Indicator 35: Children in Poverty
Poverty tends to limit children's developmental and educational opportunities; the higher the poverty rate, the greater the number of children who are damaged by poverty's insidious effects. This indicator provides a measure of the percentage of children living below the poverty line in industrialized countries most similar to the United States. For this indicator, the poverty line is set at 40 percent of adjusted median family income. The measure of children living below the poverty line, when combined with data about the impact of taxes and government transfers on income, suggests how effective government fiscal policies are at reducing income inequalities and poverty in a society.
- Before adjusting for taxes and transfers, the child poverty rate of both France and the United Kingdom approached or exceeded that of the United States (in various years between 1984 and 1986).
- The United States was the only country reported with double-digit child poverty rates (20.4 percent) after adjustment for taxes and transfers. The posttransfer poverty rates for children in the United States were between 2 and 10 times higher than those in the other countries with available data.
Table 35: Percentage of children (ages 17 or younger) whose family income is below 40 percent of adjusted median family income, by family status, tax and transfer status, and country: various years
------------------------------------------------------------------------------------------------ Children in single All children parent families ----------- ------------------ Before After Before After Country Year transfer transfer transfer transfer ------------------------------------------------------------------------------------------------ G-7* Canada 1987 15.7 9.3 56.6 37.1 France 1984 21.1 4.6 43.1 13.1 West Germany (former) 1984 8.4 2.8 46.0 15.9 United Kingdom 1986 27.9 7.4 71.2 8.5 United States 1986 22.3 20.4 58.1 54.2 Other Australia 1985 16.4 9.0 70.2 34.6 Netherlands 1987 14.1 3.8 70.3 3.8 Sweden 1987 7.9 1.6 23.2 2.0 ---------------------------------------------------------------------------------------------------------------------------------------
*No data available for Italy and Japan.
NOTE: Income includes all forms of income plus food stamps and similar benefits in other nations, minus federal income and payroll taxes. The resulting poverty rate differs slightly from the official U.S. poverty rate produced by the Bureau of the Census because it takes into account food stamps and the Earned Income Tax Credit. Income is adjusted using the U.S. Poverty Line Equivalence scale.
SOURCE: Luxembourg Income Study, published in Timothy Smeeding, (January-February, 1992) "Why the U.S. antipoverty system doesn't work very well," Challenge, p. 33, table 3.
Figure 35: Percentage of children in poverty, before and after tax and transfers, by country:* various years
*Countries are sorted in descending order by percentage of children in poverty, after tax and transfers.
SOURCE: Luxembourg Income Study, published in Timothy Smeeding, (1992, January-February). "Why the U.S. antipoverty system doesn't work very well," Challenge, p. 33, Table 3.
[Indicator 34]
[Indicator 36]