Greg Duncan
“Deep poverty among U.S. children is considerably more pervasive than among children in most Western industrialized nations,” says Greg Duncan, Distinguished Professor of education at UCI. Michelle S. Kim / University Communications

Poverty in early childhood has far-reaching effects on earnings and employment in adulthood, according to Greg Duncan, Distinguished Professor of education at UC Irvine.

He came to this conclusion after analyzing data from the Panel Study of Income Dynamics, which has followed a nationally representative sample of U.S. families since 1968.

Duncan and colleagues posed this question: If you increase annual income for families with children under 5 but don’t change parent education, family structure, parenting style or genetics, what change – if any – can you expect in the children? The answer: significantly higher adult earnings and work hours and less food stamp receipt.

The study, published in the January/February issue of the journal Child Development, has important implications for welfare/work programs, especially as states facing tighter budgets look for places to cut. Duncan, a newly elected member of the National Academy of Sciences, points to the importance of retaining funding of work-related income supplements for families with young children and of proven early-intervention programs as a means of saving money on remedial programs down the line.

Here, he discusses the new research, childhood poverty and cost-effective strategies for addressing it.

Q: Why is this study important?
A: It’s the first to link high-quality income data across the entire childhood period with labor market success in middle adulthood. It finds that economic conditions in early childhood matter the most for labor market success, a result that corroborates the growing body of intervention evidence connecting enriched early childhood environments to long-run success.

Q: So the timing of poverty matters?
A: Yes, with economic deprivation before age 5 appearing to be particularly harmful. Emerging evidence from human and animal studies highlights the critical importance of early childhood in brain development and subsequent cognitive, social, emotional and health outcomes.

Q: Which intervention programs are most effective?
A: Welfare-to-work programs that boost family income have been shown to improve preschool and elementary school students’ test scores. But this effect isn’t seen when earnings increases are met by dollar-for-dollar reductions in welfare payments. With programs that supplement earnings to more than offset welfare losses, family incomes – and children’s test scores – rise.

Q: What kind of income boost are we talking about?
A: One way of assessing the policy relevance of the study findings is to consider an extra $3,000 of income per year – well within the magnitude of past policy changes, such as the U.S. earned income tax credit. Study results suggest that a $3,000 boost in annual family income between a child’s gestation and fifth birthday is associated with 19 percent higher earnings and 135 more hours worked yearly in adulthood.

Q: Any advice for lawmakers looking to address childhood poverty?
A: Greater policy attention should be given to correcting situations involving deep and persistent poverty early in childhood. In the case of welfare policies, we should ensure that sanctions don’t deny benefits to families with very young children. Income transfer policies such as the existing child tax credit or the popular earned income tax credit could be designed to provide higher benefits to families with young, rather than older, children.