Why so many children are poor

According to the official U.S. measure of poverty, in 1995 the child poverty rate in this country was nearly 21%, compared with an adult poverty rate of 11%. This article explores why, according to the official measure, there are so many poor children. Working from the premise that children are poor because they live with poor adults, the reasons for adult poverty are reviewed. Both economic forces and demographic trends have contributed to growing inequality of earnings among workers. That inequality coupled with stagnating real earnings has increased poverty. In addition, education, age, and race affect an individual's earning capacity; the article examines the likelihood that an individual will earn enough to keep his or her family out of poverty, given the individual's educational attainment, age, and race. The reasons for the large difference between the child and adult poverty rates are explored, using a decomposition of the poverty population to show how demographic characteristics such as higher fertility rates among poor families and the higher prevalence of single-parent families among the poor lead to substantially higher poverty rates for children than for adults. Finally, the article examines the validity of the official poverty measure and reviews how an alternative measure proposed by a National Research Council panel would address the official measure's shortcomings. If the panel's proposed measure were adopted, it would change the statistical face of poor children. It would, for example, show an increase in the proportion of poor children who live in families with two parents and a corresponding decrease in the proportion in families with only one parent, and it would show an increase in the proportion of children who live in families with at least one full-time employed adult and a corresponding decrease in the proportion in families with no adult employed full time.