Public Policy, Demographic Change, and the Incidence and Severity of Long-Term Child Poverty through the 1990s

Lloyd D. Grieger, University of Michigan
Jessica J.B. Wyse, University of Michigan

Although annual child poverty dropped to historic lows in the late 1990s, it is not known if long-term poverty followed similar patterns. Using the Panel Study of Income Dynamics we show that long-term poverty rates declined from the 1980s to 1990s for white children, but remained steady for black children. For both, rates of long-term deep poverty remained at 1980s levels, with black children almost 18 times as likely as white children to be persistently deeply poor. These trends were simultaneously driven by changing demographic and policy realities. Income packages of the long-term poor shifted from consisting of roughly equal parts wages and government assistance in the 1970s to a plurality of government assistance and wage supplements in the 1990s. Changes in long-term poverty due to changing demographics over time and across race groups are estimated using a modified version of the Oaxaca-Blinder regression decomposition for non-linear models.