Losing ground: The Persistent declining economic fortunes of children

The primary purpose of this study is to investigate trends in the income status of children, as compared to that of adults and elderly people, from 1991 through 2005. Using the March 1992, 1999, and 2006 Current Population Surveys (CPS), this study examines income distributions of children relative to adults and elderly people at three stages: pre-transfer income, pre-transfer income plus social insurance benefits, and pre-transfer income plus social insurance benefits plus welfare payments. While children as well as adults and elderly people lost economic ground at the post-transfer income stage from 1991 to 2005, the losses experienced by children surpassed those of adults and elderly people. This occurred despite the fact that income growth among children was greater than that of adults and elderly people at the pre-transfer stage - a demonstration of increases in employment income of their parents which coincided with the welfare reforms of 1996. This study also found that declines in the distributive effect of both social insurance benefits and welfare payments were greater for minority children. Policy implications are discussed.