By Dana Thomson, Child Trends, September 14, 2021
New poverty data released today (September 14) by the U.S. Census Bureau highlight the enormous success of government programs in protecting children from the economic fallout of the COVID-19 pandemic. Social safety net programs and federal relief efforts not only prevented additional children from falling into poverty but also reduced child poverty in the midst of the COVID-19 public health crisis and recession—despite the fact that the country reached its highest levels of unemployment (14.7% in April 2020) since the Great Depression (25.6%), and even exceeded unemployment during the Great Recession (10.0%).
Child poverty decreased by 2.9 percentage points, from 12.6 percent in 2019 to 9.7 percent in 2020, based on the Supplemental Poverty Measure (SPM). The SPM accounts for income support that households received in the form of stimulus payments, tax credits, and nutrition assistance. Stimulus payments and refundable tax credits (such as the Earned Income Tax Credit) accounted for the largest impact on child SPM rates in 2020. The first two rounds of stimulus payments prevented 4.5 percent of children from falling into poverty, holding everything else constant, while refundable tax credits prevented 3.8 percent of children from falling into poverty. In absolute numbers, stimulus payments alone kept 3.2 million children out of poverty in 2020, and tax credits alone kept 2.7 million children out of poverty in 2020. While there was likely considerable overlap in the number of children receiving both stimulus payments and refundable tax credits, these numbers speak to the power of each policy to reduce child poverty.
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