The Effects of Children Growing Up Poor
In the global economy, the greatest potential for success turns on having an educated, healthy, adaptable workforce. It is in all of our interests that children grow up under conditions that prepare them for the economy of the future. But, an estimated eight percent of all children and 28 percent of African-American children spend at least 11 years of childhood in poverty.
In “The Economic Costs of Poverty in the United States: The Subsequent Effects of Children Growing Up Poor,” Harry Holzer, Diane Whitmore Schanzenbach, Greg Duncan, and Jens Ludwig concluded that allowing children to grow up in persistent poverty costs our economy $500 billion dollars per year in lost adult productivity and wages, increased crime, and higher health expenditures.
Holzer and his co-authors explain that children who grow up in poverty are more likely than non-poor children to have low earnings as adults, reflecting lower workforce productivity. They are also somewhat more likely to engage in crime (though that is not the case for the vast majority) and to have poor health later in life. Holzer and co-authors estimate that each year, childhood poverty:
• Reduces productivity and economic output by about 1.3 percent of GDP
• Raises the costs of crime by 1.3 percent of GDP
• Raises health expenditures and reduces the value of health by 1.2 percent of GDP.
Tags: Children, High Cost of Poverty
