For further information: Herwig Immervoll (Herwig.IMMERVOLL@oecd.org, +33 1 45 24 92 14); Daniele Pacifico (Daniele.PACIFICO@oecd.org, +33 1 45 24 76 85) JT03397415 Complete document available on OLIS in its original format This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
Poverty during childhood raises a number of policy challenges. The earliest years are critical in terms of future cognitive and emotional development and early health outcomes, and have long-lasting consequences on future health. In this article child poverty in the United States is compared with a set of other developed countries. To the surprise of few, results show that child poverty is high in the United States. But why is poverty so much higher in the United States than in other rich nations? Among child poverty drivers, household composition and parent’s labor market participation matter a great deal. But these are not insurmountable problems. Many of these disadvantages can be overcome by appropriate public policies. For example, single mothers have a very high probability of poverty in the United States, but this is not the case in other countries where the provision of work support increases mothers’ labor earnings and together with strong public cash support effectively reduces child poverty. In this article we focus on the role and design of public expenditure to understand the functioning of the different national systems and highlight ways for improvements to reduce child poverty in the United States. We compare relative child poverty in the United States with poverty in a set of selected countries. The takeaway is that the United States underinvests in its children and their families and in so doing this leads to high child poverty and poor health and educational outcomes. If a nation like the United States wants to decrease poverty and improve health and life chances for poor children, it must support parental employment and incomes, and invest in children’s futures as do other similar nations with less child poverty.
This article recalls the state of play of inequality levels and trends in OECD countries, with a special focus on Nordic countries. It sheds light on explaining the drivers of the rise in inequality and its economic consequences. It addresses in particular the issue of redistribution through taxes and transfers. It concludes with an overview of policy packages that should be considered to address the issue of rising inequalities.
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