Young Children in States Severely Impacted by the Recession

Nov 16, 2009

By Hannah Matthews and Elizabeth Hoffmann

Research shows that children who fall into poverty during a recession earn less, achieve lower levels of education in adulthood, and are less likely to be gainfully employed over their lifetimes than those who avoided poverty. This makes a strong case for investing in children in times of economic downturn. Yet, revenue shortages in many states are causing investments in children and families to be cut.

The Pew Center on the States recently released a report examining states' fiscal health based on indicators such as revenue, budget gaps, unemployment rates, and foreclosure rates. Pew's analysis indicates that ten states are facing fiscal difficulties and severely impacted by the recession: Arizona, California, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island, and Wisconsin.

A third of the country's young children reside within these ten states. The poverty rate for children under age 6 ranged from 14 percent in New Jersey to 23 percent in Arizona in 2008, although more children are likely in poverty now. Investments in supports for young children and their families to help ameliorate some of the recession's detrimental impacts on so many young children should be a top priority. Low-income families may be the last to recover from the recession. Moreover, the severity of the fiscal crisis in these states means that help for low-income families, across a range of human services, will be needed in 2011 and beyond.

Federal economic recovery funds are providing great help across a range of programs. For example, Arizona is using American Reinvestment and Recovery Act (ARRA) funds to maintain child care assistance for 15,000 children who would have otherwise fallen off the roles. Illinois will use ARRA funds to serve more children, reduce parent copayments, and extend job search eligibility so that children can remain in care while their parents look for employment. This assistance is vital for low-income families who are struggling in the economy and provides continuity that is so critical for young children.

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