Education in States and Nations: 1991

(ESN) Indicator 5: Percentage of population age 17 years or younger in poverty

The economic conditions of children's lives can affect their performance in school. Poor children may not have a nutritionally-adequate diet, and so may be less alert during class. They also may have less free time in which to study because they must work to earn extra income for their family. They may live in a home environment not conducive to study - crowded and noisy, perhaps - with few books or other materials that promote learning. Thus, poor children may come to school every day less prepared to learn than other children. "Children" are defined here as all those 17 years of age or younger.

• The child poverty rate in the United States in 1991 was highest among the countries for which data are available and more than double the rate for 13 of the 17 other countries, as measured in various years from the mid-1980s to the early-1990s.

• Of the 17 other countries represented here, only 4 had child poverty rates above 10 percent, whereas all the U.S. states but New Hampshire had rates that high.

Notes on interpretation:

The poverty threshold used here is the U.S. standard - 40 percent of the median income - and other countries' data are adapted to it. All households with incomes below the threshold are classified as poor, as are any children living in those households. The percentage of children in poverty, then, is the percentage of all children who are classified as poor. However, this measure should not be generalized to infer poverty rates for demographic groups other than children.

These poverty rates are measured after taxes and transfers; that is, they account for the effect of taxes and of governmental aid programs to the poor. Poverty rates also can be measured before taxes and transfers, in which case the effect of the government aid programs are not accounted for. Poverty rates before taxes and transfers primarily reflect people's job income, and ignore benefits from government transfer programs, such as (in the United States) social security, AFDC; food stamps, and Medicaid payments. Some other countries' child poverty rates are close to the U.S. rate before transfers; but the effect of government aid programs to the poor sets them apart after transfers. On average, European governments provide more generous transfer payments to their poor.

The poverty rate used here is a relative, rather than an absolute, measure of poverty. A household below the poverty threshold (of 40 percent of the median income level) in a relatively wealthy country could actually be wealthier than a household above the poverty threshold in a relatively poor country, where the median income level is lower. Taking that into consideration, this poverty measure is more a measure of the range of the income distribution in a country or state than it is of well-being or purchasing power. Government transfer programs to the poor usually have the effect of truncating the bottom end of the income distribution at a level deemed to be sufficient for a minimally acceptable standard of living.

The poverty rate used here is not adjusted for relative costs-of-living with a purchasing power parity index or other index of adjustment. Poverty rates may be higher in locations where the costs-of-living are lower and thus, one could argue, the real effect of lower income is less onerous.

Table 4b

Figure 5