The economic costs of childhood poverty in the United States

Abstract

This paper attempts to estimate the aggregate annual costs of child poverty to the US economy. It begins with a review of rigorous research studies that estimate the statistical association between children growing up in poverty and their earnings, propensity to commit crime, and quality of health later in life. We also review estimates of the costs that crime and poor health impose on the economy. Then we aggregate all of these average costs per poor child across the total number of children growing up in poverty in the United States to obtain our estimate of the aggregate costs of the conditions associated with childhood poverty to the US economy. Our results suggest that these costs total about $500 billion per year, or the equivalent of nearly 4% of gross domestic product (GDP). More specifically, we estimate that childhood poverty each year: (1) reduces productivity and economic output by an amount equal to 1.3% of GDP, (2) raises the costs of crime by 1.3% of GDP, and (3) raises health expenditures and reduces the value of health by 1.2% of GDP.

Poverty and Child Health in the United States

“…6 The economic cost of child poverty to society can be estimated by anticipating future lost productivity and increased social expenditure. A study compiled before 2008 projected a total cost of approximately $500 billion each year through decreased productivity and increased costs of crime and health care, 7 nearly 4% of the gross domestic product. Other studies of "opportunity youth, " young people 16 to 24 years of age who are neither employed nor in school, derived similar results, generating cohort aggregate lifetime costs in the trillions.…”

A Philosophical Examination of Social Justice and Child Poverty

“…However, we still hold that it is valuable to take the breadth and depth of an injustice into account in order to prioritize it. We also acknowledge that it is possible to reach this same conclusion from many different perspectives; for example, on the basis of the costs that child poverty creates for society, which has been estimated in the USA to be as high as 500 billion dollars each year (Holzer et al 2008). …”

Childhood Poverty

“…Ultimately, child poverty affects all communities directly through the harms to impoverished individuals and indirectly through spillover effects that carry through society in the form of untapped human capital and hamstrung collective economic productivity. 20,21 One way or another, child poverty affects us all.…”