assistance; some immigrants with a documented status are also ineligible. Moreover, some immigrants or their family members are eligible for help through programs like SNAP or Medicaid but face barriers to accessing that help, including the fear that it would hurt their ability to remain in the country.

Poverty is harmful both now and over the long term. The good news is that strong research shows that reducing poverty and economic insecurity not only reduces near-term hardship but also generates lasting benefits. For example, studies have found that when programs provide additional cash assistance, participating low-income young children do better in school and earn more as adults. When elementary and middle school students received access to free school lunches, their academic performance likewise improved. When the food stamp program (now called SNAP) first expanded across the country in stages in the 1960s and 1970s, newly eligible children had better health outcomes, both as newborns and later as adults, and grew up to be more economically self-sufficient.

Another area where public investments can have both short- and long-term benefits is health coverage. Numerous studies have shown that health coverage increases access to care, improves health outcomes, and saves lives. Expanding Medicaid coverage under the Affordable Care Act (ACA), for example, prevented an estimated 19,200 deaths among near-elderly adults just in its first four years, studies found. Health insurance also improves economic security: people with health coverage are less likely to have medical debt, less likely to be evicted, and less likely to face bankruptcy, studies show.

Expansions of public programs over recent decades have greatly improved access to health coverage. Most recently, the ACA expanded Medicaid eligibility for adults and created a system of premium tax credits to help people with low and moderate incomes afford private coverage. While significant progress has been made in expanding coverage, nearly 30 million people were uninsured shortly before the pandemic. They included the 2.2 million people in the Medicaid “coverage gap;” that is, people whose incomes are too low to qualify for premium tax credits but who are ineligible for Medicaid because their states have refused to adopt the Medicaid expansion. Sixty percent of people in the coverage gap are people of color.

In response to the pandemic, policymakers approved a robust relief effort to shore up the nation’s economic security policies. Relief measures included both broad-based policies, like Economic Impact Payments, and policies that targeted those with the greatest needs, like expansions in SNAP benefits, help for those at risk of eviction, and expansions in the EITC and Child Tax Credit.

These measures largely prevented a spike in annual poverty and hardship rates and even reduced poverty significantly. The number of people in poverty fell by 10 million in 2020, the most in more than 50 years, using the Supplemental Poverty Measure (SPM) — the more comprehensive of the government’s two annual poverty measures, which counts both cash and cash-like assistance. [1] Without the COVID relief measures, the number of people with incomes below the poverty line would have risen by 8 million. The pandemic relief measures also increased access to health coverage, helped more unemployed workers weather the storm, prevented evictions, shored up the child care system, prevented many child care programs from going out of business, and ensured that state, local, territory, and tribal governments had sufficient funding to stave off deep budget cuts that could have further slowed the economy and harmed people and communities.

Some of these policies have proven effective at combatting problems that long predated the pandemic and point the way to policy advances the nation should adopt on an ongoing basis. The most notable examples are policies to better support children in low-income families: an expanded Child Tax Credit that provides the full credit to the lowest-income children, increased support for child care, and summer food benefits to prevent an increase in food insecurity when school is out.

Building on the strong research base for what is effective in reducing poverty and hardship, supporting healthy child development, and broadening opportunity, policymakers should make the investments needed to address economic and health insecurity and glaring disparities in hardship and opportunity across lines of race and ethnicity. These investments would both help families meet everyday challenges and have long-term payoffs. They would also put in place a policy infrastructure to meet the needs of families and the economy in the next recession or economic crisis. These policy advances can be financed responsibly, by raising revenues on high-income households. Such policies could include, for example:

• Helping parents make ends meet through the expanded Child Tax Credit. Policymakers should expand the Child Tax Credit and, most importantly, make the full credit available to children in families with the lowest incomes.
• Helping more households afford housing. Policymakers should make significant new investments to make housing more affordable, including expanding the number of Housing Choice Vouchers to help people with low incomes rent housing of their choice in the private market.
• Increasing health coverage and making it more affordable. Policymakers should deliver on the promise of the ACA by expanding affordable coverage to millions more people, by closing the Medicaid coverage gap and extending the expansion in premium tax credits that makes marketplace coverage more affordable.
• Improving the unemployment insurance (UI) system. Policymakers should expand the coverage, duration, and adequacy of unemployment benefits to address the shortcomings of the regular federal-state UI system.
• Strengthening pre-K and child care. Policymakers should increase the accessibility and affordability of high-quality child care and pre-K programs.
• Boosting the income of low-paid workers. Policymakers should permanently boost the EITC for working adults not raising children.
• Addressing structural barriers to supports and work for immigrants. Policymakers should address barriers to economic supports and health coverage for immigrants and their families.
• Creating a national paid leave program. Policymakers should establish a permanent paid family and medical leave program so workers can take paid time off to care for a new child, their own health issue, or a family member’s health condition while remaining connected to their jobs.
• Strengthening and better targeting TANF. Federal policymakers should reverse the long-term decline in the value of federal TANF funding. They also should set stronger national standards to guard against extremely restrictive state eligibility policies that leave many of the families with the greatest needs — including, disproportionately, Black families — with neither employment nor cash assistance
• Addressing food insecurity among children. Policymakers should strengthen proven child nutrition programs to help address a long-standing problem: many children, disproportionately those who are Black or Latino, face periods of food hardship, especially during the summer when they aren’t getting school meals.
• Improving skills and broadening access to higher education. Policymakers should invest in skill building, both through the workforce development system and by making higher education more affordable to students — for those attending right out of high school or as adults later in their careers.

II. Economic Security Programs Are Far Stronger than 50 Years Ago But Leave Substantial Gaps

Because anyone who cannot afford food, shelter, medical care, and other necessities does not have an equal opportunity to succeed in life, ensuring that all people have basic economic security is a core public duty. In the last 50 years, the U.S. has increased economic security and lowered the risk of poverty, and data from before the pandemic reveal that much of that progress is a direct result of economic security programs. Poverty remains troublingly high for all racial groups, however, and large racial inequities across lines of race and ethnicity persist in opportunity and financial insecurity.

Improved Policies Have Greatly Reduced Poverty

In a recent CBPP analysis, poverty — measured comprehensively to include after-tax earnings, food and housing assistance, Social Security, tax credits, and other cash and cash-like resources — fell by more than one-third over the last five decades , from nearly 23 percent in 1970 to about 13 percent in 2017 . [2] Much of this progress reflected changes in the role of government: the amount that assistance programs add to (and taxes take away from) income. How do we know? Because poverty measured in the same way but counting only private or “pre-government” income — that is, omitting government assistance and taxes — edged up slightly over this period, from about 25 percent to nearly 26 percent. (See Table 1.)

Put another way, in 1970, counting income from economic security programs reduced the number of people in poverty by just 9 percent. But by 2017, that figure had jumped to 47 percent. We are doing much more to reduce poverty than we were. If the anti-poverty effectiveness of economic security programs had remained at its 1970 level of 9 percent, over 31 million more people would have been poor in 2017, including 9 million more children.

Note: Figures use Supplemental Poverty Measure (SPM) and 2019 SPM poverty line adjusted for inflation. Figures for 2017 correct for underreporting of benefits from SNAP, Supplemental Security Income, and Temporary Assistance for Needy Families (TANF).

Source: CBPP analysis of SPM data from Columbia Center on Poverty and Social Policy and U.S. Census Bureau. Corrections for underreported benefits from Department of Health and Human Services/Urban Institute Transfer Income Model (TRIM).

Government’s increasingly effective role in reducing poverty reflects the creation of programs such as SSI (in 1974), the national food stamp program now known as SNAP (made nationwide in 1974), tax credits like the EITC (in 1975) and Child Tax Credit (in 1997), as well the strengthening of older policies such as rental assistance and Social Security. Social Security lifts more people out of poverty than any other program, and its impact has grown as the population has aged and more people have retired. But the improvement isn’t limited to seniors; among children, government programs did not reduce poverty at all in 1970 but cut poverty by 46 percent in 2017. [3]

Improving private incomes is important as well, of course, so that households need less help to make ends meet. The last five decades have seen progress in this area, though more is needed. Median income figures are difficult to track over long periods because household living arrangements have changed markedly, with far more small households today than 50 years ago. But median incomes for families with children have risen notably. For families with one child, for example, median income rose 28 percent between 1970 and 2017 (from $59,554 to $76,280, in 2020 dollars). [4]

Unfortunately, the share of children living in families with incomes below the poverty line when only private income is considered fell only slightly over that same period. While some societal changes — such as rising educational attainment, increased labor force participation among women, and a decline in family size — have pushed downward on poverty, other trends have pushed in the opposite direction. These include poor wage growth for many workers, widening inequality, and an increase in single-parent families who don’t receive the child support they need, often because the non-custodial parent cannot afford to pay. These forces have largely canceled each other out, leaving pre-government poverty rates high. [5]

Programs Narrow Large Percentage-Point Gaps in Poverty by Race and Ethnicity

The stronger policies that have driven down poverty overall and among children when the impact of economic security programs and taxes are taken into account have not ended differences in poverty across racial and ethnic groups. But they have shrunk those differences in percentage-point terms, while also lowering poverty for all racial and ethnic groups.

Consider poverty among Black and white children. Using income before government assistance, 16 percent of white and 42 percent of Black children were poor in 2017. Counting the role of government assistance cuts both groups’ poverty rates by about half, to 8 and 21 percent, respectively. While it is shameful that Black children are more than two and a half times likelier than white children to be poor, both before and after counting assistance, it is important also to focus on the children whose families were lifted above the poverty line by public programs. Because poverty is more widespread among Black children, cutting poverty in half means lifting a much larger share of all Black children out of poverty than of all white children.

In that sense, poverty reduction policies affect a larger share of Black children than white children. In 2017, government assistance lifted 7 percent of all white children and 20 percent of all Black children above the poverty line, reducing the Black-white difference in child poverty rates from about 26 percentage points to 13 percentage points.

Fifty years ago, government policies did little to reduce the poverty of Black children, but their growing impact since then has helped lower Black child poverty over time. Measured before counting government assistance, the Black child poverty rate declined from 58 percent in 1970 to 42 percent in 2017; after counting government assistance, it fell by more than twice as much, from 56 to 21 percent. It should be noted that at 42 percent, the pre-government poverty rate among Black children remained well above the equivalent white rate of 16 percent, reflecting continuing barriers to equal opportunity for Black families that stem from systemic racism and under-investment in Black people and communities.

The story is similar for Latino children. Government assistance (net of taxes) did not reduce Latino child poverty rates at all in 1970, [6] but by 2017, it lifted as many as 16 percent of all Latino children above the poverty line. The Latino child poverty rate after government assistance fell from 52 to 20 percent over this period. [7] (See Figure 2.)

Comparable historical figures are not available for other racial and ethnic groups, although data show that government programs lifted 236,000 Asian children (6 percent) above the poverty line in 2017.

Despite reducing poverty by half, U.S. anti-poverty policies have large gaps that leave children more exposed to poverty than other nations’ children. The gaps are harshest for some of the poorest households with the lowest earnings. These policy gaps also affect many more families over time than is widely appreciated, helping explain why, over a three-year period, even many households who are presently middle-income experience economic hardship.

U.S. Child Poverty Rates Are High by International Standards

Twenty percent of U.S. children live in families with incomes below half of the national median, the poverty measure most commonly used for international comparisons. This is a much higher share than in any of the world’s 18 other similarly wealthy nations, where between 3 and 15 percent of children are poor.

One key reason U.S. children are poorer is weaker government aid. Not counting the income families receive from government programs (and looking at pre-pandemic data from approximately 2015), many countries have child poverty rates similar to our own (Canada, France, Germany, and Australia, for example, have child poverty rates within four percentage points of the U.S. rate) and the British and Irish rates are well above the U.S. But all of these countries have markedly less child poverty than we do once government assistance is considered. (See Figure 3.)

The U.S. is alone among similarly wealthy nations in lacking a government-funded child allowance available to the lowest-income children. [8] Recent experience vividly shows how effective this policy tool can be against poverty. After Canada strengthened its child allowance (the Canada Child Benefit) in 2016, for example, Canada’s child poverty rate declined by one-third. [9]

In the U.S., too, expanded Child Tax Credit payments put in place by the American Rescue Plan, and available monthly without regard to family earnings for the last six months of 2021 lowered estimated monthly child poverty by nearly one-third. [10] Unfortunately, Congress allowed that expansion to expire in January 2022, ending this powerful tool for combatting poverty among children.

Millions of People Living in Deep Poverty

We estimate that in 2017, 12.5 million people lived in families with income and government assistance (net of taxes paid) below half of the poverty line, or below just $14,200 a year on average for a family of four, after corrections for underreporting of government assistance in survey data. [11] The people in “deep poverty” included 6.5 million adults aged 18-64 with no children in their family, a group that tends to qualify for the least help from economic security programs. They also included nearly 2 million children under age 18 (and 700,000 children under age 6), who are particularly vulnerable to the effects of low income, as well as nearly 2 million parents and other adult family members of children.

History shows that flawed policy choices can worsen deep poverty. Policies that take away benefits when parents cannot meet a work requirement, which are widespread in state TANF programs, contributed significantly to deep poverty in the 1990s. These policies punish families even if the parents want to work but cannot do so due to their own or their child’s health problems, or cannot find work or cannot work the required number of hours every week, or lack reliable transportation or child care — or even if their employer or the state agency doesn’t properly process the needed paperwork. While exemptions often are available on paper, they can be difficult to apply for and receive in practice, particularly for families dealing with difficult family circumstances.

In the early 1990s, in local cash assistance pilot programs that implemented this type of policy prior to TANF’s creation, deep poverty rates tended to be higher than in a randomly assigned control group, a rigorous evaluation showed. [12]

Nationwide, moreover, deep poverty among children rose in the first decade after the 1996 creation of TANF. Between 1995 (the last full year before TANF’s enactment) and 2005 (a similar point in the business cycle with a similar national unemployment rate), the deep poverty rate among children in single-mother families rose from 5.5 percent to 7.4 percent. (Deep poverty did not increase among children in married-couple families, which were not greatly affected by the 1996 law.) In 2005, an additional 300,000 children lived in deep poverty due to this increase. The increase was also largely concentrated among Black and Latino children.

The children’s deep poverty rate later receded, falling to 2.8 percent in 2017. This partly reflected policymakers’ changes in other programs (such as the Child Tax Credit) and higher participation in SNAP (in part reflecting bipartisan efforts to improve eligible families’ access to the program), which made these benefits somewhat more available to low-paid workers starting in the Great Recession. Monthly cash assistance, however, remained less available than it had been in the mid-1990s, limiting the progress against deep child poverty from those other policy changes. State spending on TANF cash assistance has dwindled as states have found more ways to reduce access to basic assistance. At the same time, unemployment benefits often exclude workers such as gig workers, people who lose work for illness or other family reasons, and part-time workers. (See further discussion below.)

All of this means that a parent who loses their job part-way through the year and can’t access TANF or unemployment benefits might have no source of cash income to cover basic expenses —rent, utilities, gas, diapers, medical needs, or new clothing for growing children — until they file their taxes the following year, when they might receive the Earned Income Tax Credit or Child Tax Credit.

Economic Insecurity Is More Widespread When Measured Over Multiple Years

Although many families know the stresses of struggling to meet basic needs, the widespread nature of this insecurity isn’t clear in official statistics because data on such hardships seldom span more than a year of a family’s life. Many more families face hardship — defined as inability to afford necessities — over multiple years than in a single year. Examining families’ economic circumstances over several years provides a fuller picture of hardship in the U.S.

CBPP analysis of Census Bureau data, newly redesigned to allow tracking of people’s hardships over multiple years, reveals how widespread economic insecurity was even before the pandemic.

More than 1 in 4 households, including more than 1 in 3 households with children, experienced a major form of hardship — specifically, an inability to afford adequate food, shelter, or utilities — in one or more of the years 2014, 2015, and 2016. [13]

Among Black and Latino households with children, roughly 1 in 2 reported one of these hardships, as did more than 1 in 4 white households with children. Even many households who are currently in the middle of the income scale may encounter hardship over time; among the middle third of households with children (ranked by their current annual income), nearly 1 in 3 reported one of these hardships over that three-year span.

High expenses for necessities like housing, child care, and medical care are a key source of financial strain. In one or more of the years from 2014 to 2016, among all households with children:

• 28 percent paid more than half of their income for housing (compared with a 14 percent one-year rate for the average of those three years). The Department of Housing and Urban Development considers housing unaffordable if it costs more than 30 percent of household income.
• 23 percent paid at least 10 percent of their income for child or dependent care (compared with an 11 percent one-year rate). [14] Experts recommend spending no more than 7 percent of income on child care, and spending more than 10 percent is considered unaffordable under current federal guidance. [15]
• 43 percent of households with children included at least one person who had no health coverage (compared with a 25 percent one-year rate), leaving households at risk of financial hardship due to medical bills and debt and likely leading some to forgo needed health care.

These expenses strain the family budgets of a larger share of Black and Latino households than white households. For example, over the three-year period, some 39 percent of Black households, 38 percent of Latino households, and 21 percent of white households paid more than half of their incomes for housing.

Other adverse consequences may follow. Families with high housing, child care, and health costs often experience hardship — that is, an inability to pay bills — in other areas as well:

• Housing. Households that must pay more than 50 percent of income for housing often have little left over for other needs and are vulnerable to foreclosure, eviction, and homelessness. In our data, households with children were twice as likely to experience food, housing, or utility hardship (that is, they were sometimes unable to pay their food or utility bills or experienced food insecurity) in a given year if they paid more than 50 percent of income for housing that year (34 percent) than if they paid less (17 percent).
• Child care. Unaffordable child care arrangements can squeeze out other necessities, restrict parents’ (typically mothers’) employment, and force children into unsafe or low quality care. In our data, households with children under age 6 that paid for child care were nearly twice as likely to experience food, housing, or utility hardship in a given year if they paid more than 10 percent of income for child care (19 percent) than if they paid less (11 percent).
• Health coverage. Lapses in health coverage leave families susceptible to catastrophic out-of-pocket medical costs. In our data, households with children were nearly twice as likely to experience food, housing, or utility hardship in a given year if someone lacked health coverage at some point that year (30 percent) than if everyone was insured (16 percent).

Gaps in Economic Security Programs Contribute to These Outcomes

Gaps in our economic security programs leave individuals and families vulnerable to hardship. For example:

• T he Child Tax Credit excludes those with the lowest incomes. An increasing share of economic security assistance in the U.S. comes from tax credits. Unfortunately, the design of one such credit, the $2,000-per-child Child Tax Credit is “upside down;” it shortchanges the poorest families, denying eligibility to those earning less than $2,500 in a year and providing less than the full credit to families whose earnings are above that but still low or moderate. A single mother with two children doesn’t qualify for the full Child Tax Credit until her earnings reach about $29,400. Yet the tax code provides the full credit to married filers making as much as $400,000. Some 27 million children receive a partial credit or none at all because their families’ incomes are too low, including half of Black and Latino children, 1 in 5 white children, and half of children (of any race) living in rural areas.

Unemplo yment insurance (UI) does not adequately help most workers. In the decade prior to the pandemic, the majority of jobless workers didn’t qualify for unemployment insurance benefits and those who did qualify received less than half of their previous pay, on average. [16] The share of unemployed workers receiving UI (not including the pandemic, when policymakers temporarily expanded access) has declined over many decades, reaching an all-time low of less than 30 percent prior to the pandemic. One reason is that program rules have not kept up with changes in the workforce since the system was established in the 1930s, including the increase of women in the workforce and the more recent rise of so-called gig workers. State policies often exclude workers who were in low-paying jobs, entered the labor market more recently, work part time, or lost their jobs for family or health reasons.

In the last decade, another factor driving UI coverage downward has been the deliberate effort by many states to reduce access to these benefits. Ten states now provide fewer than the traditional 26 weeks of UI benefits to qualifying workers, and three additional states have enacted cuts in UI duration starting next year. [17] More broadly, the strength of unemployment insurance programs varies widely by state. For example, prior to the pandemic, only 1 in 10 unemployed workers received UI benefits in North Carolina but nearly 6 in 10 did in New Jersey. [18] Benefit amounts also varied greatly, from a weekly average of $213 in Mississippi to $527 in Massachusetts. [19]

Cash assistance for families with the lowest incomes has dwindled. In the years since policymakers replaced the nation’s main source of monthly cash aid for low-income children, Aid to Families with Dependent Children (AFDC), with the more restrictive TANF program in 1996, the value of federal TANF funding has fallen 40 percent, after adjusting for inflation. States have diverted much of this diminishing funding to child care, child welfare services (such as abuse and neglect prevention), and other purposes rather than cash aid, including programs not focused on helping low-income families. [20]

States have taken advantage of the considerable freedom they have under the TANF block grant to implement policies that restrict access to the program, including upfront work requirements and policies that take benefits away from an entire family if a parent can’t meet a work requirement or if the family receives benefits for more than an arbitrary amount of time. As a result, too few families struggling to make ends meet can receive help. If TANF had the same reach in 2020 as AFDC did in 1996, 2.38 million more families nationwide would have received cash assistance. Instead, in 2020, for every 100 families in poverty nationwide, only 21 received TANF cash assistance — down from 68 families in 1996. [21]

Recent research has shown that states where Black residents make up larger shares of the population spend less TANF funding on basic assistance, have lower monthly benefit levels, and have more punitive policies that take families’ benefits away for not meeting work requirements. In fact, 52 percent of Black children in the U.S. live in states with benefit levels below 20 percent of the poverty line, compared to 41 percent of Latino children and 37 percent of white children.

• Child care and rental assistance work well for families who receive it, but most families eligible for help paying for child care and rent don’t get it because funding is inadequate. Only about 1 in 4 households eligible for rental assistance receive it, because funding — which is set annually through the appropriations process — falls far short of what is needed. [22] Similarly, prior to the pandemic, only about 1 in 7 children whose families were eligible for child care assistance received it. [23] Child care’s steep price tag — the average cost of center-based care for a toddler exceeded $10,000 in a majority of states in 2020 — puts it out of reach for workers who are paid low wages if they don’t receive assistance. [24]

Racism and Bias Contribute to Large Racial and Ethnic Differences in Poverty

Our success as a nation ultimately depends on whether all families, regardless of race or ethnicity, have the opportunity to thrive. But a long and continuing history of racism and bias has erected racial barriers to success, restricting opportunities for people of color in jobs, housing, education, and other areas and fueling racial and ethnic differences in economic security.

Job discrimination, for example, remains common. Mock resumes submitted with stereotypically white-sounding names were between 24 and 29 percent more likely to receive a callback than equivalent resumes with Black-sounding names and 25 to 31 percent more likely than Hispanic-sounding names, according to an overview of dozens of recent studies. [25]

Housing discrimination and insufficient enforcement of fair housing rules create further barriers. When real estate agents responded to renters’ inquiries about recently advertised housing, they gave Black renters information on 11.4 percent fewer available units than equally qualified white renters and showed them 4.2 percent fewer units, one study found. Similarly, agents gave Hispanic renters information on 12.5 percent fewer units (compared to white renters) and showed them 7.5 percent fewer, and gave Asian renters information on 9.8 percent fewer units and showed them 6.6 percent fewer. [26]

While many public economic security policies advance racial equity, other government policies and practices undermine it. For example:

• State tax rules dating from periods when discrimination and racism were more overt than today contribute to the underfunding of schools and other public services. For example, many state constitutions require a legislative supermajority vote of 60 percent or more to raise revenue, which makes it difficult to adequately fund schools and other services that promote equal opportunity. The oldest such supermajority requirement still on the books in any state dates from 1890 in Mississippi. Delegates there adopted the measure at the same state constitutional convention at which they disenfranchised nearly all of the state’s Black voters. Referring to his fellow convention delegates, the delegate who introduced the supermajority requirement stated, “All understood and desired that some scheme would be evolved which would effectually remove from the sphere of politics in the State the ignorant and unpatriotic negro.” [27]
• Research consistently shows that Black families are more likely than white families to have their TANF benefits taken away — that is, to be sanctioned — for inability to demonstrate compliance with a work requirement . [28] Researchers who presented TANF case workers with fictitious case examples in order to study racial bias found that, all else being equal, caseworkers were significantly more likely to say they would take benefits away from a Black mother with previous sanctions (94 percent) than an otherwise identical white mother with previous sanctions (77 percent). [29]

Decades of past racial discrimination also take a toll on parents’ wealth, education, job networks, and other resources, which in turn affects their children’s economic security and educational opportunities. Today’s Black and Latino parents, for example, grew up in decades that featured even higher poverty rates and lower incomes than today. Similarly, today’s higher poverty and economic insecurity rates among Black and Latino children, which research tells us shortchanges their futures, will have follow-on consequences for their economic security as adults (and the economic security of their children).

Past and present discrimination in both private markets and public policies left poverty rates in 2017 more than twice as high among Black (20.9 percent) and Latino (20.1 percent) people than among white people (9.8 percent). Child poverty reflected the same dynamic, with Black and Latino child poverty rates at 21.3 and 20.3 percent, respectively, compared to 8.3 percent among white children.

Reducing Poverty Has Lasting Benefits

Poverty is harmful both in the near term and over the long term. The good news is that strong research shows that reducing poverty and economic insecurity not only reduces near-term hardship but improves long-term outcomes.

Studies link additional income with better outcomes for children in families with low incomes, including better educational performance and attainment, higher earnings in adulthood, and better health, which can yield benefits for children and their communities over the course of their lives. [30]

Studies have found, for example, that: [31]

• When children grew up in a household receiving additional cash benefits, their academic achievement increased.
• When elementary and middle school students received access to free school lunches, their academic performance improved.
• When families with low incomes received rental assistance, they were less likely than unassisted families to experience homelessness, housing instability, or overcrowding — problems linked to far-reaching harmful effects on families and children.
• Assistance paying for quality child care can help families make ends meet and increase parental employment rates while also improving children’s behavioral and academic outcomes.
• When children had access to quality pre-kindergarten at age 4, they were likelier to enter college on time.
• When high school students were guaranteed grants to pay for community college, they were likelier to complete community college.
• When low-income college students received additional grants, they were likelier to persist in and complete college — even more so when grant aid was combined with additional supports.
• When parents had access to paid family leave, rates of early births and low birthweights declined, especially for Black mothers, whose incidence of these problems started higher.
• When mothers received more cash assistance in a recent randomized trial, results suggested promising changes in babies’ brain development. [32]

A Consensus Study Report from the National Academy of Sciences underscored the difference that anti-poverty programs can make for children: “Many programs that alleviate poverty either directly, by providing income transfers, or indirectly, by providing food, housing, or medical care, have been shown to improve child well-being.” [33]

Poverty and hardship take a toll on adults as well as children. Simply raising monetary concerns for people with low income can erode their cognitive performance even more than serious sleep deprivation, one study showed. [34] Another study found that low-income mothers given larger tax credits showed signs of reduced stress, such as less inflammation and lower diastolic blood pressure. [35]

Health Coverage Central to Both Good Health and Economic Security

Numerous studies have shown that health insurance coverage increases access to care, improves health outcomes, and saves lives. [36] Expanding Medicaid coverage under the ACA, for example, increased the receipt of health care ranging from cancer diagnosis to smoking cessation treatment, and it lowered infant mortality, opioid deaths, and cardiovascular mortality for middle-aged adults. And, in its first four years, Medicaid expansion prevented an estimated 19,200 deaths among near-elderly adults, studies found. Expansion also lowered maternal mortality, particularly the elevated mortality rates of Black mothers. [37]

Health insurance is also fundamental to economic security. It lowers medical debt (the most common form of debt, held by 100 million people in the U.S.) [38] and the risk of facing catastrophic out-of-pocket medical costs. [39] It also reduces evictions and bankruptcies and improves credit scores. [40] Medicaid in childhood has been found to improve school performance, and, as the children reach adulthood, to reduce their risk of disability and increase their labor supply. [41]

Expansions of public programs over recent decades have greatly improved access to health coverage. Medicaid, created in 1965, has been expanded multiple times: in 1989 to include children under age 6 in families with incomes up to 133 percent of the federal poverty level, for example, and in 1990 to cover children up to age 18 under 100 percent of the federal poverty level. In 1997, the Children’s Health Insurance Program (CHIP) was signed into law to provide coverage for children whose family incomes were low but not low enough to qualify for Medicaid. CHIP provided incentives for states to further increase eligibility for children, and nearly every state now provides coverage for children up to at least 200 percent of poverty. [42] And, some states used their new flexibility starting in 1996 to expand coverage for parents with low incomes who were not receiving cash assistance.

This progress, however, was largely limited to children, pregnant or postpartum adults, and in some states, parents. A significant expansion for adults did not come until the ACA passed in 2010. It expanded Medicaid eligibility for adults up to 138 percent of poverty for states that chose to expand. The ACA also created a system of premium tax credits that allows people with low and moderate incomes to purchase subsidized private coverage through the ACA marketplaces.

The Medicaid expansion was intended as a mandate but a Supreme Court decision made it a state option, and 12 states (many of them in the South) have refused to adopt it. As a result, some 2.2 million people with incomes below the poverty level — 60 percent of whom are people of color — fall into the Medicaid coverage gap. [43] That is, their incomes are too low for them to qualify for tax credits to purchase coverage in the ACA marketplace, but they are ineligible for Medicaid because their states have refused to adopt the expansion. [44]

Some 71 million people [45] were enrolled in Medicaid and CHIP as of February 2020, [46] prior to the pandemic, and about 14.5 million people signed up for coverage through the ACA marketplaces during the 2022 open enrollment period. [47] The overwhelming majority of people with marketplace coverage receive premium tax credits to defray some of the cost. [48]

While significant progress in expanding health coverage has been made, nearly 30 million people were uninsured shortly before the pandemic, including the 2.2 million in the Medicaid coverage gap. [49] Latino and Black people are more likely to be uninsured than other groups; prior to the pandemic, their uninsured rates were 18.7 percent and 10.1 percent, respectively, compared to 6.3 percent for white, non-Latino people.

III. U.S. Shored Up Economic Security Policies During Pandemic

The COVID relief effort was robust and featured a number of successful policy innovations. As a result, the nation achieved historic gains against poverty and lowered hardship despite the twin economic and health crisis caused by the pandemic.

Relief measures included both broad-based policies, like Economic Impact Payments, and policies that targeted those with the greatest needs, like expanding access to unemployment benefits and increasing benefit levels, expanding SNAP benefits and getting food assistance to children missing out on school meals, helping those at risk of eviction, and expanding the EITC and Child Tax Credit. (While the child credit expansion was broad based, it also made the full credit available to the lowest-income children for the first time.) Policymakers also increased access to health coverage during the pandemic by helping more people stay connected to Medicaid and making marketplace coverage more affordable. Measures targeting those facing the greatest need were critical in preventing spikes in poverty, hardship, and lack of health coverage; they also promoted equity amidst a pandemic and economic crisis that hit Black, Indigenous, and Latino people particularly hard.

Such bold action was necessary, in large part, because of the underlying gaps in our economic and health security programs. If, for example, our unemployment insurance system was more robust, covering more workers who lose their jobs and providing more adequate benefits, some of the emergency measures wouldn’t have been needed, states wouldn’t have scrambled to implement those measures while handling a spike in applications, and delays in providing needed aid would have been less severe.

But since robust measures were taken, we learned quite a bit about the effectiveness of some of these policies at combatting problems that long predated the pandemic and point the way to policy advances the nation should adopt on an ongoing basis. These include policies that:

• Support children in families with low incomes, including an expanded Child Tax Credit that provides the full credit to children in the lowest-income families, increased support for child care, and summer food benefits to prevent an increase in food insecurity when school is out;
• Boost health coverage, including expanded premium tax credits to make marketplace coverage more affordable and increased continuity of Medicaid coverage (though very low-income people in non-expansion states continued to go without coverage during the pandemic because steps were not taken to close the coverage gap);
• Support workers, including an expanded EITC for workers without children and a revamped unemployment insurance system that protects workers when they lose their jobs and ensures that a temporary job loss does not create a financial crisis for workers and their families; and
• Help low-income households afford housing and avert eviction, such as expanded housing vouchers and eviction prevention assistance.

The federal response was not perfect. Many individuals and families experienced long delays before obtaining benefits, services, and supports. Policymakers allowed aid to stall in the latter part of 2020, leading to unnecessary hardship that swifter action could have avoided. But overall, the effort was highly effective at mitigating harm during an enormously difficult chapter in the nation’s history.

Relief Measures Were Large, Wide-Ranging

It is difficult to overstate the importance of federal relief policies in preventing greater hardship during the pandemic. The pandemic’s sharp earnings declines could have triggered suffering unprecedented in the post-World War II era, as well as a more protracted downturn and longer period of high unemployment. While many families had harsh financial ups and downs due to the severity of the crisis and delays and gaps in assistance, relief measures lifted many households’ incomes above pre-pandemic levels for 2020 as a whole, turning a likely near-record spike in poverty into a remarkable overall decline in poverty in annual Census figures.

The number of people with annual income below the poverty line in 2020 fell by 10 million from the year before, using the Supplemental Poverty Measure (SPM), which counts both cash and cash-like assistance in determining poverty status. This one-year decline was the largest in more than 50 years and brought this measure of poverty to its lowest point on record, in data back to 1967. [50] Without the government assistance provided through COVID relief measures, the number of people in poverty would have risen in 2020 by 8 million, the second-largest amount on record. [51] Government assistance lifted 53 million people above the poverty line in 2020, well above the previous record of 40 million people in 2009. (The decline in the poverty rate was also the largest in more than 50 years. See Figure 4.)

While final annual poverty figures for 2021 are not yet available, it is clear that relief measures — including those enacted in 2020 and those in the American Rescue Plan — had a sizable impact on poverty in 2021; poverty would have been markedly higher without them. According to multiple projections, poverty in 2021 is likely to remain well below any pre-pandemic level on record, with data back more than 50 years.

Indeed, a number of preliminary projections suggest that the American Rescue Plan could prove to be the single most effective piece of legislation since the 1935 Social Security Act for reducing poverty and economic hardship in a given year. (The 2020 CARES Act may come close, and the combination of CARES and the other relief measures enacted in 2020 may well have jointly reduced poverty by more than the Rescue Plan alone.)

Columbia University researchers estimate that the Rescue Plan’s advance Child Tax Credit payments reduced the number of children in monthly poverty in December 2021 by 3.7 million. (When the payments expired the following month, child poverty snapped back upward by over 40 percent.) The Rescue Plan overall, including the Child Tax Credit expansion as well as other major provisions such as $1,400-per-person Economic Impact Payments, SNAP benefits, expanded unemployment benefits, a larger EITC for workers without children, and a Child and Dependent Tax Credit expansion, is projected to have reduced annual poverty in 2021 by more than 12 million people when compared with poverty without this aid. That includes 5.6 million children kept out of poverty by the Rescue Plan, a reduction in child poverty of 56 percent. [52]

Indications of the potency of the policy response in reducing hardship include the following:

• Major measures of food hardship held steady, despite record job losses . The rate of food insecurity in 2020 (the latest year for which the Department of Agriculture has detailed annual data) was statistically unchanged from 2019. Less detailed weekly data from the Census Bureau showed the number of adults reporting that their household didn’t get enough to eat in the last seven days fell sharply in 2021 after each of a number of infusions of relief payments, including the Economic Impact Payments and monthly Child Tax Credit benefits provided by the American Rescue Plan. [53]
• Medicaid enrollment increased by over 16 million from February 2020 to February 2022 due to relief provisions that provided continuity of coverage , and ACA marketplace enrollment grew by more than 3 million from 2020 to 2022. Without these measures, the number of people without health coverage during a pandemic almost certainly would have risen.
• Despite significant administrative challenges, millions of people received jobless benefits because of temporary eligibility expansions and tens of millions received increased benefits. Jobless benefits kept 5.5 million people out of poverty in 2020, Census data show. The Urban Institute projected during 2021 that unemployment benefits overall would keep 6.7 million people above the poverty line that year and that the Rescue Plan’s expansion of these benefits alone would lower poverty from 13.7 to 12.6 percent, or by more than 3 million people. [54]
• There was no surge in evictions in 2021 when the national eviction moratorium was lifted even though millions of people were behind on rent. This was due to relief measures overall that helped households make ends meet and brought back jobs more quickly as well as to critical housing-specific measures. More than 5.7 million households received emergency rental assistance from January 2021 through April 2022 to help them with past-due and current rent bills, forestalling eviction for many.

The economic fallout from the pandemic was especially severe for workers in low-paid sectors of the economy, such as restaurants and hospitality, in which people of color and women are overrepresented. Black and Latino people entered the pandemic with lower incomes and fewer assets due to structural racism and discrimination, which have limited opportunities for people of color in employment, housing, education, and other areas. This meant that many elements of the pandemic response that targeted those with the greatest need had particularly large, positive impacts on Black and Latino people.

At the same time, many relief measures excluded some immigrants, who are important members of our communities and who were particularly affected by the pandemic and recession, and immigrants and their families often feared receiving help they qualified for. The American Rescue Plan helped by expanding access to Economic Impact Payments — providing them to people with Social Security numbers who lived with others without an SSN — and the Biden Administration has taken steps to reduce fear among immigrants and their families so that they don’t forgo help they need and qualify for.

Surveying the relief policies’ impacts on hardship, H. Luke Shaefer of the University of Michigan concluded: “While we should always think about the ways that we can do better, I think it is also critical to recognize the successes we have had. This is the best, most successful response to an economic crisis that we have ever mounted, and it is not even close. [55] (Emphasis added.)

Pandemic Relief, Other Evidence Provide Lessons for Policymakers

The COVID relief effort teaches that well-designed relief measures can reduce the harm done by a recession or crisis, largely avoiding widespread hardship . The measures we put in place in 2020 and 2021 largely prevented a spike in annual poverty and hardship rates and even reduced poverty significantly as compared to pre-pandemic levels, increased access to health coverage, helped more unemployed workers weather the storm, prevented evictions, shored up the child care system, prevented many child care programs from going out of business, and enabled state, local, territory, and tribal governments to stave off deep budget cuts that could have further slowed the economy and harmed people and communities.

Economic and health security programs have an important role to play even when the economy is healthy, by supporting individuals and families who nonetheless fall on hard times due to job loss or other factors. Many people are paid low wages that aren’t enough to make ends meet. And personal circumstances such as a worker’s illness or a family member’s need for care can lead families to need help. Finally, in a dynamic economy, resources are constantly reallocated to their most effective use. This means that even in times of economic growth, some businesses are closing and jobs are being lost.

Shoring up our permanent economic and health security policies would not only improve well-being and reduce poverty in the short term but also, as discussed above, expand opportunity and promote well-being over the long term. Multiple studies demonstrate lasting benefits from a wide array of programs, both those counted as income in the SPM (such as cash assistance, nutrition and rental assistance, child nutrition, and tuition assistance) and policies such as quality child care, preschool, and paid parental leave that can lift families’ earnings.

Strengthening economic and health security policies can also strengthen the nation’s resiliency to recessions and other crises. Currently, our “automatic stabilizers” — the features of tax laws and spending programs like unemployment insurance and SNAP that automatically reduce income losses and support consumer spending in a downturn — are weaker than in other countries. This requires policymakers to enact larger temporary discretionary measures to mitigate the effects of a downturn, as during the pandemic. If we had a stronger set of economic and health security policies that automatically helped more people when they fall on hard times, fewer discretionary measures would be necessary during a recession, mitigating the risk that policymakers may not act quickly enough or do enough to assist those in need.

IV. Investing in Families, Children, and Workers Would Improve Economic Security and Broaden Opportunity

Building on the experiences of the last two recessions and the strong research base for a number of policies, policymakers should make the investments needed to address economic and health insecurity and glaring disparities in hardship and opportunity across lines of race and ethnicity. These investments would both help families meet everyday challenges and have long-term payoffs. They would also put in place a policy infrastructure to meet the needs of families and the economy in the next recession or economic crisis.

Today’s uncomfortably high inflation is no excuse to further delay action against long-standing policy shortcomings that, despite progress, still result in high levels of poverty, lack of affordable health coverage for many, and highly unequal access to opportunity. The nation can afford policy advances that address these issues and can finance them responsibly. [56] Nor is inflation an excuse for inaction on solvable problems that shortchange the lives and futures of millions of people and diminish the nation.

Failure to address these serious issues would have long-term negative consequences. When children don’t have economic security — when their families struggle to afford the basics — they are less likely to grow up healthy and succeed in school. Not only does this shortchange their futures, but lack of investing in our children robs the nation as a whole of benefitting from their full potential. A near-term inflation problem is no reason to underinvest in proven strategies that help children thrive.

Some examples of policies that should be enacted are described below.

Helping Parents Make Ends Meet Through the Expanded Child Tax Credit

Policymakers should expand the Child Tax Credit and, most importantly, make it “fully refundable,” meaning that children in families with the lowest incomes would receive the same amount as children in higher-income families, and should deliver payments on a monthly basis. Simply making the current $2,000-per-child credit fully refundable (apart from other benefit expansions) would reduce child poverty in 2022 by about 17 percent, lifting an estimated 1.7 million children above the poverty line.

In addition to making the credit fully refundable, the American Rescue Plan’s one-year expansion of the Child Tax Credit increased the maximum credit amount (to $3,600 for children under age 6 and $3,000 for children aged 6 to 17), allowed families to claim their 17-year-old children for the first time, and delivered half of the credit via advance monthly payments rather than entirely as a lump sum at tax time. [57] These payments — which were delivered to over 61 million children in December 2021 [58] — sharply reduced monthly child poverty and reported food insufficiency, with full refundability almost certainly being the main driver of that poverty reduction. There is no evidence the payments negatively affected parental employment. [59]

The Rescue Plan’s improvements in the Child Tax Credit also reached all five U.S. Territories — Puerto Rico, Guam, U.S. Virgin Islands, American Samoa, and the Northern Mariana Islands — which together are home to nearly 4 million U.S. residents. Not only did the Rescue Plan extend its temporary expansions of the credit to the territories, it also permanently erased long-standing discriminatory barriers that had prevented the bulk of families with children in the territories from accessing the credit. Further improvements to the credit would significantly reduce child poverty in the territories, which is much higher than in the rest of the country.

Helping More Households Afford Housing

Policymakers should make significant new investments to make housing more affordable, including expanding the number of Housing Choice Vouchers to help people with low incomes rent housing of their choice in the private market. As noted, vouchers and other rental assistance only reach 1 in 4 eligible low-income households due to inadequate funding, and there are long waiting lists for assistance around the country. [60]

Studies show that vouchers sharply reduce homelessness, housing instability, and overcrowding. (See Figure 5.) And because stable housing is crucial to many aspects of a family’s life, vouchers have numerous other benefits. Children in families with vouchers are less likely to be placed in foster care, switch schools less frequently, have fewer behavioral problems, and are likelier to exhibit positive social behaviors such as offering to help others. Vouchers also give families greater choice about where they live; when families use vouchers to move to lower-poverty neighborhoods, their children are more likely to attend college and earn more on average as adults. [61] And vouchers provide stable housing for people experiencing homelessness and support seniors and people with disabilities, many of whom face serious housing affordability and access challenges.

The economic fallout from the pandemic caused millions of households to fall behind on rent, putting them at risk of eviction and homelessness, adding to the crisis of homelessness and housing instability that already existed when the pandemic hit. Policymakers took unprecedented measures to keep renters in their homes during the pandemic, including an eviction moratorium put in place by the Centers for Disease Control and Prevention. [62] To help renters with past-due and current rent bills, policymakers also allocated $47 billion of emergency rental assistance. Over 5.7 million households received this assistance between January 2021 and April 2022, which likely played a key role in preventing a surge in evictions after the end of the national eviction moratorium in August 2021. [63] Nationally, the emergency rental assistance program is on pace to exhaust nearly all of its funding by late 2022; [64] this adds to the urgency of addressing the underlying housing instability that made millions of renters vulnerable to losing their homes during the pandemic. Expanding ongoing rental assistance programs to meet significant unmet need is a critical first step, starting with a major expansion of vouchers.

Increasing Health Coverage and Making It More Affordable

Policymakers should deliver on the promise of the ACA by expanding health insurance to millions of uninsured people and improving affordability for millions more. These steps would take further strides toward universal coverage and reduce racial, ethnic, and geographic disparities in coverage. [65]

The ACA cut the nation’s uninsured rate nearly in half, but nearly 30 million people — including millions of working people, parents, people with disabilities, and others — remained uninsured prior to the pandemic. People with low incomes are more likely to be uninsured than those with higher incomes. People of color make up a majority of the uninsured because they face structural barriers such as income and wealth inequities and are disproportionately likely to work in lower-paid jobs, which often don’t come with health benefits. [66]

More than 2 million uninsured people with incomes below the poverty line are in the Medicaid coverage gap because they live in one of 12 states that have failed to adopt the ACA’s Medicaid expansion. People in the coverage gap are adults of varying age, race, and ethnicity; in 2019 some 60 percent were people of color, reflecting long-standing racial and ethnic discrimination. [67] An estimated 445,000 people in rural areas fall into the coverage gap; in fact, the rural uninsured rate in 2019 was nearly twice as high in non- expansion states as in expansion states (21.5 vs. 11.8 percent). [68]

Policymakers should close the coverage gap. They also should extend the Rescue Plan’s premium tax credit improvements, which eliminate or reduce premiums for millions of marketplace enrollees, ensuring that people spend no more than 8.5 percent of their income on premiums and that people with low incomes pay far less. (See Figure 6.) These improvements have already boosted marketplace enrollment.

Improving Unemployment Insurance Benefits and Administration

Policymakers should expand the coverage, duration, and adequacy of unemployment benefits to address the shortcomings of the regular federal-state UI system. Under the regular system, significant gaps in UI coverage exist for workers in low-paid, part-time, or intermittent work, while self-employed contractors, including gig workers, and new labor market entrants are completely shut out. These large holes in UI coverage and benefits disproportionately hurt workers of color.

Equitable coverage and adequate benefits should be a paramount goal for UI. That’s important not just during recessions but also during normal economic times, when millions of workers still lose their jobs through no fault of their own and need assistance as they look for new ones. Federal policymakers ultimately need to enact legislation to comprehensively reform the UI system on a permanent basis.

The pandemic highlighted both the importance of benefit expansions for reducing hardship and the weaknesses of state UI systems for delivering these benefits. Despite the strenuous efforts of many officials to simultaneously address a massive surge in UI claims while quickly starting up new programs, the state-administered UI system was ill prepared to cope with the enormous wave of unemployment of early 2020. Inadequate staffing, outdated technology, and confusion about new eligibility criteria all likely hindered the system’s response. The results were significant delays in processing benefits and higher vulnerability to fraud.

Those difficulties demonstrate the need to modernize and strengthen UI administrative systems. However, efforts to reduce fraud must not erect new barriers to benefits for eligible workers. Increased customer service will likely be needed to help the most vulnerable individuals comply with any new requirements, particularly those related to identity verification. Ultimately, the experience of temporary unemployment programs during the pandemic makes a strong case for permanent federal UI reforms so that states are not forced to rapidly implement major program changes while responding to a deluge of new claims during a recession.

Finally, without federal reform, a weak UI system will become even weaker. After the Great Recession, ten states restricted access to regular unemployment benefits by slashing their duration. In 2022, three more states (Iowa, Kentucky, and Oklahoma) have cut their UI benefit duration significantly, and other states have considered similar reductions. These cuts fall particularly hard on workers of color, since their average duration of unemployment is longer than for white workers.

Strengthening Pre-K and Child Care

Policymakers should increase the accessibility and affordability of high-quality pre-K and child care programs. State-funded pre-K programs enrolled only 34 percent of 4-year-olds and 6 percent of 3-year-olds in 2019-2020. [69] In addition, only 1 in 7 eligible children receive federal child care assistance due to lack of funding. [70] Black children have the least access to high-quality child care, and Black and Latino children face the greatest child care affordability challenges.

Robust research demonstrates the positive long-term results from effective early childhood programs. Randomized control trials of small pre-K programs that tracked children over decades show robust effects on high school graduation rates, college enrollment, and adult earnings. [71] Notable research on programs operating at scale, including Head Start and Boston’s citywide pre-school initiative, has also shown lasting gains for children. [72] Although findings are not uniform, [73] a preponderance of evidence suggests lasting gains for children from quality pre-K programs. [74]

High-quality child care can also yield lasting benefits for families. Increasing the accessibility and affordability of child care has been shown to boost maternal employment. [75] Parents who don’t have access to affordable child care but nevertheless need to work often must rely on lower-quality, unstable child care arrangements that have negative impacts on children’s development and can lead to lost work hours and increased family stress. [76] Several studies document positive long-term educational and developmental impacts of high-quality child care, especially for disadvantaged children. A 20-year longitudinal study, for example, found that attending high-quality child care was consistently associated with higher performance on standardized tests and higher grades. [77]

Quality and design are critical in the context of early childhood programs. [78] To ensure high-quality programs requires, for instance, setting high standards for curriculum and child development; providing adequate pay, training, and opportunities for advancement for staff (who, particularly in the context of child care, are often badly underpaid, resulting in high turnover); using data for quality improvement; and encouraging strong family engagement.

Boosting the Income of Low-Paid Workers

Policymakers should permanently boost the EITC for working adults not raising children. The Rescue Plan temporarily raised both the maximum credit for these workers (from roughly $540 to roughly $1,500) and the income cap for them to qualify (from about $16,000 to at least $22,000). It also temporarily expanded the age range of eligible workers without children to include younger adults aged 19-24 (excluding students under 24 who are attending school at least part time), as well as people aged 65 and over.

This one-year expansion increased the incomes of more than 17 million working adults without children who do important work for low pay. They include nearly 5.8 million people aged 19 to 65 whom the federal tax code would otherwise tax into, or deeper into, poverty — the lone group for whom that happens — in large part because their EITC would otherwise be too low.

Addressing Structural Barriers to Supports and Work for Immigrants

Policymakers should address barriers to economic supports and health coverage for immigrants and their families. For example, they should eliminate the so-called “five-year bar” policy, which blocks many immigrants who have lawful immigration statuses from accessing most federal means-tested programs, including TANF, SNAP, and Medicaid.

The Biden Administration has proposed new “public charge” rules to help address fears that have deterred immigrants and their families from receiving benefits for which they are eligible. To maximize the benefit of these policy improvements, Congress should authorize funding focused on outreach aimed at addressing those fears.

In addition, many immigrants have lived in our nation for most of their lives and have contributed to our communities in many ways yet have no pathway to a lawful immigration status or citizenship. These individuals face barriers to employment and are vulnerable to wage theft and other unfair employment practices. Congress should adopt comprehensive immigration reform to address this crisis.

Creating a National Paid Leave Program

Policymakers should establish a permanent paid family and medical leave program. The United States is alone among wealthy countries in lacking a national paid leave program; instead, we have a patchwork of federal, state, and local policies. Federal law affords a little over half of workers access to unpaid leave but provides no national paid leave. Eleven states and the District of Columbia have paid leave programs at various stages of implementation, but most workers don’t live in those states. And while some employers voluntarily offer paid family and medical leave, the vast majority do not.

Paid leave offers improved economic security for families by making it possible for working people to meet family obligations and stay healthy while keeping their job and receiving a paycheck. In the absence of such paid leave, a worker with a new child or a sick family member, or a worker who becomes sick, often faces only bad choices. They can take unpaid leave and sacrifice income that may be critical for their family’s well-being. Or they can stay at work, forgo providing or being provided care, and risk losing their job anyway due to emergencies or strain. [79] One in five low-paid working mothers report losing a job because of illness or the need to care for a family member. [80] Paid leave also benefits businesses by improving retention and productivity and boosting labor force participation.

A national paid leave program should cover comprehensive reasons for leave, including caring for a new child and for a worker’s serious health condition or that of a family member. It should be generous enough that low- and middle-income workers can meet their families’ needs while on leave. Overall, policy design should ensure that paid leave is fully accessible to all workers. It also should prioritize the needs of low-paid workers, workers of color, and other marginalized groups who are disproportionately ineligible for current leave policies and face more barriers to accessing benefits even when they are eligible.

Strengthening and Better Targeting TANF

Policymakers should reverse the long-term decline in the value of federal TANF funding. They also should set standards to guard against extremely restrictive state eligibility policies that leave many of the families with the greatest needs — including, disproportionately, Black families — with neither employment nor cash assistance. In addition, they should set a minimum benefit level to ensure that all families, regardless of where they live, have access to cash benefits during times of need that will allow them to cover their most basic expenses. States should be required to spend any new federal resources they receive to meet the program’s core purposes: cash assistance, employment assistance, and work supports.

The TANF block grant has not been increased since its inception; as a result, it has lost 40 percent of its value due to inflation, as noted above. That fixed block grant funding and erosion, combined with TANF’s nearly unfettered state flexibility, narrowly defined work requirements, and time limits, have created a system in which very few families in need receive cash assistance or help preparing for success in today’s labor market.

Federal standards should hold states accountable for serving families in need and remove incentives that encourage states not to assist families. For example, states could be required to direct a specified share of federal and state TANF resources to families receiving cash assistance, so that states don’t use TANF’s flexibility to spread program funds throughout their budgets and to shift them away from assistance to families. Federal policymakers should also replace TANF’s work requirements with new approaches to helping families set and achieve personal and family goals that build on evidence-based approaches that recognize individual families’ unique circumstances.

Addressing Food Insecurity Among Children

Policymakers should strengthen proven child nutrition programs to help address a long-standing problem that worsened during the pandemic: many children — disproportionately those who are Black or Latino — face periods of food hardship, which can cause lasting damage to children’s health and learning. [81]

For example, to prevent the usual increase in children’s food hardship in the summer when school is out, policymakers should make summer grocery benefits available nationwide to children who receive free or reduced-price school meals during the school year. [82] They can do so by building on the successful Pandemic EBT (P-EBT) program, [83] created in 2020 to provide grocery benefits to families to replace meals missed while their children were not at school or in child care. Receipt of P-EBT benefits reduced the share of SNAP households where children experienced very low food security by 17 percent and reduced food insufficiency among SNAP households by 28 percent. [84]

Policymakers should also allow more schools that serve many low-income children to offer meals at no charge to all students by expanding the existing Community Eligibility Provision. [85] Community eligibility eliminates the need for schools to collect and process meal applications, raising participation and reducing administrative burdens on schools and families. It also reduces the stigma sometimes associated with free or reduced-price school meals. Community eligibility is linked to a range of positive outcomes for students, including better academic performance, lower suspension rates, and more students with a healthy body mass index. [86]

Improving Skills and Broadening Access to Higher Education

While policymakers should invest in early education and economic security for families with children, which can improve children’s long-term educational outcomes, they should also invest directly in skill building for young people and adults, both through the workforce development system and by making higher education more affordable to students — those attending right out of high school or as adults.

One key step would be to increase Pell Grants, which provide need-based assistance that helps more than 6 million students from low- and middle-income families afford college. In 2021-22, 63 percent of recipients had incomes of $30,000 or less. [87] Numerous studies indicate that increasing financial aid boosts both college attendance and college completion. [88] But Pell Grants have been lagging behind rising college costs: in 2001-02, the maximum grant covered 99 percent of average in-state tuition and fees at four-year public colleges and 42 percent of total college costs, including room and board, but by 2021-22 those percentages had fallen to 60 and 29 percent, respectively. Policymakers should substantially increase Pell Grants so they cover a larger share of the cost of attending college, including students’ living expenses.

Reauthorizing and adequately funding the Workforce Innovation and Opportunity Act (WIOA) programs provide another opportunity for policymakers to advance equity by ensuring that WIOA focuses on preparing individuals facing structural barriers for quality jobs that provide significant room for advancement. Labor Department data indicate that the workforce system, instead of preparing participants for in-demand jobs that pay a living wage, often reinforces occupational segregation by steering participants into jobs with low pay. WIOA reauthorization also provides an opportunity for policymakers to ensure that workforce funding is used to expand programs with a track record of increasing participants’ employment and earnings. These programs include sectoral training programs, which are developed in partnership with employers, and subsidized employment programs, especially for youth newly entering the labor market. Providing more adequate funding for this system is also critical to ensuring that high-quality training opportunities are available.

More on this topic

Failure to close coverage gap would leave millions uninsured and facing worse health outcomes, robust covid relief achieved historic gains against poverty and hardship, bolstered economy, child tax credit has a critical role in helping families maintain economic stability, funding limitations create widespread unmet need for rental assistance.

[1] Unless noted, poverty figures in this report use the Supplemental Poverty Measure (SPM). CBPP analysis of the March Current Population Survey merged with historical SPM data produced by the Columbia Center on Poverty and Social Policy. The poverty threshold is the 2020 SPM poverty threshold, adjusted in prior years for inflation. For methods used, see Danilo Trisi and Matt Saenz, “Economic Security Programs Reduce Overall Poverty, Racial and Ethnic Inequities,” CBPP, updated July 1, 2021, https://www.cbpp.org/research/poverty-and-inequality/economic-security-programs-reduce-overall-poverty-racial-and-ethnic .

Some versions of the SPM use a “relative” poverty threshold that is updated each year for growth in household spending on basic needs and not simply for inflation. Using these relative poverty thresholds would not alter the finding that the 2020 decline in the SPM was the largest in more than 50 years, nor the finding that, when government assistance is not included , 2020 experienced the second largest poverty increase on record, our analysis finds.

[2] 2017 figures here correct for underreporting of Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), and Supplemental Nutrition Assistance Program (SNAP) benefits in the survey data. Figures use an “anchored” Supplemental Poverty Measure with 2019 poverty thresholds adjusted backwards for inflation using the consumer price index. Danilo Trisi and Matt Saenz, “Economic Security Programs Reduce Overall Poverty, Racial and Ethnic Inequities,” CBPP, updated July 1, 2021, www.cbpp.org/research/poverty-and-inequality/economic-security-programs-reduce-overall-poverty-racial-and-ethnic . Throughout this testimony, the effects of government assistance on poverty include any offsetting effects of income and payroll taxes.

[3] In 1970, federal and state income and payroll taxes pushed more children below the poverty line than government assistance lifted above the poverty line, adding 3 percent on balance to the number of children in poverty.

[4] U.S. Census Bureau, “Table F-9. Presence and Number of Related Children Under 18 Years Old--Families by Median and Mean Income,” All Races, https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-income-families.html .

[5] Arloc Sherman, Sharon Parrott, and Danilo Trisi, “Chart Book: The War on Poverty at 50, Section 2,” CBPP, January 6, 2014, https://www.cbpp.org/research/chart-book-the-war-on-poverty-at-50-section-2 .

[6] In 1970, the Latino child poverty rate was actually slightly higher after counting government assistance and taxes (52 percent) than before counting government assistance and taxes because a small share of children lived in families that were taxed into poverty.

[7] The analysis uses Census Bureau estimates of income and payroll taxes, which do not account for restrictions on EITC eligibility for filers who lack a Social Security number for all family members. Accounting for this restrictive policy would increase estimated poverty rates for Latino children in 2017 by perhaps 2 or 3 percentage points and reduce the estimated reductions in poverty shown here by a similar amount.

[8] U.S. Social Security Administration and International Social Security Association, “Country Profiles,” https://ww1.issa.int/country-profiles . “Similarly wealthy nations” are defined, as in Figure 3, as those with mean disposable incomes within 35 percent of U.S. mean income.

[9] Canada’s child poverty rate fell from 17.1 percent in 2015, the year before the policy was implemented, to 11.4 percent in 2017, according to the Organisation for Economic Co-operation and Development. Looking at families rather than children, and adjusting for the improving economy and other trends, one study estimated that the policy lowered the poverty rate for Canadian single mothers by 5 percentage points, from about 40 percent. The researchers also found that the more generous benefit did not lower parents’ employment. Michael Baker et al., “The Effects of Child Tax Benefits on Poverty and Labor Supply: Evidence from the Canada Child Benefit and Universal Child Care Benefit,” National Bureau of Economic Research Working Paper 28556, March 2021, https://www.nber.org/papers/w28556 .

[10] Zachary Parolin et al., “Absence of Monthly Child Tax Credit Leads to 3.7 Million More Children in Poverty in January 2022,” Columbia University Center on Poverty and Social Policy, Vol. 6, No. 2, February 17, 2022, https://static1.squarespace.com/static/610831a16c95260dbd68934a/t/620ec869096c78179c7c4d3c/1645135978087/Monthly-poverty-January-CPSP-2022.pdf .

[11] Like the 2017 poverty figures above, the deep poverty figures here use an “anchored” Supplemental Poverty Measure with 2019 poverty thresholds adjusted backwards for inflation and correct for underreporting of Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), and Supplemental Nutrition Assistance Program (SNAP) benefits in the survey data. For a more detailed discussion of deep poverty trends, see Danilo Trisi and Matt Saenz, “Deep Poverty Among Children Rose in TANF’s First Decade, Then Fell as Other Programs Strengthened,” CBPP, February 27, 2020, https://www.cbpp.org/research/poverty-and-inequality/deep-poverty-among-children-rose-in-tanfs-first-decade-then-fell-as . Note that figures in that report differ slightly from figures presented here since the figures in that report used 2018 poverty thresholds adjusted for inflation.

[12] Arloc Sherman, “Work Requirements for Cash Assistance Fueled Rise in Deep Poverty,” CBPP, November 13, 2018, https://www.cbpp.org/blog/work-requirements-for-cash-assistance-fueled-rise-in-deep-poverty .

[13] Survey of Income and Program Participation data from Arloc Sherman et al., “Widespread Economic Insecurity Pre-Pandemic Shows Need for Strong Recovery Package,” CBPP, July 14, 2021, https://www.cbpp.org/research/poverty-and-inequality/widespread-economic-insecurity-pre-pandemic-shows-need-for-strong .

[14] These cost figures are for December, a month when child care costs may be higher than usual. See: Brian Knop and Abinash Mohanty, “Child Care Costs in the Redesigned Survey of Income and Program Participation: A Comparison to the Current Population Survey Annual Social and Economic Supplement,” U.S. Census Bureau Working Paper No. SEHSD-WP2018-21, July 2018, https://www.census.gov/library/working-papers/2018/demo/SEHSD-WP2018-21.html .

[15] “Child Care and Development Fund (CCDF) Program,” Federal Register, December 24, 2015, https://www.federalregister.gov/documents/2015/12/24/2015-31883/child-care-and-development-fund-ccdf-program .

[16] Chad Stone, “Congress Should Heed President Biden’s Call for Fundamental UI Reform,” CBPP, May 5, 2021, https://www.cbpp.org/research/economy/congress-should-heed-president-bidens-call-for-fundamental-ui-reform .

[17] Nick Gwyn, “State Cuts Continue to Unravel Basic Support for Unemployed Workers,” CBPP, June 27, 2022, https://www.cbpp.org/research/state-budget-and-tax/state-cuts-continue-to-unravel-basic-support-for-unemployed-workers .

[18] Department of Labor, Employment & Training Administration, Recipient Rates, by State, updated July 7, 2022, https://oui.doleta.gov/unemploy/Chartbook/a13.asp .

[19] Department of Labor, Employment & Training Administration, Monthly Program and Financial Data, updated July 7, 2022, https://oui.doleta.gov/unemploy/claimssum.asp .

[20] CBPP, “Policy Basics: Temporary Assistance for Needy Families,” updated March 1, 2022, https://www.cbpp.org/research/family-income-support/temporary-assistance-for-needy-families .

[21] Aditi Shrivastava and Gina Azito Thompson, “TANF Cash Assistance Should Reach Millions More Families to Lessen Hardship,” CBPP, updated February 18, 2022, https://www.cbpp.org/research/family-income-support/tanf-cash-assistance-should-reach-millions-more-families-to-lessen .

[22] Sonya Acosta and Erik Gartland, “Families Wait Years for Housing Vouchers Due to Inadequate Funding,” CBPP, July 22, 2021, https://www.cbpp.org/research/housing/families-wait-years-for-housing-vouchers-due-to-inadequate-funding .

[23] Administration for Children & Families, “ACF Releases Guidance on Supplemental Child Care Funds in the American Rescue Plan,” June 11, 2021, https://www.acf.hhs.gov/media/press/2021/acf-releases-guidance-supplemental-child-care-funds-american-rescue-plan .

[24] Child Care Aware, “Demanding Change: Repairing our Child Care System,” https://www.childcareaware.org/demanding-change-repairing-our-child-care-system/ . See Appendix tables for state-by-state data, https://info.childcareaware.org/hubfs/Demanding%20Change%20Appendices.pdf .

[25] S. Michael Gaddis et al., “Discrimination Against Black and Hispanic Americans is Highest in Hiring and Housing Contexts: A Meta-Analysis of Correspondence Audits,” December 1, 2021, https://ssrn.com/abstract=3975770 .

[26] Margery Austin Turner et al., “Housing Discrimination Against Racial and Ethnic Minorities in 2012,” Department of Housing and Urban Development, June 2013, https://www.huduser.gov/portal/Publications/pdf/HUD-514_HDS2012_execsumm.pdf .

[27] For more information see Michael Leachman et al., “Advancing Racial Equity With State Tax Policy,” CBPP, November 15, 2018, https://www.cbpp.org/research/state-budget-and-tax/advancing-racial-equity-with-state-tax-policy .

[28] LaDonna Pavetti, “TANF Studies Show Work Requirement Proposals for Other Programs Would Harm Millions, Do Little to Increase Work,” CBPP, November 13, 2018, https://www.cbpp.org/research/family-income-support/tanf-studies-show-work-requirement-proposals-for-other-programs ; LaDonna Pavetti, Michelle K. Derr, and Heather Hesketh, “Review of Sanction Policies and Research Studies,” Mathematica Policy Research, March 10, 2003, https://www.mathematica.org/our-publications-and-findings/publications/review-of-sanction-policies-and-research-studies-final-literature-review .

[29] Sanford F. Schram et al., “Deciding to Discipline: Race, Choice, and Punishment on the Frontlines of Welfare Reform,” American Sociological Review , January 2009, https://www.jstor.org/stable/27736070 .

[30] Arloc Sherman et al., “Recovery Proposals Adopt Proven Approaches to Reducing Poverty, Increasing Social Mobility,” CBPP, August 5, 2021, https://www.cbpp.org/research/poverty-and-inequality/recovery-proposals-adopt-proven-approaches-to-reducing-poverty .

[32] Danilo Trisi, “Cash Assistance Boosted Infants’ Brain Development, Study Shows,” CBPP, January 26, 2022, https://www.cbpp.org/blog/cash-assistance-boosted-infants-brain-development-study-shows .

[33] National Academies of Science, Engineering, and Medicine, “A Roadmap to Reducing Child Poverty,” 2019, https://www.nap.edu/catalog/25246/a-roadmap-to-reducing-child-poverty .

[34] Eldar Shafir and Sendhil Mullainathan, Scarcity: Why Having Too Little Means So Much, Picador, 2013, https://behavioralscientist.org/scarcity-excerpt-mullainathan-shafir/ .

[35] William N. Evans and Craig L. Garthwaite, “Giving Mom a Break: The Impact of Higher EITC Payments on Maternal Health,” American Economic Journal, Vol. 6, No. 2, 2014, pp. 258-290.

[36] See Madeline Guth, Rachel Garfield, and Robin Rudowitz, “The Effects of Medicaid Expansion under the ACA: Studies from January 2014 to January 2020,” Kaiser Family Foundation, March 17, 2020, https://www.kff.org/report-section/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review-report/ ; Inna Rubin, Jesse Cross-Call, and Gideon Lukens, “Medicaid Expansion: Frequently Asked Questions,” CBPP, June 16, 2021, https://www.cbpp.org/research/health/medicaid-expansion-frequently-asked-questions .

[37] Erica L. Eliason, “Adoption of Medicaid Expansion Is Associated with Lower Maternal Mortality,” Women’s Health Issues , Vol. 30, No. 3, May 1, 2020, https://www.whijournal.com/article/S1049-3867(20)30005-0/fulltext .

[38] Noam N. Levey, “100 Million People in America Are Saddled With Health Care Debt,” Kaiser Health News, June 16, 2022, https://khn.org/news/article/diagnosis-debt-investigation-100-million-americans-hidden-medical-debt/ .

[39] Katherine Baicker et al., “The Oregon Experiment — Effects of Medicaid on Clinical Outcomes,” New England Journal of Medicine, Vol. 368, May 2, 2013, https://www.nejm.org/doi/pdf/10.1056/NEJMsa1212321 .

[40] See Heidi L. Allen et al., “Can Medicaid Expansion Prevent Housing Evictions?” Health Affairs, Vol. 38, No. 9, 2019, https://www.healthaffairs.org/doi/pdf/10.1377/hlthaff.2018.05071 ; Sarah Miller et al., “The ACA Medicaid Expansion in Michigan and Financial Health,” National Bureau of Economic Research Working Paper 25053, revised March 2020, http://www.nber.org/papers/w25053 ; Kenneth Brevoort, Daniel Grodzicki, and Martin B. Hackmann, “Medicaid and Financial Health,” National Bureau of Economic Research Working Paper 24002, November 2017, https://www.nber.org/papers/w24002 .

[41] Phillip B. Levine and Diane Whitmore Schanzenbach, “The Impact of Children's Public Health Insurance Expansions on Educational Outcomes,” National Bureau of Economic Research Working Paper 14671, January 2009, https://www.nber.org/papers/w14671 ; Andrew Goodman-Bacon, “The Long-Run Effects of Childhood Insurance Coverage: Medicaid Implementation, Adult Health, and Labor Market Outcomes,” National Bureau of Economic Research, December 2016, https://www.nber.org/papers/w22899 .

[42] Kaiser Family Foundation, “Medicaid and CHIP Income Eligibility Limits for Children as a Percent of the Federal Poverty Level,” as of January 1, 2022, https://www.kff.org/health-reform/state-indicator/medicaid-and-chip-income-eligibility-limits-for-children-as-a-percent-of-the-federal-poverty-level/ .

[43] Gideon Lukens and Breanna Sharer, “Closing Medicaid Coverage Gap Would Help Diverse Group and Narrow Racial Disparities,” CBPP, revised June 14, 2021, https://www.cbpp.org/research/health/closing-medicaid-coverage-gap-would-help-diverse-group-and-narrow-racial .

[44] Kaiser Family Foundation, “Status of State Medicaid Expansion Decisions: Interactive Map,” July 21, 2022, https://www.kff.org/medicaid/issue-brief/status-of-state-medicaid-expansion-decisions-interactive-map/ .

[45] Kaiser Family Foundation, “Total Monthly Medicaid/CHIP Enrollment and Pre-ACA Enrollment,” https://www.kff.org/health-reform/state-indicator/total-monthly-medicaid-and-chip-enrollment .

[46] Medicaid and CHIP enrollment increased to 88 million in March 2022, largely due to a provision in COVID relief legislation requiring states to maintain continuous coverage for Medicaid enrollees for the duration of the public health emergency in order to access an enhanced federal match rate.

[47] Centers for Medicare & Medicaid Services, “2022 Marketplace Open Enrollment Period Public Use Files,” https://www.cms.gov/research-statistics-data-systems/marketplace-products/2022-marketplace-open-enrollment-period-public-use-files .

[48] Kaiser Family Foundation, “Marketplace Effectuated Enrollment and Financial Assistance,” https://www.kff.org/other/state-indicator/effectuated-marketplace-enrollment-and-financial-assistance .

[49] Figure is from the 2019 American Community Survey. Katherine Keisler-Starkey and Lisa N. Bunch, “Health Insurance Coverage in the United States: 2019,” U.S. Census Bureau, September 2020, https://www.census.gov/content/dam/Census/library/publications/2020/demo/p60-271.pdf .

[50] Figures account for all public benefits (including permanent programs such as Social Security, food assistance, rental vouchers, regular state unemployment insurance, and the Earned Income Tax Credit, as well as pandemic programs such as Economic Impact Payments and supplemental unemployment benefits and food assistance), as well as federal and state income taxes and payroll taxes. The decrease in the percentage of people in poverty (from 12.2 percent to 9.1 percent) was also the largest on record.

The Census Bureau counts the second Economic Impact Payment, enacted December 27, 2020, as part of families’ 2020 income, although Treasury data suggest that families received most if not all of the funds early in 2021. Even if Census had counted this income in 2021 rather than 2020, however, the SPM poverty rate would still have declined in 2020 by the largest amount since 1968 and reached its lowest level since 1967, we estimate.

[51] CBPP analysis of the March 2020 and 2021 Current Population Survey. Figures are based on income before benefits and taxes. The increase in the percentage of people in poverty before counting government assistance and taxes (from 22.8 percent in 2019 to 25.3 percent in 2020) was also the second largest on record, with data back to 1967.

[52] Zachary Parolin et al., “Absence of Monthly Child Tax Credit Leads to 3.7 Million More Children in Poverty in January 2022,” Columbia University Center on Poverty and Social Policy, Vol. 6, No. 2, February 17, 2022, https://static1.squarespace.com/static/610831a16c95260dbd68934a/t/620ec869096c78179c7c4d3c/1645135978087/Monthly-poverty-January-CPSP-2022.pdf ; Zachary Parolin et al., “The Potential Poverty Reduction Effect of the American Rescue Plan,” Columbia University Center on Poverty and Social Policy, March 11, 2021, https://static1.squarespace.com/static/610831a16c95260dbd68934a/t/6113eddb3cde100cb68904ee/1628696027691/Poverty-Reduction-Analysis-American-Rescue-Plan-CPSP-2021.pdf . An analysis by the Urban Institute found an even larger reduction in 2021 poverty from the Rescue Plan. Laura Wheaton et al. , “2021 Poverty Projections: Assessing Four American Rescue Plan Policies,” Urban Institute, March 11, 2021, https://www.urban.org/research/publication/2021-poverty-projections-assessing-four-american-rescue-plan-policies .

[53] Patrick Cooney, H. Luke Shaefer, and Samiul Jubaed, “Material Hardship and Well-Being of U.S. Households at the End of 2021,” University of Michigan Poverty Solutions, March 2022, http://sites.fordschool.umich.edu/poverty2021/files/2022/03/PovertySolutions-Material-Hardship-2021-March2022.pdf .

[54] Laura Wheaton, Linda Giannarelli, and Ilham Dehry, “2021 Poverty Projections: Assessing the Impact of Benefits and Stimulus Measures,” Urban Institute, July 2021, https://www.urban.org/sites/default/files/publication/104603/2021-poverty-projections_0_0.pdf ; Laura Wheaton et al., “2021 Poverty Projections: Assessing Four American Rescue Plan Policies,” Urban Institute: March 2021, https://www.urban.org/sites/default/files/publication/103794/2021-poverty-projections-assessing-four-american-rescue-plan-policies_0_0.pdf .

[55] H. Luke Shaefer, Testimony Before the Select Subcommittee on the Coronavirus Crisis Hearing on the Impact of Pandemic Response, September 22, 2021, https://docs.house.gov/meetings/VC/VC00/20210922/114055/HHRG-117-VC00-Wstate-ShaeferH-20210922.pdf .

[56] Chuck Marr, “ProPublica Shows How Little the Wealthiest Pay in Taxes: Policymakers Should Respond Accordingly,” CBPP, July 15, 2021, https://www.cbpp.org/research/federal-tax/propublica-shows-how-little-the-wealthiest-pay-in-taxes-policymakers-should .

[57] These larger credit amounts start to phase down to $2,000 per child for families with incomes above $112,500 for a head of household and $150,000 for a married couple. The $2,000 credit starts to phase down for families with incomes above $200,000 for a head of household and $400,000 for a married couple.

[58] Department of the Treasury, “By State: Advance Child Tax Credit Payments Distributed in December 2021,” December 15, 2021, https://home.treasury.gov/system/files/131/Advance-CTC-Payments-Disbursed-December-2021-by-State-12152021.pdf .

[59] Megan A. Curran, “Research Roundup of the Expanded Child Tax Credit: The First 6 Months,” Columbia University Center on Poverty and Social Policy, Vol. 5. No. 5, December 22, 2021, https://static1.squarespace.com/static/610831a16c95260dbd68934a/t/61f946b1cb0bb75fd2ca03ad/1643726515657/Child-Tax-Credit-Research-Roundup-CPSP-2021.pdf .

[60] CBPP, “Chart Book: Funding Limitations Create Widespread Unmet Need for Rental Assistance,” February 15, 2022, https://www.cbpp.org/research/housing/funding-limitations-create-widespread-unmet-need-for-rental-assistance .

[61] Will Fischer, Douglas Rice, and Alicia Mazzara, “Research Shows Rental Assistance Reduces Hardship and Provides Platform to Expand Opportunity for Low-Income Families,” CBPP, December 5, 2019, https://www.cbpp.org/research/housing/research-shows-rental-assistance-reduces-hardship-and-provides-platform-to-expand .

[62] Erik Gartland, “Relief Measures Reduced Hardship for Renters During Pandemic, but Many Still Struggle to Pay Rent in Every State,” June 17, 2022, https://www.cbpp.org/research/housing/relief-measures-reduced-hardship-for-renters-during-pandemic-but-many-still#scene-0

[63] U.S. Department of the Treasury, “Emergency Rental Assistance Program,” https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/emergency-rental-assistance-program .

[64] U.S. Department of the Treasury, “Treasury Announces $30 Billion in Emergency Rental Assistance Spent or Obligated with Over 4.7 Million Payments Made to Households Through February 2022,” March 30, 2022, https://home.treasury.gov/news/press-releases/jy0688 .

[65] Judith Solomon and Tara Straw, “Build Back Better Increases Health Coverage and Makes It More Affordable,” CBPP, October 29, 2021, https://www.cbpp.org/research/health/build-back-better-increases-health-coverage-and-makes-it-more-affordable .

[66] Kaiser Family Foundation, “Employer-Sponsored Coverage Rates for the Nonelderly by Race/Ethnicity,” data for 2019, https://www.kff.org/other/state-indicator/nonelderly-employer-coverage-rate-by-raceethnicity/ .

[67] Gideon Lukens and Breanna Sharer, “Closing the Medicaid Coverage Gap Would Help a Diverse Group and Narrow Racial Disparities,” CBPP, revised June 14, 2021, https://www.cbpp.org/research/health/closing-medicaid-coverage-gap-would-help-diverse-group-and-narrow-racial .

[68] Gina Turrini et al., “Access to Affordable Care in Rural America: Current Trends and Key Challenges,” Assistant Secretary for Planning and Evaluation, Department of Health and Human Services, July 9, 2021, https://aspe.hhs.gov/sites/default/files/2021-07/rural-health-rr.pdf . The estimate includes Missouri as a coverage gap state; the state has since expanded.

[69] Allison H. Friedman-Krauss et al., “The State of Preschool 2020,” National Institute for Early Education Research, 2021, https://nieer.org/wp-content/uploads/2021/08/YB2020_Executive_Summary_080521.pdf .

[70] Administration for Children & Families, “ACF Releases Guidance on Supplemental Child Care Funds in the American Rescue Plan,” June 11, 2021, https://www.acf.hhs.gov/media/press/2021/acf-releases-guidance-supplemental-child-care-funds-american-rescue-plan .

[71] HighScope Educational Research Foundation, “Perry Preschool Project – Study Results,” https://highscope.org/perry-preschool-project/ ; Francis A. Campbell et al., “Adult Outcomes as a Function of an Early Childhood Educational Program: An Abecedarian Project Follow-Up,” Developmental Psychology, Vol. 48, No. 4, January 16, 2012, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3989926/ ; Jorge Luis García et al., “The Dynamic Benefits of Early Childhood Education,” National Bureau of Economic Research Working Paper 29004, July 2021, https://www.nber.org/system/files/working_papers/w29004/w29004.pdf?utm_campaign=Economic%20Studies&utm_source=hs_email&utm_medium=email .

[72] See, for example, Guthrie Gray-Lobe, Parag Pathak, and Christopher Walters, “The Long-Term Effects of Universal Preschool in Boston,” School Effectiveness & Inequality Initiative, May 2021, https://blueprintlabs.mit.edu/research/the-long-term-effects-of-universal-preschool-in-boston/ ; and Cortney Sanders, “Research Note: Combining Early Education and K-12 Investments Has Powerful Positive Effects,” CBPP, February 28, 2019, https://www.cbpp.org/research/state-budget-and-tax/research-note-combining-early-education-and-k-12-investments-has . See also Rucker C. Johnson and C. Kirabo Jackson, “Reducing Inequality Through Dynamic Complementarity: Evidence from Head Start and Public School Spending,” National Bureau of Economic Research Working Paper 23489, June 2017, https://www.nber.org/papers/w23489 .

[73] Kelley Durkin et al., “Effects of a Statewide Pre-Kindergarten Program on Children’s Achievement and Behavior Through Sixth Grade,” Developmental Psychology, January 10, 2022, https://cdn.vox-cdn.com/uploads/chorus_asset/file/23196839/Effects_of_a_Statewide_Pre_Kindergarten_Program_on_Children_s_Achievement_and_Behavior_Through_Sixth_Grade.pdf .

[74] Dana Charles McCoy et al., “Impacts of Early Childhood Education on Medium- and Long-Term Educational Outcomes,” Educational Researcher, Vol. 46, No. 8, November 2017, https://journals.sagepub.com/doi/10.3102/0013189X17737739 .

[75] Taryn W. Morrissey, “Child care and parent labor force participation: a review of the research literature,” Review of Economics of the Household, Vol. 15, No. 1, 2017, https://link.springer.com/article/10.1007/s11150-016-9331-3 ; see also Maria E. Enchautegui, “Effects of the CCDF Subsidy Program on the Employment Outcomes of Low Income Mothers,” U.S. Department of Health and Human Services, December 2016, https://aspe.hhs.gov/effects-child-care-subsidies-maternal-labor-force-participation-united-states .

[76] Robert Paul Hartley et al., “A Lifetime’s Worth of Benefits: The Effects of Affordable, High-quality Child Care on Family Income, the Gender Earnings Gap, and Women’s Retirement Security,” National Women’s Law Center and Columbia Center on Poverty & Social Policy, March 2021, https://nwlc.org/wp-content/uploads/2021/04/A-Lifetimes-Worth-of-Benefits-_FD.pdf ; Gina Adams and Monica Rohacek, “Child Care Instability,” Urban Institute, October 2010, https://www.urban.org/sites/default/files/publication/29446/412278-Child-Care-Instability-Definitions-Context-and-Policy-Implications.PDF . See also Alejandra Ros Pilarz and Heather D. Hill, “Child-Care Instability and Behavior Problems: Does Parenting Stress Mediate the Relationship?” Journal of Marriage and Family, Vol. 79, No. 5, October 2017, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5666338/ .

[77] Christina Felfe and Rafael Lalive, “Does early child care affect children’s development?” Journal of Public Economics, Vol. 159, March 2018, https://www.sciencedirect.com/science/article/pii/S0047272718300148 ; Grace E. Noboa-Hidalgo and Sergio S. Urzúa, “The Effects of Participation in Public Child Care Centers: Evidence from Chile,” Journal of Human Capital, Vol. 6, No. 1, 2012, https://www.journals.uchicago.edu/doi/abs/10.1086/664790 ; Deborah Low Vandell and Margaret Burchinal, “Early child care and adolescent functioning at the end of high school: Results from the NICHD Study of Early Child Care and Youth Development,” Developmental Psychology, Vol. 52, No. 10, October 2016, https://www.researchgate.net/publication/308878544_Early_child_care_and_adolescent_functioning_at_the_end_of_high_school_Results_from_the_NICHD_Study_of_Early_Child_Care_and_Youth_Development .

[78] Programs with lower levels of quality have shown weaker results. For example, for discussion of Quebec’s child care program, see Michael Baker et al., “The Long-Run Impacts of a Universal Child Care Program,” American Economic Journal: Economic Policy, Vol. 11, No. 3, 2019, https://www.aeaweb.org/articles?id=10.1257/pol.20170603 ; Margherita Fort, Andrea Ichino, and Giulio Zanella, “The cognitive cost of daycare 0-2 for children in advantaged families,” February 8, 2017, https://www.researchconnections.org/childcare/resources/35529 ; CCPA National Office, “You must be kidding: Confronting key myths about Quebec’s childcare system,” Monitor, April 25, 2017, https://monitormag.ca/articles/you-must-be-kidding-confronting-key-myths-about-quebecs-childcare-system . See also Conor Williams, “When ‘Universal’ Child Care Isn’t Universally High-Quality,” Atlantic, May 1, 2018, https://www.theatlantic.com/family/archive/2018/05/quebec-child-care-family-leave/559310/ .

[79] Pronita Gupta, “Paid Family and Medical Leave: Helping Workers and Employers Succeed,” testimony before the U.S. House of Representatives Committee on Ways and Means, May 8, 2019, https://www.clasp.org/sites/default/files/publications/2019/05/2019%2005%2008%20Pronita%20Gupta%20PFML%20testimony%20.pdf .

[80] Ibid .

[81] Zoë Neuberger, “Nutrition Provisions in New House Build Back Better Legislation Could Substantially Reduce Children’s Food Hardship,” CBPP, November 5, 2021, https://www.cbpp.org/research/food-assistance/nutrition-provisions-in-new-house-build-back-better-legislation-could .

[82] Katie Bergh, “States Have an Important Opportunity to Address Childhood Hunger This Summer,” CBPP, May 24, 2021, https://www.cbpp.org/research/food-assistance/states-have-an-important-opportunity-to-address-childhood-hunger-this .

[83] CBPP, “CBPP/FRAC P-EBT Documentation Project Shows How States Implemented a New Program to Provide Food Benefits to Up to 30 Million Low-Income School Children,” www.cbpp.org/pebt ; Elaine Waxman et al., “Documenting Pandemic EBT for the 2020-21 School Year,” October 26, 2021, https://www.urban.org/research/publication/documenting-pandemic-ebt-2020-21-school-year .

[84] Lauren Bauer et al ., “An Update on the Effect of Pandemic EBT on Measures of Food Hardship,” Brookings Institution Hamilton Project, September 29, 2021, https://www.brookings.edu/research/an-update-on-the-effect-of-pandemic-ebt-on-measures-of-food-hardship . Households were considered to have very low food security among children if they reported that the children sometimes or often did not eat enough in the last seven days because the household could not afford food. Households that experienced food insufficiency reported that they were sometimes or often not able to get enough to eat in the previous seven days.

[85] Zoë Neuberger, “By Acting Now, Policymakers Can Connect More Low-Income Children With School Meals,” CBPP, September 2, 2021, https://www.cbpp.org/blog/by-acting-now-policymakers-can-connect-more-low-income-children-with-school-meals .

[86] Sherman et al. , “Recovery Proposals Adopt Proven Approaches to Reducing Poverty, Increasing Social Mobility,” op. cit.; Amelie A. Hecht, Keshia M. Pollack Porter, and Lindsey Turner, “Impact of the Community Eligibility Provision of the Healthy, Hunger-Free Kids Act on Student Nutrition, Behavior, and Academic Outcomes: 2011–2019,” American Journal of Public Health , Vol. 110, No. 9, September 2020, https://ajph.aphapublications.org/doi/full/10.2105/AJPH.2020.305743 .

[87] U.S. Department of Education, Fiscal Year 2023 Budget Request for Student Financial Assistance, page 19, https://www2.ed.gov/about/overview/budget/budget23/justifications/o-sfa.pdf .

[88] See Sherman et al., “Recovery Proposals Adopt Proven Approaches to Reducing Poverty, Increasing Social Mobility,” op. cit.

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Poverty, Racism, and the Public Health Crisis in America

Bettina m. beech.

1 Department of Health Systems and Population Health Science, University of Houston College of Medicine, Houston, TX, United States

Chandra Ford

2 Department of Community Health Sciences, Center for the Study of Racism, Social Justice and Health at the University of California, Los Angeles, Los Angeles, CA, United States

Roland J. Thorpe, Jr.

3 Department of Health, Behavior, and Society, Program for Research on Men's Health, Hopkins Center for Health Disparities Solutions, Johns Hopkins Alzheimer's Disease Resource Center for Minority Aging Research, Johns Hopkins Bloomberg School of Public Health, Baltimore, MD, United States

Marino A. Bruce

4 Program for Research on Faith, Justice, and Health, Department of Behavioral and Social Sciences, University of Houston College of Medicine, Houston, TX, United States

Keith C. Norris

5 Department of Medicine, Division of General Internal Medicine and Health Services Research, David Geffen School of Medicine, University of California, Los Angeles, Los Angeles, CA, United States

Associated Data

The original contributions presented in the study are included in the article/supplementary material, further inquiries can be directed to the corresponding author.

The purpose of this article is to discuss poverty as a multidimensional factor influencing health. We will also explicate how racism contributes to and perpetuates the economic and financial inequality that diminishes prospects for population health improvement among marginalized racial and ethnic groups. Poverty is one of the most significant challenges for our society in this millennium. Over 40% of the world lives in poverty. The U.S. has one of the highest rates of poverty in the developed world, despite its collective wealth, and the burden falls disproportionately on communities of color. A common narrative for the relatively high prevalence of poverty among marginalized minority communities is predicated on racist notions of racial inferiority and frequent denial of the structural forms of racism and classism that have contributed to public health crises in the United States and across the globe. Importantly, poverty is much more than just a low-income household. It reflects economic well-being, the ability to negotiate society relative to education of an individual, socioeconomic or health status, as well as social exclusion based on institutional policies, practices, and behaviors. Until structural racism and economic injustice can be resolved, the use of evidence-based prevention and early intervention initiatives to mitigate untoward effects of socioeconomic deprivation in communities of color such as the use of social media/culturally concordant health education, social support, such as social networks, primary intervention strategies, and more will be critical to address the persistent racial/ethnic disparities in chronic diseases.

I used to think I was poor, then they told me I wasn't poor, I was needy. Then they told me it was self-defeating to think of myself as needy, I was deprived. Then they told me underprivileged was overused, that I was disadvantaged. I still don't have a dime, but I have a great vocabulary—From a Jules Feiffer cartoon, 1965 .

Poverty is one of the most significant, yet understudied social conditions of the 21st century ( 1 ). This social condition can be defined in a number of ways; however, it can be summarized as the lack of resources necessary to meet basic human needs. Prosperity has been a primary focus in recent years with the rise in overall global wealth ( 2 ). But, the growth in economic and financial resources has not been equally distributed. The gap in resources between the affluent and the poor has been steadily increasing and global extreme poverty (individual income < United States [U.S.] $1.90/day) increased in 2020, the first time in over two decades to 9.2%, after falling to a low of 8% in 2019 ( 3 ). Over 40% of the world lived on less than the U.S. $5.50 a day in 2017 with most of the extreme poverty concentrated in Africa ( 3 ). The prevalence of extreme poverty in the U.S. is very low by global standards ( 3 ). However, the U.S. has one of the highest rates of poverty in the developed world and the worst index of health and social problems as a function of income inequality ( 4 ). For each additional household member, the level increases by $4,480 a year. The level of relative poverty in the U.S. is determined by the federal poverty level (FPL), and for a single-person household, the 2020 poverty level was $12,760 a year, or just under $35 a day. The prevalence of communities being below the FPL varies by race and ethnicity with 24.2% American Indian/Alaskan Native, 21.2% of Black, 17.2% of Hispanic, 9.7% of Asian/Pacific Islander/Native Hawaiian, and 9% of White American families falling below 100% of the FPL ( 5 ). Furthermore, the inequities in wealth are even greater than income differences across racial and ethnic groups.

Black families in the U.S. have about one-twentieth the wealth of their White peers on average ( 6 ). For every dollar of wealth in White families, the corresponding wealth in Black households is five cents. Wealth inequality is not a function of work ethic or work hour difference between groups. Rather, the widening gap between the affluent and the poor can be linked to unjust policies and practices that favor the wealthy ( 2 , 7 – 9 ). The impact of this form of inequality on health has come into sharp focus during the COVID-19 pandemic as the economically disadvantaged were more likely to get infected with SARS CoV-2 and die ( 10 ).

For many health providers, the link between poverty and health among health care providers has been primarily grounded in access to health care with several downstream effects of poverty that may include poor nutrition and substandard housing. This understanding is often influenced and perhaps confounded by the correlation between race and poverty, or racism and classism ( 11 ). A common narrative for the relatively high prevalence of poverty in marginalized minority communities is predicated on notions about them having poor work ethics and poor innate inabilities to achieve wealth. An over-reliance on the myth of meritocracy and a failure to understand root causes of poverty operating at community and individual levels can exacerbate poor patient-provider relations and perpetuate suboptimal patient outcomes among marginalized minority groups. Racial and economic marginalization has contributed to public and population health crises in the United States (U.S.) and across the globe ( 12 , 13 ). However, poverty is much more than just a low household income. Poverty has been characterized in the following three ways: (1) economic well-being, commonly linked to income; (2) ability to navigate society as a function of an education or health status of the individual; and/or (3) social exclusion as a result of institutional behaviors, practices, and policies ( 1 , 14 ). The purpose of this article is to discuss poverty as a multidimensional factor influencing health and explicate how racism contributes to and perpetuates the economic and financial inequality that diminishes prospects for population health improvement among marginalized racial and ethnic groups. We believe this discussion will help to inform a realistic way forward in the pursuit of health equity.

Poverty and Health Disparities, A Historical Perspective

In the mid-1800's, Dr. James McCune Smith was the leading voice in the medical profession to argue that the health of the person was not primarily a consequence of their innate constitution, but instead reflected their intrinsic membership in groups created by a race structured society ( 15 – 17 ). This articulation of health disparities being linked to the racial caste system of America and inequitable social conditions is one of the earliest written descriptions of racism as the cause of health inequities and ultimately health disparities by a member of the American healthcare community. His arguments were scientifically validated when Dr. William Edward Burghardt Dubois reported his findings in 1899 from the first sociological study of Blacks in America, The Philadelphia Negro, demonstrating that racial differences in mortality in Philadelphia were explained by social factors (e.g., economic, sanitary, and education) and not innate racial traits or tendencies ( 18 ). Dr. Dubois documented how white supremacy policies, actions, and beliefs leading to discrimination, oppression, and more contributed to structural poverty and increased levels of despair, disease, and death ( 19 ). Thus, Drs. James and Dubois are considered by many to be the true pioneers who laid the foundation for future work clarifying racism rather than race as the cause of health disparities ( 20 , 21 ).

Explicit notions of Black biological, intellectual, and moral inferiority often categorized as scientific racism have gradually moved from the mainstream to the margins over the last century as social movements advocated for the full citizenship of Black Americans. Despite the passing of civil rights legislation in the U.S. prohibiting discrimination in public arenas and civic engagement (e.g., Civil Rights Bill of 1866, Civil Rights Act of 1964, Voting Rights Act of 1965, and Civil Rights Act of 1968), structural racism, discrimination, and other harmful forms of bias continue to persist today ( 22 – 24 ). Many factors, such as explicit and implicit provider biases, medical and institutional mistrust (due to historic and contemporary mistreatment), and low self-esteem and stereotype threat, from internalized racism continue to impact our nation and further contribute to the genesis and perpetuation of health disparities ( 25 ). This was reified in the 1985 Report of the Secretary of the U.S. Department of Health and Human Services (U.S. DHHS) Task Force on Black and Minority Health, known as the Heckler Report, the first government-sanctioned assessment of racial health disparities ( 26 ), followed nearly two decades thereafter by the Institute of Medicine (IOM) Report on Unequal Treatment ( 25 ). The Heckler Report noted mortality inequity was linked to six leading causes of preventable excess deaths for the Black compared to the White population (cancer, cardiovascular disease, diabetes, infant mortality, chemical dependency, and homicide/unintentional injury) ( 26 ). The IOM Report focused on health care disparities and highlighted the role interpersonal racism can have on health outcomes for members of minoritized groups ( 25 ). These reports and others ( 9 , 27 – 35 ) have led to a more robust focus on population health over the last few decades that has included a renewed interest in the impact of racism and social factors, such as poverty on clinical outcomes ( 1 , 33 ).

Poverty and the MYTH of Meritocracy

The race is an antecedent and major determinant of socioeconomic status (SES) in the U.S.; therefore, it is not surprising that the successful implementation of discriminatory race-based policies premised on racial inferiority would produce racial disparities in SES. The term structural racism is used to capture the ways in which inequities are perpetuated through the racialized differential access to resources, opportunities, and services that are codified in laws, policies, practices, and societal norms ( 23 , 32 , 33 , 36 – 40 ). This system harms marginalized populations at the expense of affording greater resources, opportunities, and other privileges to the dominant White society ( 23 , 32 , 33 , 36 – 40 ). Importantly, a single identifiable perpetrator is not visible making its denial easy and its identification and dissolution challenging ( 41 ).

However, the role of structural racism in creating and sustaining poverty is rarely discussed in scholarly and public circles despite the publishing of seminal works, such as Caste, Class and Race, Black Metropolis , and An American Dilemma during the mid-20th century ( 42 – 44 ). These groundbreaking books laid the foundation for several sociological studies documenting key structurally racist policies and practices (i.e., residential segregation) that created communities comprised of racial and ethnic minorities that are beset with poverty and related factors, including high unemployment, poor schools, substandard housing, and limited social mobility ( 45 – 47 ). Most White Americans were not exposed to this scholarship nor the overwhelming financial and economic disadvantages faced by African Americans and other marginalized groups. As such, public discourse has been largely shaped by a narrative of meritocracy which is laced with ideals of opportunity without any consideration of the realities of racism and race-based inequities in structures and systems that have locked individuals, families, and communities into poverty-stricken lives for generations. Pervasive public policies spanning from slavery to voter suppression have and continue to severely limit opportunities for social mobility among marginalized groups, thereby perpetuating and hardening vast inequities in power, status, and resources that define our racial caste system and structure ( 9 , 34 , 48 – 50 ).

The narrative of meritocracy has also been extended to immigrants, but it is framed through a narrative of European immigrants who work hard and become successful. However, immigrants from Mexico, Central and South America, in particular as well as many refugees from poor Asian and African countries are also exposed to laws and policies that create and perpetuate a life confronting persistent inequality and perceptions of inferiority.

These practices of race-based, community-level disinvestment in each of the domains of the social determinants coupled with a lack of a national health program condemn oppressed populations such as Black and Hispanic Americans, American Indians, and disproportionately non-English speaking immigrants and refugees to remain in poverty and suffer from suboptimal health. Thus, poverty represents a critical public health condition that is both determined by and perpetuated by structural racism.

Conceptual Framework of Poverty and Health

Socioeconomically disadvantaged populations across the globe bear a disproportionate burden of chronic diseases and are least likely to receive evidence-based care leading to optimal clinical outcomes ( 51 , 52 ). A basic understanding of the vulnerabilities of the marginalized and oppressed populations will facilitate the adaptation and adoption of the necessary policies to support disease treatment and prevention guidelines ( 52 ). The WHO has identified three key tenets to improving health at a global level that each reinforces the impact of socioeconomic factors: (1) improve the conditions of daily life; (2) tackle the inequitable distribution of power, money, and resources, the structural drivers of those conditions of daily life, globally, nationally, and locally; and (3) develop a workforce trained in the social determinants of health and raise public awareness about social needs and the social determinants of health ( 53 ). Social factors and health behaviors have contributed substantially to the growing non-communicable disease epidemics (e.g., obesity, diabetes, hypertension, and mental health disorders). A deeper understanding and integration of social and behavioral sciences is needed to equip medical and public health communities to address the challenge of providing quality care in the setting of contrasting financial and public health policies to control costs ( 54 ). A conceptual framework emphasizing the key pathways through which poverty and structural racism may influence wellness and health outcomes is shown in Figure 1 .

A conceptual framework emphasizing the key pathways through which poverty and structural racism may influence wellness and health outcomes [adapted from Wen et al. ( 55 )].

Perniciousness of Persistent Poverty

The Social Determinants of Health (SDoH) are macro-level factors that shape the economic, physical, psychological, and social environments in which people live ( 56 ). They are often viewed as having the capacity to enhance or diminish the resources available to individuals to promote health, including but not limited to the food supply, housing, economic and social relationships, transportation, employment, criminal justice, education, and health care, whose distribution across populations effectively determines length and quality of life and the programs and policies that direct them ( 23 ). The World Health Organization Commission on Social Determinants of Health has found that the poor health status of low resource persons, communities, and nations is directly related to the unequal distribution of power, income, goods, and services ( 53 ). Social structures and institutions with unequal and unfair social policies, economic arrangements, and practices have contributed to much of the health inequity present in the world. A brief overview of select medical conditions follows.

Communicable diseases: Poverty can contribute to many communicable diseases including many acute and chronic infectious diseases. Poverty and the associated disadvantage of personal and social resources often lead to unsafe habitation and lack of cleanliness, unhealthy diets, and malnutrition (including maternal-fetal), poor water quality, increased exposure to infectious diseases, environmental pollution and toxins, and more ( 57 ). The rates of infectious disease morbidity and mortality in low resource households, communities, and nations over decades bear witness to the considerable impact of economic inequality on health ( 53 ).

Maternal and child health: Poverty has been strongly linked with poor reproductive outcomes, both independently and in combination with exposure to discrimination ( 58 – 61 ). Maternal and child health among low-income and racial/ethnic minority groups are particularly susceptible to psychological stress, nutrition, substance use, and more ( 58 , 62 , 63 ).

Incarcerated youth: Globally and in the US, incarceration rates are higher among poor and marginalized groups ( 64 ). For children within the criminal justice system or otherwise deprived of liberty are at particularly high risk of violence, rape and sexual assault, sexually transmitted diseases, substance use disorders, mental illnesses, and physical disorders, many of which will continue throughout the life course ( 65 , 66 ). Furthermore, adult incarceration can create health deficits in familial youth ( 64 ).

Chronic non-communicable diseases: Similar patterns of disparities negatively are observed in the incidence and prevalence of chronic diseases, such as cardiovascular disease, diabetes, kidney disease, and others ( 67 – 70 ). Poverty can also have indirect implications for health ( 5 , 71 ). Race-based economic disadvantages can influence other social determinants as the intersection with poverty can further limit housing, educational, and employment opportunities, and these have also been linked to worse health outcomes ( 58 , 72 – 74 ). Poverty can also influence individual perceptions and behaviors ( 75 ). Relative and absolute economic deprivation can shape expectations and perceived life chances in a manner that individuals focus on surviving rather than thriving.

Mental health: In addition to the more traditional mental health conditions that may limit daily functioning, the additional chronic stress associated with navigating basic needs in a state of poverty can impair cognitive processing and the ability to remember and to perform implementation tasks ( 76 ), along with mistrust which may impact the ability of the individual to follow up on medical appointments, provider recommendations and more to conspire to limit health outcomes ( 77 ).

In summary, the impact of poverty on both the physical and psychological aspects of a person can play an important role in the many dimensions associated with the development and progression of diseases. The socioeconomic status of the individual may considerably impact the perception of the individual of many life issues, such as food, education, language, and time ( 75 ). While these concepts may be apparent and easily recognizable in other social disciplines, their presence and implications may be lost or concealed to many health care providers. Therefore, an understanding of how poverty may influence worldviews is critical for health professionals to truly understand the diverse group of patients they care for and how to better connect with those in an impoverished situation to optimize the effectiveness of traditional and alternative health strategies and recommendations. Table 1 highlights the influence of socioeconomic class including income on the context of patient-specific needs, values, and preferences, as well as considerations as to how racism may be operating in that setting.

Socioeconomic class and values of key determinants of health [adapted from Payne and Blair ( 75 )].

Poverty, Refugee, and Migration

As a large nation founded by immigrants, the United States inevitably and receives a large number of refugees, documented, and undocumented immigrants seeking a better life. The national narrative is that immigrants will find employment, gain some measure of socioeconomic equity and become eligible for health insurance. Unfortunately, this ideal only holds true for a subset of preferred immigrants largely from wealthy European countries. Individuals from formerly colonized nations in Central or South America, Asia, or Africa who come to the United States are often beset with persistent marginalization, poverty, and poor health ( 78 , 79 ). Furthermore, the likelihood that groups will be placed in such a situation is grounded in racial and ethnic discrimination as well as religious discrimination ( 11 ). Many immigrants with limited resources experience a combination of stressors, including discrimination, isolation, uncertainty, and mental health disorders from posttraumatic stress symptoms, depression, anxiety alcohol, and substance use to posttraumatic stress symptoms ( 80 , 81 ). In addition to researchers, providers have acknowledged the importance of poverty, discrimination, and other structural barriers on the lived experiences of immigrant clients and how it may impact their health ( 80 ).

What Might be the Way Forward?

An aphorism commonly attributed to the former Center for Medicare and Medicaid Services (CMS) director Don Berwick is “Every system is perfectly designed to achieve the results it gets.” Our society has been outstanding in perpetuating the conditions that lead to and maintain poverty for a disproportionately high percentage of people of color. Unlike many narratives about poverty and the innate values of people of color, no one wakes up wanting to be poor or sick. Similar to most other major institutions, the health profession has chosen to work around the margins of poverty and to study and practice what is the best way to treat patients with limited resources, limited social support, and multiple exposures that develop or worsen the disease. While the stature of the health profession has given it an immense level of privilege and power that could be used to achieve different results in a nation with immense wealth, we have chosen as a collective not to address the root causes because it would conflict with the white supremacy ideology of a caste-based society. Continuing the same approach to medical education in the setting of our rapidly increasing wealth gap will lead to training physicians and other healthcare providers on how to most effectively care for fewer and fewer people. Creating a new generation of healthcare providers dedicated to mitigating the many social factors that conspire to perpetuate health disparities is one important step toward how the profession can rebuild patient trust and ultimately improve patient outcomes.

The solutions must involve stakeholders from across diverse sectors ( 82 ). The medical community and related stakeholders should adopt a strategic approach to address the financial and related public policy issues that will enable the delivery of appropriate clinical care to marginalized patient populations including low those with low SES, minoritized communities, and non-European immigrants and refugees ( 40 , 48 , 54 , 83 ). The Affordable Care Act (ACA) was one such policy that dramatically increased the insurance coverage eligibility for a large number of low-income young Americans ( 84 ), with important consequences for mitigating health disparities as well as possibly reducing bankruptcy related to health care costs ( 85 ), although other data suggest that there has been no impact on bankruptcy ( 86 ). Barcellos et al. ( 87 ) reported persons with a lower income (100–250% FPL) were 31% less likely to score above the median on ACA knowledge and 54% less likely to score above the median on health insurance knowledge vs. persons with higher income levels (>400% FPL). These findings highlight the need to not only implement health policies to increase access to care for lower-income individuals but also the need to ensure such policies and associated programs are reaching those in need. The ACA may set the stage for not only more available care but also more structured medical care systems which can help improve health outcomes ( 88 ). However, improved outreach and education of the potential benefits of and access to the ACA in lower-income communities and support to ensure people are enrolled is still required ( 87 ).

A major challenge for the broader medical community is to reconceptualize how it might improve each domain that impacts health outcomes, beyond those limited to a procedure or prescription. Increasing the awareness of environmental and social factors that contribute to health disparities must be followed by actions, such as cost-effective policies, to improve disease prevention and care in impoverished communities, especially in the setting of increasing inequities in wealth and many of the other SDoH ( 88 – 92 ). Healthcare providers can directly address many of the factors crucial for closing the health disparities gap by recognizing and trying to mitigate the race-based implicit biases many physicians carry ( 93 ), as well as leveraging their privilege to address the elements of institutionalized racism entrenched within the fabric of our society, starting with social injustice and human indifference ( 91 , 94 ). Examples of evidence-based initiatives to mitigate untoward effects of socioeconomic deprivation include the use of videos and/or novellas ( 95 , 96 ), the use of social support, such as social networks ( 97 ), and primary intervention strategies including the use of mobile clinics, lay health workers, and patient navigators to address chronic diseases ( 98 – 101 ). Finally, the healthcare sector should not miss the opportunity to learn important lessons as it strives to advance the necessary policies to improve social welfare and health outcomes, as the existence of health inequities provides unique, unrecognized opportunities for understanding biological, environmental, sociocultural, and healthcare system factors that can improve clinical outcomes ( 88 – 92 ).

“ Overcoming poverty is not a gesture of charity. It is an act of justice. It is the protection of a fundamental human right, the right to dignity and a decent life”—Nelson Mandela former President of South Africa .

Data Availability Statement

Author contributions.

KN wrote the first draft of the manuscript. BB, MB, CF, and RT wrote sections of the manuscript. All author contributed to conception and design of the study, contributed to manuscript revision, read, and approved the submitted version.

Conflict of Interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher's Note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

Funding. This work was supported in part by NIH grants K02AG059140-02S1 (MB), P30AG059298 (MB and RT), R25HL126145 (MB, BB, KN, and RT), UL1TR000124 (KN), P30AG021684 (KN), K02AG059140 (RT), and U54MD000214 (RT). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.

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• Published: 20 November 2023

Disrupting links between poverty, chronic stress, and educational inequality

• Madeline B. Harms   ORCID: orcid.org/0000-0002-6703-2571 1 &
• Sherona D. Garrett-Ruffin 2  

npj Science of Learning volume  8 , Article number:  50 ( 2023 ) Cite this article

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The income-achievement gap is a significant and stubborn problem in the United States, which has been exacerbated by the Covid-19 pandemic. In this article, we link two emerging literatures that have historically been disparate: the neurobiology of poverty as a form of early life stress, and research on educational policies with the potential to reduce SES-based disparities in academic achievement. In doing so, we (1) integrate the literature on poverty-related mechanisms that contribute to early life stress, alter neurobiology, and lead to educational inequities, and (2) based on this research, highlight policies and practices at the school/classroom level and broader structural level that have the potential to address the problem of inequity in our educational systems. We emphasize that educational inequity is a systemic issue, and its resolution will require coordination of local, state, and national policies.

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Introduction.

Over 12 million children in the United States live in poverty 1 , which can be defined as having resources below the average family that results in an inability to fully participate in society 2 . Children living in poverty may experience a plethora of disruptive life events and circumstances--for example, lower-quality prenatal care, economic strain, frequent moves, higher rates of illness, food insecurity, neighborhood violence, malnutrition and greater exposure to pollution and toxins 3 , 4 , 5 , 6 . Children in poverty are also more likely to be exposed to high levels of parental stress, increasing risk for negative parenting practices 7 , 8 . Lack of parental resources to buy books and other educational materials may result in a lack of cognitive stimulation in the home 9 , 10 , and lack of time for parents to engage in conversation with children may result in lower language exposure 11 . In addition to exposing families to numerous stressors, poverty can undermine family support and other processes that would otherwise enable positive coping with such stressors 8 .

All these factors contribute to socioeconomic disparities in academic achievement. These disparities in turn contribute to lower occupational attainment and intergenerational cycles of poverty. In the past two decades, scientific understanding of the mechanisms contributing to the income-achievement gap has increased dramatically. A growing body of evidence suggests that growing up in poverty contributes to cumulative risk exposure —resulting in chronic stress which impacts neurocognitive development in ways that tend to hinder academic performance 12 , 13 , 14 . Although a low family income, in and of itself, is not necessarily stressful to children, poverty-level income often results in multiple contextual stressors and decreases families’ abilities to cope with those stressors. We use the term “poverty-related stress” to refer to this overall context of poverty. Building on previous reviews discussing links between socioeconomic status, neural circuitry, and academic readiness 15 , our aims in this article are: (1) to integrate the literature on poverty-related mechanisms that contribute to early life stress, alter neurobiology, and contribute to educational inequities, and (2) to highlight policies and practices at the classroom, school and broader systemic levels designed to address educational inequity that map onto scientific knowledge regarding the effects of chronic stress on brain development. Although child poverty is a worldwide problem, our policy recommendations will focus on the United States due to its unique economy and societal structure. We expect most aspects of this review to generalize to other high-income countries, but we acknowledge that children in low- and middle-income countries face additional challenges not covered here.

Poverty and early life stress

There is strong empirical support for the notion that poverty gets “under the skin,” meaning that the experience of poverty can lead to long-lasting biological changes in individuals 16 . Experiencing stress that is chronic and severe at early ages appears to result in neuroendocrine profiles that bias the developing nervous system toward responding to events in reactive and defensive ways 17 , in contrast to a reflective and regulated state that would facilitate academic learning. For example, childhood poverty is linked to both increased activity in threat-detecting brain circuitry and decreased activity in self-regulatory circuitry 18 . When a child is extra vigilant to potential threats in the environment at school (e.g., remarks from a teacher or classmate, or a sense of being “behind” her peers) and lacks the tools to reason through and regulate that sense of threat, she is unlikely to be able to focus optimally on learning in the classroom. Importantly, the same neural mechanisms may confer children growing up in adverse circumstances with “hidden talents” that facilitate their ability to function in harsh, unpredictable environments, including enhanced social perception, attention shifting, and creativity 19 , a point we will return to under policy recommendations.

The influence of chronic stress during childhood and adolescence (relative to later periods of life) may be exacerbated due to rapid changes in brain circuitry and maturation of the neuroendocrine system during development 20 . Chronic stress influences brain development via its effects on the Hypothalamic-Pituitary-Adrenal (HPA) axis, which regulates the body’s response to environmental demands via the release of the hormone cortisol from the adrenal gland. During periods of high stress, cortisol production is increased to help the organism deal with the stressor. However, if stress is prolonged and severe, both daily cortisol production and cortisol responses to an acute stressor may be disrupted 21 , 22 , 23 , and these disruptions are associated with health, cognitive, and behavioral problems 24 . Both early childhood and adolescence appear to be periods during which the HPA system shows heightened susceptibility to environmental influence 22 . This means that chronic and severe stress experienced during these developmental periods may be especially detrimental, tuning the nervous system to deal with stress in dysregulated ways. On the other hand, buffers or protections from stress during these times may be especially beneficial—in particular, adolescence may be a window of opportunity for consequences of previous exposure to stress to be mitigated, if positive environmental supports are present 25 .

At the neurocircuitry level, chronic stress resulting from poverty appears to impair the function of two major brain systems: (1) circuitry that allows individuals to regulate thoughts and emotions—broadly called executive function and subserved by prefrontal cortex—and (2) circuitry that facilitates detection of important sources of threat and reward in the environment (consisting of amygdala, ventral parts of prefrontal cortex, and their connections). Imbalance in detection of threat and reward may in turn impair the development of basic associative learning mechanisms and their neural correlates, including orbitofrontal cortex and anterior cingulate cortex 26 , 27 , as well as basal ganglia circuitry 28 . Furthermore, threat-detection circuitry, particularly the amygdala, activates the HPA system, facilitating the physiological stress response 29 . These inter-related brain systems of executive function and threat/reward processing likely mediate the link between socioeconomic status (SES) and academic achievement, given that academic learning depends upon a sense of safety in the classroom (low threat vigilance), and both the motivation (anticipation of reward) and ability to work towards long- term goals (executive function). For example, executive function has been shown to mediate the link between family SES in elementary school and middle school academic performance 30 .

Importantly, early life stress seems to simultaneously increase neural sensitivity to threat and decrease the ability to detect potential reward. For example, childhood poverty predicts higher amygdala and medial prefrontal cortical responses to threatening faces 31 , which may be mediated by systemic inflammation 32 . These patterns of neural response suggest heightened vigilance to threatening stimuli among some individuals who experienced poverty as children (and may also be associated with inflammation, a threat to physical health). Reward systems are also impacted by early life stress: children who experienced multiple forms of chronic stress show lower neural activation to reward in orbitofrontal brain regions during an associative learning task, along with reduced exploratory learning 26 , and a review of early childhood stress suggests lower ventral striatum function across several human and animal studies 28 . Finally, a recent comprehensive review of neuroimaging work suggests that childhood poverty/low SES alters the structure and function of brain circuitry involved in a broad number of systems necessary for adaptive functioning, including executive attention, decision-making, emotion regulation, and salience evaluation and interpretation 18 . Notably, although we have outlined reasons to predict links between neural threat and reward processing and academic learning, there is little existing research that explicitly investigates these associations.

Altered development of self-regulation and salience (i.e., threat and reward) detection systems have important implications for a child’s ability to function in a traditional Western school environment. A recent detailed review of implications of stress physiology for educational inequity outlines many of these implications: that the school year can be considered a period of adaptation (e.g., new teacher, classroom, classmates) that places high demands on a child’s stress response systems; that children from disadvantaged SES and demographic groups are likely to experience more stressors and be more affected by them due to their life history; and that teacher behavior and classroom quality can exacerbate or lessen these demands 33 . In the next section, we outline reasons why economically disadvantaged children may experience lower-quality educational environments.

Poverty and unequal access to quality education

Given that children living in poverty already experience numerous stressors, it is important to consider how pedagogical practices and the school environment may create additional chronic stress that undermines learning, further contributing to disparity in academic outcomes. Low-income students experience higher suspensions and expulsion rates, have less access to extracurricular activities, and may experience higher rates of bullying 34 , 35 . In addition, schools with a high proportion of students in poverty may have higher teacher turnover rates and fewer highly qualified teachers (i.e., less teaching experience and lower teaching effectiveness) 36 , 37 , 38 . Teachers in such schools also tend to experience higher levels of stress and burnout, which in turn negatively impacts student-teacher relationships, further reducing teacher effectiveness 39 . Although it is difficult to disentangle the school environment as a source of chronic stress from other factors in children’s lives, a recent study found that being bullied at school was linked to higher hair cortisol, which was in turn associated with poorer executive function 40 . This indicates that the school environment can serve as a source of chronic stress for children and have effects on academic skills.

Children living in poverty are also more likely to be impacted by inequitable school policies and negative social events. These children are often stereotyped as unmotivated and lacking aspiration 37 and are targets of discrimination manifested from negative practices, attitudes and institutional policies 41 . For example, during the COVID-19 pandemic, children living in poverty were disproportionately likely to experience less access to the internet, less access to school lunch programs, higher levels of food insecurity, and more unsupervised time 42 , 43 , 44 . Furthermore, although surveys indicate that regardless of income level, students perceive schools to be unsafe due to fear of school shootings and other forms of violence 45 , 46 , students in low-income schools are more likely to experience violence prevention measures such as random searches, metal detectors and police presence 47 . Thus, worries about school violence coupled with the violence prevention measures described above could lead to “anticipatory trauma” resulting in chronic stress 48 . Conversely, when schools can provide safety and support, children living in poverty are likely to benefit disproportionately 49 and are able to access the economic opportunities that come with having a high-quality education.

Neuroscience-based educational practices

As discussed earlier, research indicates that poverty is a source of chronic stress that contributes to executive function deficits, emotional dysregulation, and disruptions in salience detection 18 , which in turn impact both basic and academic learning processes 33 . To be effective in school environments, students therefore must be able to identify and manage (i.e., regulate) emotions, and understand how emotions impact decision making. Given the connection between stress, learning, and emotion, and the disproportionate effects of early life stress on executive processes, it may be particularly important to address the emotive elements of learning for children in poverty by (1) reducing potential sources of stress inadvertently embedded in the curriculum and pedagogical practices and (2) bolstering children’s emotion regulatory skills. Fortunately, there are existing trends in education, such as social emotional learning practices, that aim to address both these issues.

Scientific understanding of the connection between executive functions (EF) and children’s ability to learn in school has increased dramatically in the past decade. For example, in a study of pre-K children, both EF (working memory, inhibitory control) and emotion regulation (tested with a delay of gratification task) have been shown to predict school readiness, with EF predictive of academic readiness and emotion regulation linked to social-emotional readiness 50 . Furthermore, in this study early social-emotional readiness predicted later academic readiness, suggesting that social-emotional skills must be in place for academic learning to be optimized. More broadly, there is growing scientific consensus that aspects of EF, emotion regulation, and skills needed for school readiness are multidimensional and likely to be reciprocally linked 51 .

Related to this emerging research, in recent years, a set of curricular practices called Social Emotional Learning (SEL) has gained traction in the U.S. and worldwide 52 . Endorsing this emphasis, a recent UNESCO global report on the future of education noted that “Education policy and practice focusing on academic performance rather than balancing it with social and emotional competencies, has led to a decline in human and societal flourishing” 53 The goal of SEL is to help children develop the “knowledge, attitudes, and skills necessary to understand and manage emotions, set and achieve positive goals, feel and show empathy for others, establish and maintain positive relationships, and make responsible decisions” 54 . Some assumptions behind this method are that meaningful academic learning in a school setting is only possible when students are motivated, self-regulated, and able to connect with their peers; and that the purpose of schooling goes beyond pure academic learning--formal education should also develop students’ interpersonal skills that they will need for work and life.

Approaches to SEL must be tailored to children’s developmental level. Young children benefit more from SEL programs that focus on skill development, skill supplementation and skill revision, as compared to elementary and high school students who benefit more from a combination of skill-based and mindset-based SEL programming 55 . Given young children’s developing understanding of perspective taking and mixed emotional states, preschool SEL programs provide students with opportunities to practice sharing, cooperation and learning via modeling, sociodramatic play, and teacher feedback 56 . In elementary school, specific practices build on developing social and academic skills, ranging from Morning Meetings, a structured space for students to check in with their emotions and with each other at the start of the school day; to forms of inquiry-based learning, such as “Discover, Discuss, Demonstrate.” Adolescents are confronted with more complex psychosocial developmental tasks, such as developing identity, autonomy, acceptance from peers, competence, and goal attainment 57 . Effective adolescent SEL programs have been found to build on students’ desires for status and respect by providing opportunities for them to use SEL skills and concepts in meaningful ways, such as serving the community and leading school discussions around topics of developmental interest, such as teen-age pregnancy, youth violence and smoking 58 , 59 , 60 .

A number of studies find that SEL programs, when implemented well, have positive impacts both on growth in the skills targeted and on academic outcomes 52 , 60 , 61 . Multi-country meta-analytic studies also indicate largely positive effects of SEL programs on both academic outcomes 62 and long-lasting impacts on socio-emotional skills and high school graduation rates 63 . There is also intriguing evidence that SEL may have positive impacts on children’s stress physiology. In a randomized trial, considered the gold-standard for program efficacy research, Schnonert-Reichl and colleagues 52 found that 4th-5th grade children who received an SEL program that included mindfulness training (MindUP) showed steeper diurnal cortisol slopes at post-test (indicative of healthier HPA axis function), as well as improved outcomes in social-emotional functioning, self-reported school self-concept, and teacher-reported math achievement, relative to a control group of children who received a social responsibility training program. In another recent study, behavior improvements in a group of low-income kindergartners enrolled in an SEL program (PATHS) were observed relative to an active control condition, which were sustained over time, even a year after the program ended 64 . Interestingly, children with lower heart rate variability (HRV) at the start of intervention--which usually reflects poor emotion regulation--were more likely to show sustained behavioral benefits from the program a year after it ended, suggesting less sensitivity to the withdrawal of a supportive environmental asset.

These results indicate that stress physiology can interact with behavioral interventions in complex ways, emphasizing the need for more research integrating both biological and behavioral outcome measures 33 . Although there is robust evidence that SEL contributes positively to the social and academic development of both middle class and disadvantaged children 61 , more research is also needed to determine the mechanisms of influence--in particular, whether SEL contributes to positive changes in socio-emotional skills and learning via biological changes in stress physiology and/or neural function. For example, do SEL programs improve biological correlates of emotion regulation (vagal tone, prefrontal connectivity to the limbic system) and salience detection (neural activation to anticipated reward/less hypervigilance to threat)? In other words, we have yet to determine the extent to which SEL can “get under the skin” and promote resistance to physiological consequences of stress resulting from poverty. This knowledge is important because to implement the most effective interventions, scientists and practitioners should understand the mechanisms through which they operate. For example, an intervention that positively alters physiology and behavior would be expected to have a more long-lasting and generalizable impact than one that influences behavior, but not underlying neurophysiology.

Further research is also needed to identify factors that influence the efficacy of SEL programs. Such programs often involve multiple components, such as activities to foster positive classroom community, mindfulness exercises, and changes in methods of instruction (e.g., greater emphasis on active or self-directed learning). We cannot currently determine whether one of these components makes most of the difference, or whether the holistic integration of all facets is needed (i.e., the whole is greater than the sum of its parts). In this regard, it may be telling to examine instances where SEL-related curriculum changes were not successful. For example, one multi-site study found no improvement in mental health outcomes after an 8-week mindfulness program among middle school students; in fact, the program appeared to increase anxiety among some subgroups with low baseline mental health concerns 65 . Explanations suggested by the authors included lack of research on the developmental trajectory of mindfulness in early adolescence, low at-home compliance with the program, and variation in instructor experience. In contrast, in a small study of predominantly Hispanic/Latino at-risk students at an alternative high school 66 , students who completed a similar mindfulness program showed reductions in anxiety, perceived stress, and depression relative to a control group that completed a substance abuse prevention program. The authors suggest factors that were crucial to success, including establishing a physical environment where students felt safe (gym versus classroom), establishing trust with the instructor during unstructured times, and inviting versus requiring student participation, giving students a sense of agency 66 . Results from larger meta-analyses and randomized control trials of mindfulness interventions in adolescents have been mixed, with little evidence for unambiguously positive outcomes 67 , 68 . Mixed success of isolated mindfulness programs, in contrast to mostly positive effects of broader SEL programs, suggest that integrated curricula with classroom teachers (who may serve as safety figures to children) leading activities may be key to these positive outcomes. This would be consistent with the notion that supportive adults can buffer physiological stress responses in children 69 , but this remains to be tested in the school environment.

Given increasing racial and ethnic diversity in the U.S. population, cultural sensitivity is also important to consider. Jagers, Rivas-Drake, & Williams 70 discuss the notion of “transformative SEL,” which would foster “critical citizenship” in addition to the broad goals of SEL programming. They contrast transformative SEL with more traditional personally responsible or participatory forms, which could actually undermine aspects of identity development for ethnic/racial minority or immigrant children by facilitating assimilation and/or acculturation, implicitly endorsing the superiority of majority group norms. Transformative SEL, in contrast, would equip students with knowledge and skills to challenge unjust norms they encounter. Transformative SEL practices aim to promote positive cultural identity and a sense of agency/purpose, which have been linked to more positive stress profiles 70 , 71 , 72 that may support resilience.

Finally, better attempts to leverage potential cognitive advantages that low-SES children may possess, including social perception, attention shifting, and creativity, have the potential to mitigate SES-based educational disparities. These might take the form of increased team or group work, an emphasis on applying learned material to real-world problems, and incorporating oral or narrative learning and assessment strategies 19 . These suggested strategies need to be tested through empirical research.

System-level strategies to reduce the effects of poverty on academic achievement

To reduce SES-based disparities in academic achievement, it is our view that multifaceted and structural approaches that change policies at the national, state and district levels, as well as addressing the school environment, home environment and community environment, are needed. Poverty reduction strategies must address the structural causes of poverty. Sadly, due to political stalemate, little progress on this issue has been made in the past 30 years, with the exception of some temporary measures taken during the Covid-19 pandemic (e.g., expanding the Child Tax Credit). At the national, state and district level, a restructuring of funding policies is necessary to ensure that schools receive necessary resources to support low-income students. For example, the practice of funding schools using property taxes is insufficient in higher poverty areas and is arguably unconstitutional because such funding practices lead to inherently unequal schools in terms of resources and opportunities 73 . To reduce the achievement gap among racially minoritized children, policies are needed to reduce not only poverty, but also structural racism. For example, Black, Latinx, and Native American students experience more suspensions and exclusions as compared to other demographic groups, although they do not display more problematic behavior 74 . In addition, paid school lunch policies in many states create unnecessary burdens to food access that hinder learning. Finally, children living in poverty need greater access to preventive, curative and diagnostic healthcare. It is crucial to acknowledge the need for these broad changes to school funding structures, disciplinary practices, access to physical and educational resources, and healthcare systems as a foundation that is needed to facilitate the school and classroom-level changes we recommend.

The income-education gap is a difficult problem, and schools and communities have unique structural challenges in addressing this issue. While still in the early stages, researchers are beginning to use the neuroscience of stress to inform teaching and learning practices that may contribute to equalizing educational opportunity. Further research is needed to determine which aspects of current intervention programs are most effective (e.g., explicit training of emotion regulation skills, cultivation of caring teacher-child relationships, classroom community building, critical citizenship), how these interventions programs may impact children’s physiological responses to stress and contribute to their overall health, and how neural responses affected by chronic stress (e.g., threat and reward detection) impact academic learning. Our understanding of these mechanisms will be aided by identifying the indirect pathways through which poverty-related stress affects academic achievement (e.g., via family conflict, cognitive deprivation, physical inflammation, etc.). As various mechanisms are identified, more targeted interventions can be developed to address these specific issues. In addition, further research is needed on potential impacts of genetics and gene-environment correlation on both susceptibility to stress and academic achievement 75 , 76 . In part due to the fallout from the Covid-19 pandemic, the current state of education policy in the U.S. is at a turning point, presenting an exciting opportunity for researchers and practitioners to integrate stress neurobiology into the curriculum and positively influence children’s overall development.

Reporting summary

Further information on research design is available in the Nature Research Reporting Summary linked to this article.

Data availability

No primary data was used in writing this manuscript.

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Harms, M.B., Garrett-Ruffin, S.D. Disrupting links between poverty, chronic stress, and educational inequality. npj Sci. Learn. 8 , 50 (2023). https://doi.org/10.1038/s41539-023-00199-2

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Guest Essay

The Cost of Protectionism Will Be Paid by the World’s Poorest

By Shekhar Aiyar

Mr. Aiyar is an economist.

The World Bank’s measure of extreme poverty, at $2.15 a day, represents a level of deprivation that is rarely seen in the West. At this income, hunger or its shadow is an inescapable feature of life. Estimates suggest that over half the children born to poor families are undernourished . One could argue that even a small material improvement for a family living in such dire circumstances adds more to the sum of human welfare than big gains for the more fortunate.

One of humanity’s greatest achievements over the past half century has been its striking progress in reducing poverty. The share of the global population living under the poverty line fell to under 10 percent in 2021 from well over 40 percent in 1981, with much of the reduction coming from just two countries: China and India. The decline was so unexpectedly rapid that a United Nations goal of halving global poverty was achieved five years early. The improvement has also led to a more equitable distribution of global income, with developing countries accounting for a sharply rising share of world G.D.P.

International trade was indispensable to these gains. In the late 1970s and mid-1980s, China and India increasingly opened up their economies to the world. And many other countries prospered by using trade as a ladder of development, including the East Asian “Tigers” earlier in the 20th century.

All this is imperiled now that Western countries are turning increasingly protectionist. On both sides of the Atlantic, and both sides of the aisle in Congress, the idea has gained currency that trade with less affluent countries costs jobs and lowers wages. This kind of zero-sum thinking would sharply curtail development opportunities for countries with living standards far below those in the West.

Through its powerful link to economic growth , international trade has long been a scourge of global poverty. Developing countries that liberalized their trade regimes and integrated with the world economy — call them “globalizers” — have vastly outperformed the non-globalizers over the past four decades. The globalizers have also grown much faster than rich countries, allowing them to gradually reduce the still yawning per capita income gap with the West.

China and India have been among the world’s fastest-growing economies since the 1980s, together lifting an astonishing 1.1 billion people out of absolute poverty. Trade liberalization lay at the heart of both countries’ economic reforms , with the ratio of trade to G.D.P. soaring after liberalization. They reforms included tariff reductions, the elimination of licensing requirements and import monopolies, and greater exchange rate flexibility. Combined with a multitude of domestic policy changes, they unleashed the dynamism of local entrepreneurs. Businesses had much easier access to foreign ideas, capital and markets. At the same time, greater domestic competition, including competition from imports and from newly established subsidiaries of foreign companies, weeded out inefficient businesses and spurred brisk productivity growth.

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6 facts about economic inequality in the U.S.

Rising economic inequality in the United States has become a central issue in the race for the Democratic presidential nomination, and discussions about policy interventions that might help address it are likely to remain at the forefront in the 2020 general election .

As these debates continue, here are some basic facts about how economic inequality has changed over time and how the U.S. compares globally.

How we did this

For this analysis, we gathered data from the U.S. Census Bureau, Organization for Economic Cooperation and Development and the World Bank . We also used previously published data points from Pew Research Center surveys and analyses of outside data.

Over the past 50 years, the highest-earning 20% of U.S. households have steadily brought in a larger share of the country’s total income. In 2018, households in the top fifth of earners (with incomes of $130,001 or more that year) brought in 52% of all U.S. income, more than the lower four-fifths combined, according to Census Bureau data.

In 1968, by comparison, the top-earning 20% of households brought in 43% of the nation’s income, while those in the lower four income quintiles accounted for 56%.

Among the top 5% of households – those with incomes of at least $248,729 in 2018 – their share of all U.S. income rose from 16% in 1968 to 23% in 2018.

Income inequality in the U.S. is the highest of all the G7 nations , according to data from the Organization for Economic Cooperation and Development . To compare income inequality across countries, the OECD uses the Gini coefficient , a commonly used measure ranging from 0, or perfect equality, to 1, or complete inequality. In 2017, the U.S. had a Gini coefficient of 0.434. In the other G7 nations, the Gini ranged from 0.326 in France to 0.392 in the UK.

Globally, the Gini ranges from lows of about 0.25 in some Eastern European countries to highs of 0.5 to 0.6 in countries in southern Africa, according to World Bank estimates .

The black-white income gap in the U.S. has persisted over time. The difference in median household incomes between white and black Americans has grown from about $23,800 in 1970 to roughly $33,000 in 2018 (as measured in 2018 dollars). Median black household income was 61% of median white household income in 2018, up modestly from 56% in 1970 – but down slightly from 63% in 2007, before the Great Recession , according to Current Population Survey data.

Overall, 61% of Americans say there is too much economic inequality in the country today, but views differ by political party and household income level. Among Republicans and those who lean toward the GOP, 41% say there is too much inequality in the U.S., compared with 78% of Democrats and Democratic leaners, a Pew Research Center survey conducted in September 2019 found.

Across income groups, U.S. adults are about equally likely to say there is too much economic inequality. But upper- (27%) and middle-income Americans (26%) are more likely than those with lower incomes (17%) to say that there is about the right amount of economic inequality.

These views also vary by income within the two party coalitions. Lower-income Republicans are more likely than upper-income ones to say there’s too much inequality in the country today (48% vs. 34%). Among Democrats, the reverse is true: 93% at upper-income levels say there is too much inequality, compared with 65% of lower-income Democrats.

The wealth gap between America’s richest and poorer families more than doubled from 1989 to 2016, according to a recent analysis by the Center. Another way of measuring inequality is to look at household wealth, also known as net worth, or the value of assets owned by a family, such as a home or a savings account, minus outstanding debt, such as a mortgage or student loan.

In 1989, the richest 5% of families had 114 times as much wealth as families in the second quintile (one tier above the lowest), at the median $2.3 million compared with $20,300. By 2016, the top 5% held 248 times as much wealth at the median. (The median wealth of the poorest 20% is either zero or negative in most years we examined.)

The richest families are also the only ones whose wealth increased in the years after the start of the Great Recession. From 2007 to 2016, the median net worth of the top 20% increased 13%, to $1.2 million. For the top 5%, it increased by 4%, to $4.8 million. In contrast, the median net worth of families in lower tiers of wealth decreased by at least 20%. Families in the second-lowest fifth experienced a 39% loss (from $32,100 in 2007 to $19,500 in 2016).

Middle-class incomes have grown at a slower rate than upper-tier incomes over the past five decades, the same analysis found . From 1970 to 2018, the median middle-class income increased from $58,100 to $86,600, a gain of 49%. By comparison, the median income for upper-tier households grew 64% over that time, from $126,100 to $207,400.

The share of American adults who live in middle-income households has decreased from 61% in 1971 to 51% in 2019. During this time, the share of adults in the upper-income tier increased from 14% to 20%, and the share in the lower-income tier increased from 25% to 29%.

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Katherine Schaeffer is a research analyst at Pew Research Center .

Income inequality is greater among Chinese Americans than any other Asian origin group in the U.S.

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