Reducing poverty among children: Evidence from state policy simulations

Area of Science:

• Social Sciences
• Economics
• Public Policy

Background:

• Child poverty remains a significant societal challenge in the United States.
• Existing state-level policies aimed at poverty reduction exhibit considerable variation.
• Understanding the impact of policy generosity is crucial for effective poverty alleviation.

Purpose of the Study:

• To estimate the potential child poverty reduction achievable by adopting the most inclusive state policies.
• To compare the impact of four key anti-poverty programs: SNAP, EITC, TANF, and CTC.
• To quantify the aggregate effect of universal adoption of best-practice policies.

Main Methods:

• Simulation analysis using state-level policy data.
• Modeling the impact of adopting the most generous state policies for SNAP, EITC, TANF, and CTC.
• Calculating projected reductions in the child poverty rate.

Main Results:

• The state Earned Income Tax Credit (EITC) policy demonstrated the largest potential impact, reducing child poverty by 1.2 percentage points.
• Supplemental Nutrition Assistance Program (SNAP) followed, with potential reductions from adopting the most inclusive policies.
• Universal adoption of the most generous policies across all four programs could decrease the child poverty rate by 2.5 percentage points, lifting 5.5 million children out of poverty.

Conclusions:

• State EITC policies represent a powerful tool for child poverty reduction.
• A coordinated approach, adopting the most inclusive policies across SNAP, EITC, TANF, and CTC, offers substantial potential for nationwide child poverty alleviation.
• Policy harmonization at the highest state standards could significantly improve child economic well-being.