Economic Costs of Early Childhood Poverty

Greg J. Duncan, Northwestern University
Ariel Kalil, University of Chicago

Empirical research illustrates that relative to non-poor children poor children are less successful in school and in the labor-market as adults, have poorer health, and are more likely to commit crimes and engage in other forms of problem behavior. Our paper focuses on the long-run impact of low income early in life, net of correlated family factors, on adult outcomes measured as late as age 37. We draw on national data from the PSID, the longest running longitudinal study of household income in the US. Income is measured in every year of a child’s life from the prenatal period through age 15, distinguishing income early in life (prenatal through 5th year) from income in middle childhood and adolescence. We find statistical links between early childhood poverty and five adult outcomes: completed schooling, labor-market hours and earnings, and receipt of income from both the Food Stamp and AFDC/TANF cash assistance programs.