Summary: Experiencing poverty in childhood increases one's likelihood of poverty in adulthood. However, past research offers competing accounts on why the strength of the intergenerational persistence of poverty varies across contexts and the mechanisms through which it is channeled. This study uses administrative- and survey-based panel datasets to investigate differences in the intergenerational persistence of poverty in the United States (U.S.), Australia, Denmark, Germany, and the United Kingdom (UK). We introduce an accounting framework to fully decompose the association of childhood poverty and adult poverty into four components: family background, mediating benchmarks, tax/transfer insurance effects, and a residual poverty penalty. We find that intergenerational poverty in the U.S. is around three times stronger than in Denmark, Germany, or the UK, and twice as strong as in Australia. While intergenerational poverty in Denmark is primarily channeled through family background effects, it persists in the UK and Germany through mediation benchmarks such as adult education and employment. The U.S. disadvantage is not primarily channeled through family background effects, mediation effects (such as unequal access or returns to education), neighborhood effects, or racial/ethnic discrimination. Instead, the U.S. has comparatively weak tax/transfer insurance effects and a more severe residual poverty penalty than in other countries. Should the U.S. adopt the tax/transfer insurance effects of peer countries, its intergenerational persistence of poverty could decline by more than one-fourth from its observed value. The study's data, conceptual, methodological, and substantive advancements offer a foundation for renewed research on the intergenerational persistence of poverty in high-income countries. 

Summary: We study the short- and medium-run employment responses to the withdrawals of two programs that expanded the coverage and generosity of unemployment benefits in the U.S. from March to August 2021. That 18 states withdrew unemployment benefits earlier than other states offers a unique policy setting to investigate transitions out of unemployment by race/ethnicity, implications for the quality of job matches, and the persistence of employment effects. Difference-in-differences estimates using panel data from the U.S. Current Population Survey demonstrate that states’ withdrawals of unemployment benefits increased transitions from unemployment to employment, but with large racial heterogeneity: Black and Asian individuals experienced increases in transitions from unemployment into inactivity as a result of the policy change, while White individuals exiting unemployment generally transitioned into employment. Regarding job quality, the benefit withdrawals increased the take-up of lower-pay routine and manual occupations. One year after the policy change, the positive employment effect of the early benefit withdrawal had disappeared, while the negative effects on job quality outcomes persisted.

Summary: From 2019 to 2021, the child poverty rate in the United States (US) declined by more than 50 percent, largely due to the temporary provision of an unconditional child allowance. This research note uses micro-data from more than 50 countries, and US data spanning more than 50 years, to place the 2021 child poverty rate in historical and international perspective. We demonstrate that whether using the Supplemental Poverty Measure (SPM) or relative poverty measures, the US child poverty rate in 2021 was at its lowest level since at least 1967. The US tax and transfer system reduced the 2021 SPM child poverty rate by more than 75 percent relative to the pre-tax/transfer child poverty rate, three times greater than its mean reduction effect between 1967-2019. Internationally, the temporary child allowance in the US reduced its 2021 child poverty rate from the 80th percentile to the 40th percentile among all countries examined. From 2019 to 2021, the relative US child poverty rate fell from a level comparable to Bulgaria to a level comparable to Germany. Moreover, the US tax and transfer system progressed from reducing child poverty at a rate comparable to Peru in 2019 to a rate comparable to Norway in 2021.

Summary: The economic crisis triggered by COVID-19 put families with children in the United States under significant financial stress. The federal government’s largest response in 2021 was the American Rescue Plan Act, which temporarily expanded the Child Tax Credit (CTC) into a large, unconditional child allowance providing monthly income support to families with children. This study investigates consumption responses to the CTC expansion using anonymized mobile-location data and debit/credit card data that track visits and spending at 1.3 million establishments across counties that cover 99.6% of the U.S. population. For identification, we exploit variation in the size of households’ income gains due to the CTC across counties in a difference-in-differences framework spanning January 2021 through May 2022. We find that counties benefiting most from the CTC expansion experienced larger increases in visits to child care centers; increased spending amounts at personal care establishments, restaurants, and grocery and general stores; and no significant increase in consumption at alcohol, tobacco, or gambling establishments. We find some evidence that CTC payment frequency matters for spending decisions: when distributed at monthly frequency, the CTC payments contributed to greater consumption at grocery and general stores. When distributed as a lumpsum, the benefit contributed to greater consumption at children’s and family clothing stores. Both payment types contributed to greater visits to child care centers. These findings suggest that the CTC expansion increased household consumption and particularly spending on children.

Summary: Past research has identified single parenthood as a key risk factor for poverty and adverse child outcomes. This study proposes an expanded conceptualization of single parenthood that acknowledges their within-group heterogeneity. Specifically, we identify four different pathways into single parenthood (divorce, separation, widowhood, and never getting married). Using panel data for the U.S., we investigate trends in these single parent pathways over time, the diversity of demographic characteristics across pathways into single parenthood, and the implications of each pathway for short- and long-run family outcomes. We find, first, that in 2019, most single parents were single because they never got married, compared to the 1970s when the most common pathway into single parenthood was divorce. Second, there exist large heterogeneities by age, race/ethnicity, and education across the pathways. Third, never getting married and separation are associated with the most negative consequences for child poverty, as well as children’s later-life education and employment outcomes. In contrast, no statistical differences emerge in children’s later-life employment outcomes for those raised by divorced or widowed single parents compared to children raised in two-parent families. Our findings demonstrate that studies treating single parenthood as a homogenous demographic overlook large and meaningful within-group differences.