Describe How Poor Families Struggle to Make Ends Meet, and List Ways in Which Children Are Affected
This geographic dimension of family budget measurements offers a comparative advantage over using poverty thresholds, which only use a national baseline in its measurements. Basic family budget measurements are adjustable by family type because expenses vary considerably depending on the number of children in a family and whether or not a family is headed by a single parent or a married couple. The second part of this analysis compares data on actual working family incomes and the associated basic family budgets. Such a comparison can show, for example, what percentage of two-parent families with two children in Pittsburgh, Pa., are actually earning enough income to meet basic family budget thresholds.
Long-term studies that followed children who participated in Head Start have found that it raises school completion rates and improves other outcomes years later. These longer-term gains may relate to recent research showing that children who live in poverty can face increased intense stress, the physiological effects of which can impede their ability to learn and do well in school. This may help to explain why emerging research finds that significantly increasing the incomes of poor families, through measures like the EITC, produces gains in educational attainment and test scores — outcomes that, in turn, are associated with increased earnings and employment when the children reach adulthood (Nada Eissa and Hilary Hoynes, 2005). To be sure, some critics question the effects of safety net programs on individual behavior, such as work effort, and how that affects poverty. Several of the leading researchers in the field have conducted a comprehensive review of the available research and data on how safety net programs affect poverty, and the National Bureau of Economic Research (NBER) has published their results. They found that, after accounting for what the research finds to be modest overall behavioral effects, the safety net lowers the poverty rate by about 14 percentage points. In other words, one of every seven Americans would be poor without the safety net but is above the poverty line because of it. That translates into more than 40 million people (Jeffrey Grogger, 2003).
Using conventional theoretical perspectives, it would be hard to measure this assistance in terms of time and money. The parents were not increasing their time in teaching; they were increasing their time in other household responsibilities to free up other family members' time to teach.
Nada Eissa and Hilary Hoynes, “Behavioral Responses to Taxes: Lessons from the EITC and Labor Supply,” NBER Working Paper No. 11729, November 2005, http://www.nber.org/papers/w11729.
Jeffrey Grogger, “The Effects of Time Limits, the EITC, and Other Policy Changes on Welfare Use, Work, and Income among Female-Head Families,” Review of Economics and Statistics, May 2003.
Stacy Dickert, Scott Houser, and John Karl Scholz, “The Earned Income Tax Credit and Transfer Programs: A Study of Labor Market and Program Participation,” Tax Policy and the Economy, Vol. 9, MIT Press, 1995.
Jeffrey Grogger, “The Effects of Time Limits, the EITC, and Other Policy Changes on Welfare Use, Work, and Income among Female-Head Families,” Review of Economics and Statistics, May 2003