^^^j\ United States

kjUkgrn Department of

^^^^ Agriculture

Economic

Research

Service

Rural

Development

Research

Report Number 82

The Economic

Weil-Being of

Nonmetro Children

Carolyn C. Rogers

-\

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The Economic Weil-Being of Nonmetro Children. By Carolyn C. Rogers.

Agriculture and Rural Economy Division, Economic Research Service, U.S.

Department of Agriculture. Rural Development Research Report No. 82.

Abstract

Twenty-four percent of children residing in nonmetro areas are in families below

the official poverty line, 12 percent are near poor (above the official poverty line,

but with family incomes less than 1-1/2 times the poverty level), and 64 percent

are in families of at least modest means (at least 1-1/2 times the official poverty

line). Children residing in metro areas are in a somewhat better financial

position, with 20 percent poor, less than 10 percent near poor, and almost 71

percent of at least modest means. Poverty rates for children in nonmetro areas

have historically been higher than rates for children in metro areas. Children in

mother-only families are more likely to be poor than are children in marriedcouple families. For example, 61 percent of nonmetro children living with a

single female householder are below the poverty level, but only 14 percent of

those living in married-couple families are below the poverty line. Other things

being equal, the strongest predictors of the economic status of children are

parental education, the number of siblings in the family, and family type (either

married-couple or mother-only family). Nonmetro residence increases the

likelihood that a child will live in a family below the official poverty line.

Keywords: Children, family structure, metro-nonmetro residence, economic wellbeing, poverty status.

Acknowledgements

The author thanks Linda L. Swanson, Calvin L. Beale, Suzanne M. Bianchi,

Robert A. Hoppe, and David A. McGranahan for their constructive comments

and review. Appreciation is also extended to Tawanta L. Brinson for preparing

the manuscript, Laarni Dacquel for preparing the tables for publication, and Teri

Thrash for editorial assistance.

1301 New York Avenue, NW.

Washington, DC 20005-4788 March 1991
Contents

Summary ...,.., = = ... = ..... = ,.. = . . ill

Introduction 1

Data and Methodology 2

Recent Trends ..,..,,,..,.. ..,....,.,..... 5

Family Living Arrangements 5

Urban-Rural Household Differences 6

Poverty Rates ........................................... 6

Poverty Status Differentials in 1987 .... . 10

Region ,...._........ 10

Migration 10

Tenure ...................... ............ 11

Family Composition ...................... ^ .,........ = ... . 11

Race ..........=........... ., .................. 11

Family Type ........,..._,........ ................. 12

Age of Parent ........................................... 13

Educational Attainment of Parent 14

Parental Occupation 16

Employment Status of Parent ............................... 16

Multivariate Analysis of the Determinants of Economic Well=Being .... 17

Receipt of Cash Assistance and Noncash Benefits ................. 22

Conclusions ...............,.....,..........,......,... = .. 26

References .............................................. 27

Appendix A: Definitions and Explanations ...................... 30

Appendix B: Poverty Status Tables by Residence, Race,

and Family Type ................................ 34

Appendix C: Multiple Classification Analysis Tables for Metro and

Nonmetro Children .............................. 38

Appendix D: Eligibility Criteria for Selected Noncash Benefits and Cash

Assistance Programs ............................. 42
Summaiy

Twenty-four percent of children residing in nonmetro areas are in families below

the official poverty line, 12 percent are near poor (above the official poverty line,

but with family incomes less than 1-1/2 times the poverty level), and 64 percent

are in families of at least modest means (at least 1-1/2 times the official poverty

line). Children residing in metro areas are in a somewhat better financial

position, with 20 percent poor, less than 10 percent near poor, and almost 71

percent of at least modest means.

Poverty rates for children in nonmetro areas have historically been higher than

rates for children in metro areas. Nonmetro poverty rates improved some in the

early 1970's, but the recessionary periods of the early 1980's contributed to higher

childhood poverty in that decade.

Children in mother-only families are more likely to be poor than are those in

married-couple families. For example, 61 percent of nonmetro children living

with a single female householder are below the official poverty level, but only 14

percent of those living in married-couple families are below the poverty line.

Other things being equal, the strongest predictors of the economic status of

children are parental education, the number of siblings in the family, and family

type (married-couple or mother-only family). Nonmetro residence increases the

likelihood that a child will live in a family below the official poverty line.

Similar proportions of metro and nonmetro children participate in the various

noncash benefits programs, with the exception of the food stamp program. A

higher proportion of nonmetro children received food stamps than did metro

children. About 43 percent of poor children, regardless of residence, received

assistance from the Aid to Families with Dependent Children (AFDC) program,

compared with 11 percent of all children.

This report analyzes the economic well-being of children living in families with at

least one parent present, by metro-nonmetro residence, using data from the

March supplement to the 1988 Current Population Survey.
The Economic Weil-Being of Nonmetro

Children

Carolyn C. Rogers*

Introduction

This report analyzes the economic well-being of

children living in families with at least one parent

present, comparing children in nonmetropolitan

(nonmetro) areas with those in metropolitan (metro)

areas.^ The primary source of data is the March 1988

income and demographic supplement to the Current

Population Survey (CPS). Several indicators of

economic well-being, including the poverty status of

the family, the ratio of family income to need, and the

receipt of both cash assistance and noncash benefits,

are examined. Demographic and family characteristics

of children, along with socioeconomic characteristics

of their parents, are analyzed to provide a

comprehensive profile of the various factors in the

family environment that influence the economic

realities children experience.

The economic well-being of children in nonmetro

America is an important issue for local community

planning and rural development policies, because

families are the building blocks of the community.

Conditions in the national economy, along with the

local economic situation, will affect family incomes

and the resources available to children growing up in

nonmetro areas. The 1980's were a time of stress for

rural economies (Deavers, 1989; Reid, 1988), The

persistence of higher childhood poverty in nonmetro

areas in the 1980's will undoubtedly affect the next

generation's plans about remaining in the community.

Public and private officials in local communities need

*Carolyn C. Rogers is a Demographer with the Agriculture and

Rural Economy Division, Economic Research Service, U.S.

Department of Agriculture.

^The concept of metro-nonmetro used in this report is not

synonomous with urban-rural. Metro is defined as a county or

counties consisting of a large population nucleus of 50,000 or more

inhabitants, together with adjacent communities that have a high

degree of economic and social integration with that nucleus.

Nonmetro refers to counties outside a metro area. Urban is defined

as a central city or core, together with contiguous closely settled

territory, that has a total population of at least 50,000. Rural is

defined as territory outside places of 2,500 or more inhabitants or

outside an urbanized area. See Appendix A for further explanation.

to consider the changing family environments of

children and their effects on current and future

poverty conditions. An understanding of how

resources and environment influence childhood

development and well-being is essential if public policy

action is to improve the condition of children and to

help them attain their potential.

This report addresses the following issues:

o How have the family living arrangements of children

changed between 1960 and 1988? Are metro and

nonmetro residential trends in family structure

following similar courses?

o What are the recent trends in childhood poverty by

residence, race, and family type?

o How do demographic, family, and socioeconomic

characteristics influence metro and nonmetro

poverty status differences?

o What determines the economic well-being of

children, as measured by the ratio of family

income to need? What role does metro or

nonmetro residence play in determining children's

relative economic well-being?

o Does the receipt of cash assistance and noncash

benefits vary by residence and poverty status?

This report is unique in that: (1) children are the unit

of analysis, (2) some married children under age 18

are included, (3) both poor children and near-poor

children are studied, and (4) more than one indicator

is used to measure economic well-being. The focus is

on children as the unit of analysis, with household,

family, and community regarded as influential factors.

The characteristics of the child's family and household

of residence are viewed as attributes of the child. This

approach is advantageous in that children can be

grouped by age, race, residence, or any other variable.

This cannot be done when the family is the unit of

analysis.
This study includes married children under age 18 who

are living with at least one adult relative, A young

couple with their child(ren) or a mother with her

child(ren) may be living in the parental home. Since

this group is not yet living independently, the

economic welfare of the family household directly

influences their own welfare. Studies that are

restricted to never-married children thus miss an

important subgroup of children.

This report studies both poor and near-poor children.

Children defined as poor have family incomes less

than 100 percent of the official poverty line, which for

a four-person family with two children under age 18 in

1987 was $11,519. The near poor are children with

family incomes between 100 percent and 149 percent

of the official poverty level. This group of children is

important in that their families are not well off, but

may be just enough above the official poverty line to

be denied certain types of cash assistance and noncash

benefits. Children with modest to high family incomes

are at a level at least 150 percent of the official

poverty line.

More than one measure of economic well-being is

examined to obtain a comprehensive picture of the

economic realities for children. Poverty status is

studied to assess need, and the income-needs ratio is

used to assess family income in relation to the poverty

threshold and to examine a broader range of economic

levels for children. The receipt of cash assistance and

noncash benefits gauges whether or not participation

in such programs helps reduce need. This study takes

into consideration both family income level and the

resources of the household available to children.

Data and Methodology

Subsequent sections of this report are based on

data from the March 1988 income and demographic

supplement to the CPS. The March 1988 CPS

supplement provides a wealth of information on the

demographic and socioeconomic characteristics of

households and families, making it an excellent

resource for the study of family characteristics and

economic well-being of children under age 18.^

The study sample is composed of children under age

18 who lived in a family household with at least one

related adult present. The definition of related

children in the CPS includes own children and all

other children in the household that are related to the

householder by birth, marriage, or adoption.

The sample of children is restricted to those children

who live in a family, related subfamily, or unrelated

subfamily. Selected characteristics of the sample of

children are presented in tables 1 and 2.

Unrelated individuals under age 18 are excluded from

the sample for two reasons. First, data on their family

poverty status cannot be determined from the CPS.

The Census Bureau identifies children in poverty by

the poverty status of the child's family and excludes

unrelated children under age 15 from the definition of

poverty. Second, information on children's parents

and family composition are not available for unrelated

children in the CPS, resulting in the loss of key

variables in the analysis of the economic status of

children?

^e exclusion of unrelated individuals under age 18 deletes 293

cases from the sample, or a weighted estimate of 418,000 children.

This represents less than 0.7 percent of the total sample cases, and

such a loss of cases is assumed to not bias the results of this report.

Table l-Distribution of selected characteristics

of the sample of children by residence,

1988

Characteristics Metro Nonmetro

Percent^

Age:

Under 6 years 35.4 32,5

6-11 years 32.7 34.5

12-17 years 31.9 32.9

Race:

White 793 85.5

Black 16.4 12.0

Family status:

Family 93.9 95.0

Related subfamily 5.1 4.1

Unrelated subfamily 1.1 1.0

Family type:

Married couple 73.3 77.1

Female householder 23.6 20.0

Thousands

Population^ 48,086 14,922

^ee Apf^ndix A for a description of the CPS.

^Percentage of weighted population.

^Weighted. The number of cas^ in this study is 42,706; the

total weighted population estimate is 63,008,000 children.
Table 2--Distribution of selected characteristics of the sample of children, by residence and race, 1988

Characteristics White

Metro

Black

Nonmetro

White Black

Percent

Age of child:

Under 6 years

6-11 years

12-17 years

Family type:

Married couple

Female householder

Number of siblings:

None

One

Two

Three or more

Age(s) of siblings:

Some under 3 years

All 3-5 years

All 6-17 years

Number of earners:

None

One

Two

Three or more

Population^

35.6 34.2 32.4 32.5

32.6 33.2 34.5 34.6

31.8 32.6 33.1 32.9

79.5 40.8 82.6 40.6

17.4 55.7 14.6 56.5

24.4 24.1 22.8 20.5

40.9 30.5 41.0 27.2

21.7 24.0 23.8 21.3

13.0 21.4 12.4 30.9

31,4 35.8 28.3 33.4

21.4 21.2 21.0 21.6

47.2 43.1 50.7 44.9

6.6 26.0 6,0 28.3

33.0 37.2 31.2 37.4

46.0 29.7 48.8 28.3

14.4 7.1 14.0 6.0

Thousands

38,125 7,907 12,757 1,787

Weighted. The population estimates by residence and race do not add up to the total weighted estimate of 63,008,000

children because children of other races are excluded in this table.

The social and economic characteristics of children's

parents are important influences on the family

environment and well-being of children (table 3). To

gauge the effects of parental characteristics on

children's poverty status and economic well-being, the

data on the parent record in the CPS file was assigned

to the child's record, which already contained basic

demographic, family, and household data. The

variable for parent line number from the March 1988

CPS public use file was unedited and not useable. A

method to link parent records to child records was

devised by selecting the household reference person

for each type of family and subfamily. Next, the

reference person was linked to his or her children by

matching household sequence and family sequence

numbers, and family and subfamily numbers. After

matching parents and children, the values of the

parental characteristics were assigned to each child in

the family. In the absence of a variable in the CPS file

to link parent line numbers to their children, the

above procedure appears to have satisfactorily solved

the matching problem/

In 23,752 cases, reference persons were identified and matched

with children. More than two-thirds (71 percent) of the reference

persons were male. Most were in the main family (93 percent), with

6 percent in related subfamilies and 1 percent in unrelated

subfamilies.
Table 3-Distribution of selected characteristics of parents^ by residence and race, 1988

Metro Nonmetro

Characteristics White Black White Black

Percent

Age of parent:

18-24 years 4.7 10.5 5.1 12.3

25-29 years 13.7 18.8 14.5 19.4

30-34 years 22,6 23.8 23.3 22.8

35-39 years 24.4 20.2 25.1 15.7

40-49 years 27.6 15,9 25.4 17.9

50-59 years 5.1 6.0 5.0 6.3

60 years and older 1.4 2.8 1.3 4.4

Educational attainment:

Elementary school 8.1 8.0 7.5 18.4

High school, 1-3 years 10.3 21.1 12.2 27.2

High school, 4 years 36.3 42.5 45.9 42.3

College

1-3 years 19.2 17.0 18.0 8.0

4 years 13.4 5,6 8.2 1.8

5 or more years 12.3 3.7 7.8 .9

Occupation:

Managerial and professional

specialty 26.2 9.8 17.9 3.2

Technical, sales, and

administrative support 20.6 16,8 15.1 8.4

Service 7.5 15.7 7.0 13.3

Farming, forestry, and

fishing 1.9 A 7.7 3.2

Precision production,

craft, and repair 17.3 7.5 21.3 9.3

Operators, fabricators,

and laborers 14.6 14.7 20.8 26.4

Labor force status:

Employed 83.6 573 82.8 52.3

Nonagricultural 82.2 57.4 76.1 50.1

Agricultural 1.4 A 6.7 2.2

Unemployed 3.3 8.4 6.1 14.4

Not in labor force 10.8 29.7 9.4 31.1

Employment:

Full-time 78.5 51.4 77.1 43.3

Part-time 5.1 6.1 5.7 9.0

Thousands

Population^ 38,125 7,907 12,757 1,787

^Weighted. The population estimates by residence and race do not add up lo the total weighted estimate of 63,008,000

children because children of other races are excluded in this table.
Poverty status is determined by the poverty index,

which provides a range of money income cutoffs or

thresholds adjusted to take into account family size,

number of children, and age of the family householder.

Total family income is tested against the appropriate

poverty threshold, or level of minimum income need,

to determine the poverty level of the family. If total

family income is less than the corresponding threshold,

the family is classified below the poverty level. The

poverty rate is the percentage of persons with family

incomes below the poverty line. All relatives-primaiy

families and unrelated subfamilies-are treated as a

unit in defining poverty status; unrelated children

under age 15 are excluded from the definition.

Some pooling of resources is assumed to occur

among two related families in the same household.

Hence, it is preferable to treat related subfamilies

along with the main family in determining poverty

status. A lag program that attached the poverty status

of the main family to that of the related subfamily was

used to adjust the poverty status variable in the CPS

public use file.^

Recent Trends

Significant changes have occurred in the structure and

function of American families in society in the past

25-30 years (Bianchi and McArthur, 1989; Bumpass,

1984; Cherlin, 1981; Zill and Rogers, 1988). These

new realities of family life raise concern about the

effects of family circumstances on the well-being and

development of today's children.

Family Living Arrangements

Today, more children can expect to live in a singleparent household at some point in their lives due to

increased marital separation, divorce, and out-ofwedlock childbearing (Ross and Sawhill, 1975;

Masnick and Bane, 1980; Smith, 1989). More

mothers, including those with young children, are now

employed outside the home. Hernandez (1989)

identified three of the most important changes in

family life that are influencing the lives of children

today as: (1) changes in the parental family as the

The Census Bureau estimated that 19 percent of the metro

population and 23.1 percent of the nonmetro population were poor

in 1987. Estimates of poverty from the public use tape with the lag

program show 19.6 percent poor in metro areas (compared with an

estimated 21.3 percent poor without the lag program) and 23.8

percent poor in nonmetro areas (compared with 24.7 percent poor

without the lag program). Not attaching the poverty status of the

main family to the subfamily artificially inflated the poverty rate.

primary source of adult nurturance; (2) changes in the

availability of parents, grandparents, and other adult

relatives as potential child-care providers in children's

homes; and (3) changes in the adequacy of family

economic resources. These changes in the family

experience of American children will affect the ftiture

of Americans next generation.

While some of the new realities of American family

life are positive for children and their parents (for

example, smaller families), other family changes are

negative (Zill and Rogers, 1988). Some of the trends

in family life have negative effects for children, such as

an increasing number of single-parent families and

persistently high childhood poverty (Bauer, 1986;

Congressional Budget Office, 1985; Congressional

Research Service, 1986; Edelman, 1987; Masnick,

1986). Samuel Preston (1984) summed up the relative

economic status of dependents in American society in

this way, "...conditions have deteriorated for children

and improved dramatically for the elderly."

Changes in the family circumstances of children have

an important bearing on children's welfare. In 1988,

more than 14 million children (23 percent) were living

with only their mothers. Children growing up in

mother-only households face greater economic

disadvantages; for example, their mothers are more

likely to have less education, lower income, and higher

unemployment (Bauer, 1986; Congressional Research

Service, 1986; Masnick, 1986; Masnick and Bane, 1980;

Zill and Rogers, 1988). Moreover, many of these

children lack contact or support from their absent

fathers and often depend on government assistance

(Ruggles and Williams, 1987). Changing patterns of

marriage and divorce, fertility, and child custody are

primary factors in the decrease of married-couple

families and the increase of single-parent households.

Figure 1 shows a steady increase, between 1960 and

1988, in the percentage of children not living with

both parents. Although media attention has focused

on the breakdown of the family in the inner cities, the

percentage of nonmetro children not living with both

parents nearly doubled, rising from 14 percent in 1960

to 25 percent in 1988 (fig. 1). The percentage for

metro children more than doubled over the 29-year

period, increasing from 13 percent in 1960 to 29

percent in 1988. In both 1960 and 1970, the

percentages of children in metro and nonmetro areas

not living with both parents were similar. The

residential gap in family living arrangements widened

in the 1970's, with a greater increase in single-parent

families in metro areas. By 1988, the gap had lessened
Figure 1

U.S. children not living with both parents,

1960-88

Percent

Sources: David A. McGranahan. John C. Hession, Fred K. Hnes. and Max Jordaa

Sociai and ECOTIOTWC Characteristics of the Population h Metro and Nonrr^etro

Counties. 1970-8Q. RDRR-58. U.S. Dept. Agr.. Econ. Res. Serv, Sept 1986:

March 1988 Current Popuiation Survey, pubiic use file.

somewhat, with 29 percent of metro children and 25

percent of nonmetro children not living with both

parents. These figures suggest that some convergence

had occurred in residential patterns of family living

arrangements by the late 1980's, As with many social

trends, changes in nonmetro family patterns appear to

closely parallel, but lag somewhat, the changes

experienced in metro areas.

Urban-Rural Household Differences

Urban and rural areas have traditionally differed in

their patterns of household size, growth, and structure.

In recent years, metro and nonmetro family structure

and living arrangements have converged substantially,

though the rural-urban components of metro and

nonmetro areas have remained distinct (Fuguitt,

Brown, and Beale, 1989; McGranahan and others,

1986).^ Rural areas, regardless of metro or nonmetro

county location, continue to have a higher proportion

of married-couple households with minor children

than do urban areas, a smaller percentage of singleparent families, and a much lower percentage of

persons living alone. Some factors associated with

rural living include more traditional attitudes about

families, higher fertility, larger households, marriage at

earlier ages, outmigration of couples of childbearing

age, and economic dependence on farming and

extractive industries.

The prevailing opinion among family scholars is that

changes in the lifestyle of rural families since the

1970's have paralleled changes in urban families, with

increased rates of divorce, decreased fertility rates,

increased numbers of women working outside the

home, and growing diversity in employment (Coward,

1980; Coward and Smith, 1981; Fuguitt, Brown, and

Beale, 1989). Although rural families have become

more like urban families, the urban-rural distinction

persists, due to more traditional rural attitudes toward

marital stability, premarital sex, and the labor force

participation of women. The rural component in

nonmetro areas (62 percent) is larger than that in

metro areas (14 percent), and has a much greater

effect on nonmetro family living arrangements and

household structure than on metro family

circumstances. Nonmetro areas are thus more heavily

influenced by rural family structure and more

traditional attitudes toward the family. The economic

and institutional structure, along with geographic

isolation and small community size, are associated

with the remaining residential differences.

Nonmetro America experienced renewed growth in the

1970's: employment opportunities expanded, the longtime trend of nonmetro outmigration reversed, and

technological advances (especially in communications)

transformed rural life. Despite such progress,

nonmetro America continues to lag metro America in

income and many other measures of social and

economic well-being. The nonmetro unemployment

rate, for example, rose above that of metro areas

during the 1980's (Brown and Deavers, 1988).

Furthermore, nonmetro poverty remains a problem of

major dimensions (Deavers, 1989; Hoppe, 1989; Ross

and Morrissey, 1987).

Poverty Rates

Family economic well-being consists of both money

income and assets. The official poverty definition in

the CPS, however, does not include family assets. An

alternative poverty measure, which includes both

income and personal wealth (consisting of the value of

property plus financial assets minus debts), identified

as poor nearly 90 percent of those considered poor

under the official poverty definition used in this report

(Lerman and Mikesell, 1989).^

The poor are defined as those whose total economic

resources are inadequate to meet a minimal living

^ee Appendix A for an explanation of urban and rural.

The alternative poverty measure yielded no net change in rural or

urban poverty rates, although the makeup of the rural poor changed,

with more persons under age 45, more renters, more unemployed

persons, and more members of large families.
Standard. Poverty status is determined by comparing

total family income to a poverty threshold, adjusted

according to family size, number of children, and age

of the family householder. The determination of

money income level does not consider family size;

thus, poverty status provides a more complete measure

of the economic standing of a household.

The official poverty measure used in this report does

not adjust for differences in the cost of living.

Factoring out any systematic metro and nonmetro

differences in the cost of living is difficult. Lack

of an accurate method of adjusting for cost-of-living

differences by geographic area could introduce more

error into the measure.^ In any event, current poverty

measures adequately illuminate the problem of

childhood poverty, especially in nonmetro areas.

Children's economic well-being is dependent on both

their parents' incomes and family structure, with

mother-only families at an economic disadvantage. In

1980, 13 percent of all families with children were

poor and 40 percent of mother-only families were

poor (McGranahan and others, 1986). The incidence

of poverty among children in mother-only families is

more than double that for all families. In 1987, 52

percent of metro children in mother-only families were

poor, compared with 61 percent of their nonmetro

counterparts. Childhood poverty can be expected to

remain high in the long run, due to the trend of

increasing proportions of children living in motheronly families (McGranahan, 1985).

In 1987, the proportion of children below the official

poverty line (21 percent) was higher than the

proportion of the general population in poverty (14

percent). A larger share of nonmetro children are

poor than are metro children; in 1987, 24 percent of

nonmetro children were in families below the poverty

line, compared with 20 percent of their metro

counterparts. Today, childhood poverty remains

relatively high and efforts are still needed to reduce

poverty.

Poverty rates for children in nonmetro areas have

historically been higher than poverty rates for children

in metro areas (Hoppe, 1989; McGranahan, 1985).

The economic well-being of children in nonmetro

areas improved in the early 1970's, when the metro

and nonmetro poverty rates for children began to

converge. This was due, in part, to improved

opportunities in nonmetro areas (a period of peak

nonmetro growth), and, in part, to the greater increase

in mother-only families with children in metro areas

(McGranahan and others, 1986). In the late 1970's,

however, the residential gap in poverty widened, and

higher poverty rates were experienced in both metro

and nonmetro areas.

The economic well-being of children improved during

the 1960's, coinciding with the introduction of several

noncash benefit programs, such as food stamps. Aid to

Families with Dependent Children (AFDC), and other

welfare programs that provided additional assistance

to needy children.^ During the late 1970's, the

economic well-being of children began to deteriorate,

only partially recovering in the late 1980's (Zill and

Rogers, 1988). Poverty rates increased sharply in both

metro and nonmetro areas in the mid-1970's; after

1983, metro poverty rates declined somewhat, but

nonmetro rates have remained high (Hoppe, 1989).

Many factors are involved in the high poverty rates

among children. Childhood poverty can result from

the reduced earnings of mothers as they adjust their

labor force participation to accommodate the presence

of children; the assumption of greater household needs

when children are present; and the explicit raising of

the poverty threshold as family size increases, with

fewer per-child resources available in larger families

(Smith, 1989). Also, the persistence of high childhood

poverty rates is due, in part, to AFDC benefits not

being indexed for inflation. Deavers and Hoppe

(1991) found a median decline in real AFDC benefits

of 37 percent for a family of three from 1970 to 1989.

The percentage of poverty among nonmetro children

in all families between 1970 and 1987 was consistently

higher than that among metro children (fig. 2).^^ The

poverty rate for all children in metro areas increased

from 12 percent in 1970 to a high of 21 percent in

1983, and has remained about 19 percent. In contrast,

**In a 1981 survey of Wisconsin households, Ghelfi (1988) found

that: (1) spending for essential purchases, such as food, clothing,

housing, utilities, transportation, and medical care, was about the

same for metro and nonmetro residents, implying that prices do not

differ much between the two residential areas; and (2) average

housing costs for monthly mortgage payments showed little rural or

urban difference.

noncash or in-kind benefits, however, are not included as income,

and thus do not reduce the official poverty rates.

^^^e latest year for which data are available is 1987; data on

employment and income from the 1988 Current Population Survey

(CPS) refer to 1987. For historical trends by residence, note that no

residential poverty data were released for 1984 due to the mixed

1970 and 1980 sampling frame used in the 1985 CPS. The 1984

estimates of poverty in this report for metro and nonmetro areas are

averages of 1983 and 1985 data. Figures from the CPS in the early

1980's and throughout most of the 1970's refer to metro areas as

defined in the 1970 Census. There are important differences in the

population classified as metro using the 1970 and 1984 definitions,

and these differences must be acknowledged when presenting timeseries data.
the poverty rate for children in nonmetro areas

declined from 20 percent in 1970 to a low of 17

percent in the mid-1970's, before rising to between 20

percent and 25 percent in 1982-87. The residential

gap in poverty diminished somewhat during the 1970's;

however, poverty rates have increased for both

residential areas since 1978. By 1987, the nonmetro

poverty rate for children was 24 percent and the metro

poverty rate was 20 percent.

Figure 2 illustrates the much greater incidence of

poverty for children in mother-only families, which is

more than double the childhood poverty rate for all

families. The poverty level for nonmetro children in

mother-only families was higher than that for metro

children in mother-only families throughout the

period, except in the early 1970's, when residential

poverty rates converged. Childhood poverty in

mother-only families in metro areas ranged from 49

percent to 52 percent in the 1970's, climbing slightly

higher to about 52-55 percent in the 1980's. The

nonmetro poverty rate declined from 62 percent in

1970 to a low of 51 percent in the mid-1970*s, but

increased since 1978 to again reach its previous high

of 62 percent in the late 1980*s. The poverty rates in

figure 2 illustrate the economic disadvantages that

children in mother-only families face. Despite

economic recovery in the 1980's, childhood poverty is

expected to remain high in the long run, due to the

trend of increasing proportions of children living in

mother-only families (McGranahan, 1985). The

number of mother-only families in poverty increased

from 2.45 million in 1979 to 3.54 million in 1987,

accounting for almost 1.1 million of the 1.37-million

increase in the number of U.S. mother-only families

(U.S. House of Representatives, 1989).

Race had a greater influence on childhood poverty

between 1970 and 1987 than did residence, with a

larger proportion of black children than white children

in all families below the poverty level, regardless of

residence (fig. 3). The poverty rate for metro black

children increased during the 1970's, from 33 percent

in 1970 to 40 percent by 1980. Throughout the 1980's,

the poverty rate for black children in metro areas

remained above 40 percent. Poverty rates for

nonmetro black children were consistently higher than

those for their metro counterparts during 1970-87.

The poverty rate declined for nonmetro black children

from 61 percent in 1970 to a low of 45 percent in

1978. However, in the 1980's, the poverty rate for

nonmetro black children once again climbed above 50

percent, reaching 57 percent in 1987.

Of all children in single-parent families headed by a

female, black children in nonmetro areas are the most

economically disadvantaged group over time, with

poverty rates hovering around 75 percent since 1973

(fig. 4). Metro black children follow, with poverty

rates around 65 percent since the early 1970's.

Although the proportion of children in mother-only

families is much higher for blacks than for whites, this

is only one factor in the higher poverty rates for black

Figure 2

U.S. children below poverty level, by family

type and residence, 1970-87^

Percent

75

50

25

Nonmetro Female householder

Metro

J L ill \ Ï I I Í I i I

1970 75 80 85

1/ Related children under age 18. Data for 1984 were interpolated.

Sources' Bureau of the Certsus. 'Money Income arid Poverty Status

in the United States.' Current Population Reports. Series P-60, various issues.

U.S. Dept. of Connmerce.: March 1888 Current Poputation Survey, public use file.

Fl^re 3

U.S. children below poverty level, by race

and residence, 1970-87^

Percent

100

80

60

40

20 -

.o.-*

Metro

White

1970 75 80 85

1/ Related children under age 18. Data for "084 were interpolated.

Sources: Bi^au of the Census. "Money Income and Poverty Status

In the United States.' Current Poputation Reports. S^ies P-60. various tesues.

U.S. Dept. of Commerce.; March 1988 Current Population Survey, public use file.
Figure 4

U.S. children in mother-only families below

poverty level, by race and residence, 1970-87^

Percent

100

80 -

60 -

40

20 -

1970 75 80 85

1/ Related children under age 18. Data for "©84 were interpolated.

Sources: Bureau of the Census. 'Money Inconne and Poverty Status

in the United States," Current Population Reports. Series P-60. various Issues.

U.S. Dept. of Commerce.: March 1988 Current Population Survey, public use file.

children. White children in mother-only families,

regardless of residence, fared better financially than

their black counterparts, even though poverty

conditions for white children did not improve

significantly over the time period. In fact, white

children in both areas living in mother-only families

were slightly worse off in 1987 than they were in 1970.

The recessions of the early 1980's pushed poverty rates

up, and the slower economic recovery and lower

employment performance in nonmetro areas delayed

improvement in poverty conditions (Hoppe, 1989;

Reid, 1988). The increase in poverty rates from 1979

to 1983 has been attributed to three main factors:

(1) prices increased more rapidly than income in the

late 1970's and early 1980's, and poverty thresholds

(adjusted for inflation) increased just as rapidly as

prices, causing persons with incomes marginally above

the poverty threshold to fall into poverty if their

income grew slower than the poverty threshold; (2)

the economic downturns from 1980 to 1982 reduced

the earnings of some persons to below the poverty

threshold; and (3) stricter eligibility requirements

disqualified some persons from receiving welfare

benefits and reduced the amounts others received

(Hoppe, 1989).

Changes in the metro and nonmetro designations used

by the Census Bureau since 1984 have also contributed

to the high nonmetro poverty rates of 1983-87. Metro

and nonmetro designations are revised periodically to

reflect the increasing urbanization of the Nation. The

recent change decreased the nonmetro population by

about 28 percent. Because nonmetro areas reclassified

as metro were more likely to be in a better financial

position than other nonmetro areas, this

reclassification tended to raise the poverty rates of the

areas that remained nonmetro (Hoppe, 1989).

Despite the changes in the metro and nonmetro

designations, economic conditions in nonmetro areas

have generally fallen behind economic conditions in

metro areas.

Figures 2-4 underscore the persistence of childhood

poverty and the importance of family structure, race,

and residential differences over time. A consistently

higher level of childhood poverty has been found

among those who live in nonmetro areas. The modest

improvement in poverty rates in nonmetro areas in the

1970's was a brief respite in the overall trend of

deteriorating economic conditions for children. The

type of family in which a child resides exerts an even

stronger influence on poverty than does residence. In

the 197Ü's, changes in family circumstances-most

notably shifts toward mother-only families and greater

labor force participation by mothers-had a stronger

effect on the economic well-being of children than did

changes in the economy (Hifl, 1983). The joint effects

of race and family type result in an especially

disadvantageous economic situation for black children

in families headed by women.

Based on current trends, an estimated 70 percent of

white children and 94 percent of black children born

in 1980 will spend part of their childhood in a singleparent family before reaching age 18 (Garfinkel and

McLanahan, 1986). With the increasing probability of

children living in single-parent families headed by

women, poverty rates are expected to remain high

(Edelman, 1987; Masnick, 1986; McGranahan, 1985;

and Preston, 1984).

Some children experience poverty for temporary

periods in their lives due to job loss of their parent(s)

or some other employment-related condition.

However, 38 percent of metro and 43 percent of

nonmetro poor children are persistently poor or

trapped in poverty (Ross and Morrissey, 1989). The

persistently poor consist of those with family incomes

below the poverty level for 3 or more years. Among

poor children in mother-only families, 80 percent of

nonmetro children were persistently poor, compared

with 47 percent of their metro counterparts (Ross and

Morrissey, 1989). The characteristics of children that

increase their probability of being poor or near poor

are similar to those of the persistently poor. These
characteristics include living in a mother-only family,

being black, having less than a high school education,

relying heavily on public assistance for income, and

having low levels of labor force participation. Ross

and Morrissey (1989) also found that only a small

proportion of nonmetro mother-only families had five

or more persons, and half of nonmetro persistently

poor children lived in families of five or more persons.

This suggests that nonmetro persistently poor children

may be concentrated in relatively few but large

families. Trends in childhood poverty since 1970 raise

concern about whether or not the high levels of

childhood poverty will continue through the end of the

century.

Poverty Status Differentials in 1987

The proportion of nonmetro children who were poor

was higher than that for metro children in 1987

(fig. 5). Nearly 24 percent of all nonmetro children

were in families below the poverty level, compared

with almost 20 percent of their metro counterparts.

In addition, 12.4 percent of nonmetro children were

classified as near poor, or in families with total

incomes 100-149 percent of the official poverty level,

compared with 9.5 percent of metro children defined

as near poor. The financial standing of the near poor

is precarious at best, with family incomes only

marginally above the official poverty line. However,

their family incomes may be enough above the poverty

level to disqualify them from receiving certain types of

public assistance or means-tested noncash benefits,

such as food stamps, free or reduced-price lunches,

public or subsidized housing, and Medicaid health

insurance. Thirty-six percent of nonmetro children

were poor or near poor, compared with 29 percent of

metro children.

Region

Poverty is a problem for the South in general, with

nearly 31 percent of nonmetro children in poverty in

the South (fig. 6). This proportion is more than

double the 14-percent poverty rate for nonmetro

children in the Northeast, the region with the lowest

poverty rate. Among metro children, the South also

had the highest poverty rate (21.5 percent) of all

regions. When all children on the edge of poverty are

taken into account-both poor and near-poor children

-there are marked differences by metro and nonmetro

residence in the South and the West. In the South, 42

percent of nonmetro children are either below or near

the poverty level, compared with 32 percent of their

metro counterparts. A similar pattern is found in the

West, where 39 percent of nonmetro children are poor

or near-poor, compared with 30 percent of metro

children.

Migration

Poverty rates are higher for nonmetro children

regardless of migration status, or whether the child's

Figure 5

Poverty Status of U.S. children, 1987

Metro children

Near poor^

Below poverty

Nonmetro children

1/ Incomes 100-149 percent of the poverty level 2/ Incomes at least 150 percent of the poverty level.

Source: March 1988 Current Population Survey, public use fite.

10
Figure 6

Poverty status of U.S. children,

by region, 1987

Northeast

Metro

Nonmetro

17.7

14.1

7^1 Poor

^Near poor^

poverty line. A higher proportion of nonmetro

children are in families that own their own home (68

percent) than are their metro counterparts (62

percent). Without this advantage, the economic

disparity by residence would most likely be even

greater. The higher proportion of homeowners in

nonmetro areas partially offsets the lower total wealth

in nonmetro areas.

Midwest

South

West

Metro

Nonmetro

Metro

Nonmetro

Metro

Nonmetro

19.7

17.8 ^12.4?

21.5 W9M

30.6 ^18^

18.8 ^lOgl

23.3 ^15¡^^

X J_ J_

10 20 30

Percent

40 50

1/ incomes 100-149 percent of the poverty level.

Source: March 1988 Current Population Survey, public use fite.

family had changed residence between 1987 and 1988.

Migrants (one-fifth of all children) were more likely to

be poor than nonmigrants; among nonmigrant

families, 19 percent of nonmetro children and nearly

17 percent of metro children were poor. Among those

families moving into metro areas, no difference in

poverty status is found by place of origin; 29 percent

from nonmetro areas and nearly 30 percent from

metro areas were poor. However, families that

relocated to nonmetro areas were more likely to be

poor if they moved from another nonmetro area (40

percent) than from a metro area (35 percent). While

it is not known whether migrants were poor in the

place of origin or destination, it is likely that

economic factors entered into the decision of some to

relocate. In brief, children are more likely to be poor

among migrants, among those moving into nonmetro

areas, and among nonmetro migrants to nonmetro

destinations.

Tenure

The financial position of children in homeowner

families is considerably better than that of renters.

Poverty is lowest among those families who own their

own homes in both residential areas, with nonmetro

poverty being higher (13 percent) than metro poverty

(7 percent). A higher proportion of renters were

poor, with 45 percent of nonmetro children and 40

percent of metro children in families below the

Family Composition

Being in a family below the poverty level is more

common for younger children and children in families

with younger siblings (table 4). The highest poverty

rates are found among children under age 6,

significantly different from the rates for children aged

12-17 in both metro and nonmetro areas. In

nonmetro areas, a significant difference in poverty

rates is also found between children under age 6 and

those aged 6-11.

Children in families with one or more siblings have a

greater probability of being poor, with the proportion

in poverty increasing incrementally with the addition

of each child (table 4). Children in families with four

or more siblings are likely to be economically

disadvantaged, with 53 percent of nonmetro children

and 47 percent of metro children in such families

below the poverty line.

Children in families with no earners or only one

earner are more likely to be poor than are those in

families with at least two earners. Eighty-four percent

of children in families with no earners, regardless of

residence, are apt to be poor. The greater the number

of adults in the family, the greater the probability is of

having more earners and a better economic position.

Race

Research reveals that race affects a child's poverty

status, with the black poverty rate about three times

that of white children in both metro and nonmetro

areas. In nonmetro areas, nearly 59 percent of black

children are poor, compared with 19 percent of white

children. A higher proportion of whites (86 percent)

reside in nonmetro areas than in metro areas (79

percent).^^ Without this difference in racial

composition, the residential poverty gap would most

likely be larger. Black children residing in nonmetro

areas are more likely to face economic disadvantages,

especially those in families with children under age 6,

with three or more siblings, in mother-only families,

and in families with no earners.

^^See Appendix B for poverty differentials by race

and residence.

11
Table 4-Poverty status of children, by demographic and family characteristics, 1987

Selected characteristics

Total

Metro^

Below At or near Above

poverty poverty^ poverty"*

19.6 9.5 70.8

Percent

Nonmetro

Below

poverty

At or near

poverty^

Above

poverty"*

23.8 12.4 63.7

Age of child:

Under 6 years

6-11 years

12-17 years

Race:

White

Black

Family type:

Married couple

Spouse in labor force

Spouse not in labor

force

Female householder

Number of siblings:

None

One

Two

Three

Four or more

Age(s) of siblings:

Some under 3 years

All 3-5 years

All 6-17 years

21.8

20.1

16.8

14.6

43.2

9.0

4.8

15.9

52.4

13.6

13.9

23.6

34.2

47.3

24.6

22.0

15.1

9.9 68.4

10.0 69.8

8.7 74.6

8.8 76.6

13.0 43.8

8.6 82.4

6.3 88.9

12.3 71.8

12.4 3.S.2

7.4 79.1

8.0 78.2

11.1 65.3

12.6 53.2

18.9 33.8

11.3 64.1

9.6 68.5

8.4 76.5

28.3 12.4 59.3

23.5 12.4 64.1

19.7 12.5 67.8

18.5 12.5 68,9

58.6 11.3 30.0

14.0 12.2 73.7

9.0 9.2 81.8

22.2 17.3 60.6

60.9 13.3 25.8

18.6 10.1 71.3

17.1 11.7 71.2

27.0 13.8 59.2

39.3 16.7 44.0

52.9 13.6 33.4

31.5 13.1 55.3

26.5 12.2 61.3

18.2 12.1 69.7

Number of earners:

None

One

Two

Three or more

84.3

24.0

5.9

3.5

5.4

14.4

8.0

5.5

^Weighted population of 48,086,000,

Weighted population of 14,922,000.

^Incomes at 100-149 percent of the poverty level.

"^Incomes at 150 percent or more of the poverty level.

10.3

61.6

86.1

91.1

84.3 6.3 9.4

33.9 16.9 49.2

9.7 10.8 79.5

6.8 11.3 81.9

Black children in families with young children and in

large families often face economic hardships (fig. 7).

Regardless of residence, black children in families with

children under age 6 were more than twice as likely as

their white counterparts to be poor or near poor.

Similarly, black children in large families are at greater

risk of marginal economic conditions than are white

children. For example, among nonmetro children in

families with three or more siblings, 84 percent of

blacks are poor or near poor, compared with 51

percent of white children.

Family Type

The marked difference in the poverty status of

children by family type is evident from Appendix B,

12
Figure 7

Poverty status of U.S. children, by race and

other selected characteristics, 1987

Metro

Under age 6

White

Black

Nonmetro

White

Black

16.6 92

46.3 lié'M

22.1 m]

69.1 VW

Three or more siblings

White

Black

Poor

^Near poor^

Metro 31.6 ^441

58.6 ^iCii

Nonmetro White

Black

30.3 <20.3>

82.8

m X

M.3

J

20 40 60

Percent

80 100

1/ Inoomes 100-149 pereent of the poverty level.

Source: March 1898 Current Population Survey, public use Vue.

The highest poverty rates by marital status occur for

children living with a never-married parent. Sixty-six

percent of metro children and 72 percent of nonmetro

children in such family situations were poor. Poverty

was also high among children whose parents are

married, with a spouse absent. Fifty-five percent of

metro and 67 percent of nonmetro children in this

type of living arrangement were poor. This directly

contrasts with children living with a married parent

whose spouse is present; only 9 percent of metro

children and 14 percent of nonmetro children in such

two-parent families were below the poverty line.

For children in mother-only families, black children in

nonmetro areas have the greatest probability of being

poor (75 percent), followed by black metro children

(65 percent), white nonmetro children (53 percent),

and white metro children (44 percent). Although the

percentage of near-poor children is not statistically

different among the four race and residence subgroups

shown in figure 8, the near poor add substantiveiy to

the total proportion of children at risk of experiencing

adverse financial conditions.

tables 1-4. Regardless of residence, the highest

poverty rate is found among children living with

female householders, at 52 percent in metro areas and

61 percent in nonmetro areas. By comparison,

children in married-couple families are more

financially secure, with 9 percent of metro children

and 14 percent of nonmetro children in marriedcouple families in poverty. Among married-couple

families, higher proportions of poor and near-poor

children were found in families where one spouse is

not in the labor force. The slightly higher proportion

of married-couple families in nonmetro areas (77

percent) than in metro areas (73 percent) partially

offsets the lower total wealth in nonmetro areas and

reduces the residential gap in poverty.

Another way to view the effects of living in a motheronly family on economic welfare is to look at the

percentage of all poor children who live in such

families. Among those below the poverty level, 63

percent of metro children and 51 percent of nonmetro

children were in mother-only families.^^ Children fare

much better financially if they remain in stable,

married-couple families than if they experience the

loss of a parent, especially the father, from the

household (Bianchi and McArthur, 1989).

^^Unpublished data from the March 1988 CPS public use file.

The higher poverty that black children and those in

female-headed families experienced is partially

interrelated. In both metro and nonmetro areas, black

children are more likely than white children to be in

mother-only families. Although a larger share of

single-parent families is black, the number of singleparent families with children is higher for whites.

Black children, regardless of residence, are also more

likely to be in families at greater risk of poverty-for

example, families with more siblings and with no or

only one earner present. More than half of all

children living with only their mother were poor.

Age of Parent

Poverty was highest in both metro and nonmetro areas

for children whose parents were under age 25

(table 5). Forty-seven percent of metro and 53

percent of nonmetro children with parents aged 18-24

were below the poverty level. The lowest poverty rates

occur among children with parents aged 35-49, usually

considered the prime working years, when most adults

are established in their careers and in their peak

earning years. Even with a similar pattern of

poverty by parental age and family type, the level

of poverty in nonmetro areas remains higher than

that in metro areas.

13
Figure 8

Poverty status of U.S. children in mother-only families, by race and residence, 1987

Metro white Nonmetro white

Near poor^

Above povertyMetro black Nonmetro black

1/ Incomes 100-149 percent of the poverty level. 2/ Incomee at least 150 percent of the poverty level.

Source: March 1988 Current Population Survey, public use fie.

Educational Attainment of Parent

Advances in parental education, regardless of

residence, have improved the economic welfare of

their children. Parents of metro children are better

educated than their nonmetro counterparts, with 42

percent of metro parents having completed at least 1

year of college, compared with 31 percent of nonmetro

parents. Children in families with a parent who did

not complete high school were worse off economically

than children with highly educated parents. Half of

all children whose parents had not advanced past

elementary school were below the poverty line.

High school graduation is clearly associated with

improved financial well-being; 18 percent of metro

children and 22 percent of nonmetro children whose

parents graduated from high school were below the

poverty line. An age-interaction effect has taken

place. Younger parents are more likely to have

interrupted their high school or college educations

due to early childbearing. Alternatively, older parents

are less likely to have attained levels of education

comparable to their younger counterparts, as

evidenced by gains in adult educational attainment

over time.

The joint effects of parental education and family type

on childhood poverty, illustrated in figure 9, show that

children in mother-only families are about twice as

likely as children in married-couple families to be

poor or near poor, regardless of parental educational

level or residence. Among nonmetro children

whose parents had completed some high school, 85

percent in mother-only families and 45 percent in

married-couple families were at risk of adverse

economic conditions. While the economic picture

improves greatly for children whose parents had

completed some college, the incidence of poverty is

significantly higher for children in mother-only

families than for those in married-couple families.

For example, among nonmetro children, 31 percent in

mother-only families with 4 years of college and 11

percent in married-couple families were poor or near

poor. Educational attainment influences employment

prospects, with highly educated parents being more

marketable in the labor force and better able to

14
Table 5-Poverty status of children by selected social, economic, and demographic characteristics of their

parents, 1987

Selected characteristics

Metro Nonmetro^

Below

poverty

At or near

poverty^

Above

poverty'*

Below At or near Above

poverty poverty^ poverty"*

Percent

Total

Age:

18-24 years

25-29 years

30-34 years

35-39 years

40-49 years

50-59 years

60 years and older

Educational attainment:

Elementary school

High school, 1-3 years

High school, 4 years

College

1-3 years

4 years

5 or more years

19.6

47.2

29.1

20.1

16.1

10.2

15.1

34.1

49.7

45.6

18.3

10.4

3.3

2.9

9.5

14.1

13.4

9.8

9.0

6.5

8.8

13.6

16.8

13.7

11.3

8.0

3.7

2.2

70.8

38.7

57.5

70.1

74.9

83.3

76.2

52.3

33.5

40.7

70.4

81.6

93.1

94.9

23.8 12.4 63.7

53.3 16.6 30.1

34.3 13.3 52.5

24.5 13.0 62.6

16.5 11.7 71.8

14.6 10.8 74.6

25.4 13.5 61.1

36.6 15.9 47.5

50.8 17.8 31.5

40.1 15.0 44.9

22.3 14.0 63.7

15.2 9.4 75.5

4.2 8.5 87.2

3.8 3.2 93.0

Occupation:

Managerial and professional

specialty

Technical, sales, and

administrative support

Service

Farm, forestry, and

fishing

Precision production,

craft, and repair

Operators, fabricators,

and laborers

Labor force status:

Employed

Nonagricultural

Agricultural

Unemployed

Not in labor force

3.1

9.7

31.6

29.5

7.2

15.4

9.3

9.2

19.5

48.7

67.2

3.5 93.3

8,6 81.7

13.3 55.1

23.6 46.9

10.7 82.1

14.1 70.5

8.9 81.8

8.7 82.1

21.4 59.0

13.9 37.4

9.9 23.0

^Weighted population of 48,086,000.

^Weighted population of 14,922,000.

^Incomes at 100-149 percent of the poverty level.

''incomes at 150 percent or more of the poverty level.

4.8 6.2 88.9

13.4 10.4 76.2

41.4 18.5 40.0

30.7 2L7 47.6

11.0 12.7 76.3

18.9 13.4 67.7

13.6 12.3 74.1

12.4 11.4 76.2

28.5 23.0 48.5

55.6 12.5 31.9

69.5 12.2 18.3

15
Figure 9

Poverty status of U.S. children, by

family type and education of parent, 1987

High school. 1-3 years

Married couple

Mother only Metro

Nonmetro

Married couple

Mother only

21.0 i.i

75.8 m

28,5 Mé

72.9 12.1:

Metro

College, 4 years

Married couple

Mother only

Poor

^ Near poor''

13.9

2.3 3.5

5.1

Nonnnetro

Married couple

Mother only

3.7 7.6

10.; ^20.7

j_ _L

20 40 60

Percent

80 100

1/ Incomes 100-149 percent of the pov^ty tevei.

Source: March 1988 Current Populatbn Survey. fXJblic use file.

provide an economically secure environment for their

children than their less-educated counterparts.

Parental Occupation

Despite residential differences in occupational

structure, occupational differences in poverty status

are similar in metro and nonmetro areas. Metro

parents are more likely to hold managerial and

professional specialty positions (24 percent, versus 16

percent for nonmetro parents) as well as technicalsales-administrative support positions (20 percent,

versus 14 percent nonmetro). In addition, nonmetro

parents are more likely to be employed in precision

production, craft, and repair occupations (20 percent,

versus 15 percent metro); in farming, fishing, and

forestry (7 percent, versus 2 percent metro); and as

operators, fabricators, and laborers (21 percent, versus

15 percent metro).

The highest poverty rates occurred among parents

employed in service jobs or in farming, forestry, or

fishing occupations (table 5). Children whose parents

were employed in managerial and professional

specialty occupations experienced less poverty,

regardless of residence. Children with parents

employed in nonagricultural jobs were better off

financially than children whose parents worked in

agricultural pursuits. This reflects the effect of

nonmetro employment opportunities on childhood

poverty and well-being.

Employment Status of Parent

Children of employed parents have a clear financial

advantage. The highest poverty rates occur for

children whose parents are not in the labor force, with

two-thirds of all children in such families below the

poverty level in both metro and nonmetro areas

(table 5). Forty-nine percent of metro children and 56

percent of nonmetro children whose parents were

unemployed were below the poverty level. Moreover,

a greater share of nonmetro parents were unemployed

(7 percent) than were their metro counterparts

(4 percent).

Both unemployed parents and those not in the labor

force are without jobs. The proportion in poverty is

smaller among unemployed parents than among

parents not in the labor force, most likely due to

temporary joblessness. No residential difference is

found in the proportion of poor parents not in the

labor force; many in this group can best be described

as persistently poor, or trapped in poverty. As Ross

and Morrissey (1987) note, more than half of the

persistently poor were in families with no earners.

Among unemployed parents, poverty is more common

in nonmetro areas. Being temporarily poor in

nonmetro areas more often results from work-related

events, such as the loss of a job or lack of local

employment opportunities, than from personal events,

such as divorce (Ross and Morrissey, 1987). With

higher unemployment and underemployment in

nonmetro areas, many workers and their families may

experience periods of poverty.

Parents working fulltime fared better than their

counterparts who worked parttime. In nonmetro

areas, 11 percent of parents who worked fulltime and

45 percent of those working parttime were below the

poverty level. This comparison partly reflects local

area employment opportunities and conditions.

The financial standing of white children of

unemployed parents was significantly better than

that of their black counterparts. Figure 10 shows

the disadvantaged financial position of black children

whose parents are unemployed. For example, about

80 percent of black children with unemployed parents

were classified as poor or near poor, regardless of

residence. In contrast, 65 percent of nonmetro

white children and 54 percent of metro white

children with unemployed parents were near or below

16
Figure 10

Poverty status of U.S. children with

unemployed parents, by race and residence,

1987

Metro

White

B\mM

38.9

68.6

Poor

m Near poor'

Nonmetro

White

Black

50.0

73.0 5.6

_L _L

0 20 40 60

Percent

1/ Incofnes 100-149 percent of the poverty leveL

Source: March 1988 Curient Population Survey, public use fHe.

_J ¡

80 100

the poverty line. Moreover, parents of black children,

regardless of residential area, were more likely than

those of white children to be unemployed or not in

the labor force.

In sum, parents' characteristics affect the poverty

status of their children, regardless of residence. Older,

married, better educated, and employed parents are

more likely to provide a financially secure home

environment for their children. Metro parents tend to

be better educated and to be employed in managerial

and professional specialty positions. The basic

difference between metro and nonmetro labor markets

is operative, with a greater proportion of higher paid

occupations and highly educated workers in the metro

labor market. These r^idential differences in parental

education and emplo)mient status contribute to an

increased risk for nonmetro children of being poor or

near poor. With the increased education of parents

and more mothers working for pay outside the home

(U.S. Department of Labor, Bureau of Labor

Statistics, 1985; Zill and Rogers, 1988), economic

conditions for at least some children may improve.

Multivariate Analysis of the Determinants of

Economic Well-Being

Because of persistent metro-nonmetro poverty

differentials, this report uses multivariate analysis

techniques to systematically assess the determinants of

the economic well-being of children. The central

question is, "What is the relative contribution of a set

of demographic and socioeconomic factors to the

economic welfare of children?" This analysis will show

whether residence, in and of itself, results in higher

poverty for children in nonmetro areas, or whether

children in families with certain demographic

and parental characteristics leading to lower economic

status are more concentrated in nonmetro areas.

The previous section highlighted characteristics that

increase a child's risk of being in a family that is poor

or near poor, but most children do not live in such

families. Seventy-one percent of metro children and

64 percent of nonmetro children are in families of at

least modest means (at least 150 percent above the

poverty level). This section aims to determine what

factors influence the economic well-being for children

across a broad spectrum of economic levels, not just

the factors that predispose children to poverty or

adverse economic conditions.

Analysis of variance is the appropriate statistical

method for this study, since the dependent variable is

measured on an interval level, and the independent

variables are measured on a categorical level. Analysis

of variance decomposes the variance in the dependent

variable, here, the income-needs ratio, into the portion

due to the independent variables and that portion not

accounted for by the independent variables. The

individual contribution of each independent variable

to the mean score of the dependent variable (grand

mean) can be assessed while holding constant the

effects of the remaining independent variables. Thus,

the effect of a specific variable or set of variables on

the economic status of children can be evaluated,

while controlling for other confounding factors.

The indicator of economic well-being, or the

dependent variable, chosen will make a difference in

the findings. This study uses the income-needs ratio

to measure economic well-being. The income-needs

ratio, unlike household income, is determined by

comparing total family income to a poverty threshold

(the denominator of the ratio), adjusted to consider

family size, number of children, and age of the family

householder. The income-needs ratio was selected

over household income as a measure of economic

well-being because it provides a more complete

assessment of the household's economic status. The

income-needs ratio represents the mean score of each

of 14 income intervals, ranging from 0.25 to 8.44; a

value of 1 is equal to the poverty cutoff. For example,

a mean value or score of 1.50 on the dependent

variable is 1-1/2 times the poverty level, and a score of

2 is twice the poverty level.

17
Analysis of variance produces a multiple classification

analysis (MCA) table, which shows the pattern of the

effects of the independent variables. Multiple

classification analysis, or multiple regression with

dummy variables, is a method of standardization in

which population composition is statistically controlled

while assessing the effect of a specific factor on the

dependent variable. The MCA table shows the net

effect of each variable when controlling for differences

in the other factors. Table 6 presents the results of

the MCA of the determinants of economic status.^^

The independent variables in the analysis of the

economic well-being of children include:

Ascribed characteristics and family composition:

(1) Race-White or black.

(2) Number of siblings-Ranging from no other

child under age 18 to four or more children

under age 18.

Characteristics of parents:

(3) Age of parent-Ranging from ages 18 to 24, to

ages 60 and older.

(4) Sex and marital status of parent, and, if spouse

present, labor force status of spouse.

(5) Educational attainment (years of school

completed)"Ranging from 1 to 8 years

elementary school to 5 or more years of college.

(6) Number of earners-Ranging from no earners to

three or more earners.

Area-level characteristics:

(7) Residence-Metro or nonmetro.

(8) Region-Northeast, Midwest, South, and West.

(9) Migration status-Nonmigrant, metro to metro

migrant, metro to nonmetro migrant, nonmetro

to metro migrant, and nonmetro to nonmetro

migrant.

(10) Tenure-Homeowner or renter.

After selecting the independent variables in the final

model, separate analyses of the economic well-being of

metro children and nonmetro children were conducted

(See Appendix C for separate MCA tables for metro

and nonmetro children).

Because a change in the dependent variable could

alter the findings, the bivariate relationships, with

—n—' A plot of residuals by predicted values of the dependent variable

yielded the expected random pattern. To determine whether some

or all of the independent variables were intereorrelated, a test for

multicollinearity was performed. As no large negative correlation

coefficients were found in the correlation matrix, one can assume

that multicollinearity does not exist, and that the independent

variables are not highly correlated.

poverty status as the dependent variable, will be

compared with the results obtained using the incomeneeds ratio as the dependent variable before

proceeding to the results of the MCA. In the previous

section, poverty status was divided into three

categories: poor children, near-poor children, and

children in families with incomes at least 1-1/2 times

the poverty level In the MCA analysis, the dependent

variable (the income-needs ratio) is modified to

include more levels at the upper end of the economic

spectrum. This shift in focus will allow one to assess

the determinants of children's economic well-being

and not only the determinants of childhood poverty.

The results are identical using either poverty status or

the income-needs ratio as the dependent variable, with

the same pattern of variation within categories of the

independent variables, in separate analyses for each of

the independent variables in table 6. For illustrative

purposes, consider the relationship between residence

and the alternative dependent variables. The

unadjusted deviations from the grand mean in table 6

show the same relationship between residence and the

income-needs ratio as was seen between residence and

poverty status (tables 4 and 5). For children in metro

areas, the average income-needs ratio is 3.12 (2.93 +

0.19), which represents an economic level slightly

more than triple the poverty level. For nonmetro

children, their average income-needs ratio is 2.35 (2.93

- 0.58), or more than double the poverty level. These

results parallel the previous findings, which show the

more advantageous position of children in metro

areas, where nearly 71 percent were in families at the

upper end of the income scale (at least 150 percent

above the poverty level), compared with 64 percent of

children in nonmetro areas.

The bivariate relationship between race and the two

alternative dependent variables provides another

example of the similarity in results. Table 6 shows an

average income-needs ratio of 3.18 for white children,

more than triple the poverty level For black children,

the ratio is 1.61, slightly more than 1-1/2 times the

poverty level With an average income-needs ratio of

2.93 for all children (about three times the poverty

level), these results show white children 9 percent

above and black children 45 percent below the

average. This relationship parallels that seen

previously (table 4), with 69 percent of white children

and 30 percent of black children in nonmetro areas in

families with incomes at least 150 percent above the

poverty level A similar finding occurs among metro

children. No differences are found in the bivariate

relationships for any of the independent variables in

table 6 when the income-needs ratio is substituted for

18
Table 6—MuItîple classifîcatîon analysis of the economic well-being of children

Characteristics

Number of

children

Deviations from grand mean

Unadjusted Eta^ Adjusted^ Beta^

Thousands Grand mean = 2.93^

Total 59,648

Parent's education:

Elementary, 1-8 years

High school, 1-3 years

High schoolj 4 years

College

1-3 years

4 years

5 or more years

Number of siblings^:

None

One

Two

Three

Four or more

Family type:

Married couple, spouse

in labor force

Married couple, spouse

not in labor force

Male householder

Female householder

Homeownership:

Homeowner

Renter

No cash rent

0.50 0.33

4,929

7,561

23,683

10,987

6,553

5,935

14,083

23,547

13,458

5,257

3,302

27,667

16,725

1,765

13,492

38,466

20,115

1,068

-1.57

-1.41

-.43

.31

1.72

2.34

.78

.28

-.51

-1.02

-1.60

.85

-.02

-.31

-1.68

.67

-1.22

-1.24

.28

.41

.38

-0.97

-.71

-.37

.10

1.16

1.71

.84

.10

-.48

-.76

-1.16

.33

.05

.,17

.71

.25

-.43

..71

.25

.17

.14

Number of earners:

None

One

Two

Three or more

5,539

19,819

26,402

7,888

-2.42

-.63

.63

1.16

.42

.65

.26

.20

.42

.13

Residence:

Metro

Nonmetro

Parent's age:

18-24 years

25-29 years

30-34 years

35-39 years

40-49 years

50-59 years

60 years and older

45,235

14,414

3,440

8,824

13,804

14,269

15,223

3,110

979

.19

-.58

-1.79

-.87

-.31

.22

.90

.62

-.69

.14

.31

.16

-.50

..72

..32

..04

.12

.26

.17

-.29

.12

.11

-Continued

19
Table 6—Multiple classification analysis of the economic well-being of children—continued

Characteristics

Number of

children

Deviations from grand mean

Unadjusted Eta^ Adjusted^ Beta^

Thousands

Race:

White 50,178

Black 9,470

Migration status:

Nonmover 47,863

Metro to metro move 6,803

Metro to nonmetro move 625

Nonmetro to metro move 2,058

Nonmetro to nonmetro move 2,299

Region:

Northeast 11,350

Midwest 15,204

South 21,034

West 12,061

Grand mean = 2.93^

0.24

0.25 0.04

-1.32

.16

-.23

.18 .02

-.50 -.04

1.14 .07

-.79 -.35

-1.27

.08

-.01

.33 .10

-.03 -.07

-.20 -.03

.09 .04

0.04

.03

.03

R^ = .473

^ Common correlation ratio; eta shows the effect of each independent variable on the income-needs ratio without controlHng for the

other independent variables.

^ Adjusted for ail other variables in the table.

^ Standardized partial regression coefficient; beta shows the expected change in the income-needs ratio for a unit change in the given

independent variable, holding all other independent variables constant.

^ The grand mean or the income-needs ratio is the ratio of family income to the poverty threshold; a value less than 1 is below the

poverty level.

^ Younger than age 18.

poverty status as the dependent variable. The major

advantage of the modified dependent variable is that

one can view the determinants of the economic

welfare of children over a broader spectrum, and not

focus only on poor and near-poor children.

Table 6 presents the multiple classification analysis

results of the determinants of childhood economic

status. The overall accuracy of the equation predicting

the relationship between economic status (as measured

by the income-needs ratio) and the set of independent

variables is quite strong (R^ = .473). R^ is a measure

of the proportion of the variation in the dependent

variable that the set of independent variables explains.

Thus, the independent variables in table 6 explain 47

percent of the variation in the income-needs ratio.

These variables indicate what factors affect children's

economic well-being and the relative influence of each

variable in determining the income-needs ratio. From

an examination of the F ratios, all of the independent

variables listed in table 6 have been found to be

statistically significant, with an overall good fit of the

data to the model.

Two measures of association-eta and beta-are shown

in table 6. Eta is the common correlation ratio (with

a range from 0 to 1), used when the independent

variables are categorical and the dependent variable is

measured at the interval or ratio level. Eta indicates

the effect of each independent variable on the incomeneeds ratio (dependent variable), without controlling

for the other independent variables. Eta^ is equal to

the proportion of the variance in the dependent

variable that each independent variable explains.

The second measure of association in table 6 is beta,

or the standardized partial regression coefficient. Beta

indicates the expected change in the dependent

variable for a unit change in the independent variable,

when all other independent variables are held

constant. The standardized partial regression

coefficient is a useful measure when the independent

20
variables are measured in different units, because it

allows comparisons of the relative effect of each

independent variable on the dependent variable. One

can determine from the betas in table 6 how much

each independent variable adds to the explained

variation in the income-needs ratio. All of the

independent variables in the table are significant and

are listed in order of explanatory power (or the

decreasing magnitude of beta). The squared partial

regression coefficient, beta^ is equal to the

proportionate increase in the explained variation

accounted for by the independent variable.

When all other factors are held constant, parental

education and number of siblings in the family are the

strongest predictors of the economic status of children

(table 6). Family type is also a strong predictor.

While the magnitude of the coefficients is smaller,

homeownership, number of earners in the family,

metro-nonmetro residence, and parental age are all

important determinants of the economic status of

children.

Parental education has the greatest effect on the total

variation in the income-needs ratio when other factors

are held constant. Educational attainment is positively

related to economic well-being, with an incremental

increase in the income-needs ratio for an increase in

parental education. The best financial position is

found among children with highly educated parents (5

or more years of college). For example, the average

ratio for children whose parents had completed 1-3

years of high school was 24 percent below the grand

mean of 2.93, or slightly more than twice the poverty

line. The ratio for children whose parents had

completed 5 or more years of college was 58 percent

above the grand mean, a level about 4-1/2 times the

poverty level.

The effect of educational attainment on economic

well-being is both direct and indirect. When all other

factors are controlled (standardization), the effect of

education is reduced (from eta of 0.50 to beta of 0.33).

This indicates that the variation in the income-needs

ratio between the lowest and the highest educational

level will be less when other factors are held constant.

This reduced effect of parental education on economic

well-being indicates that education has an indirect

effect on economic well-being through its influence on

labor force status and earnings. .

Holding other factors constant, the number of siblings

has a strong, inverse effect on economic status, with

children in larger families clearly at an economic

disadvantage. Children in families with no siblings or

only one sibling will be better off financially than the

average child (grand mean of 2.93), with economic

status deteriorating incrementally with each additional

child in the family. For example, children with only

one sibling will be 3 percent above the grand mean;

whereas children with four or more siblings will be 40

percent below the grand mean. Standardization has

very little effect on this variable, showing the strong

independent influence of the number of siblings on

the income-needs ratio.

The expected relationship between type of family and

economic welfare was found, with children in marriedcouple families faring better than children in motheronly families. Children in married-couple families

with the spouse in the labor force were 11 percent

above the average for all children, a level more than

triple the poverty level. But, children in mother-only

families were 24 percent below the average incomeneeds ratio, approximately twice the poverty level.

The economic advantage of children in married-couple

families was reduced, however, when other factors

were controlled (from eta of 0.41 to beta of 0,17),

This suggests that other factors associated with

mother-only families, such as being black, less

educated, and without a job, contribute to some of the

economic disadvantages that children in such families

experienced.

The adverse effect of living in a mother-only family

combined with other characteristics of the family, as

illustrated below, will show how easily this type of

family can slip below the poverty line. Tlie average

child in a mother-only family will have an incomeneeds ratio of 2.22 (2.93 - 0.71). If the child's parent

has completed only 7 years of elementary school,

subtract 0.97 from 2.22 for a value of 1.23. The child

has already shifted into the near-poor category

(between 100 and 149 percent of the poverty level). If

the child lives in a family with two siblings (1.23 - 0.48

= 0.75), or in a renter family (1.23 - 0.43 = 0.80), or

in a family with only one earner (1.23 - 0.26 = 0.97),

then that child will fall below the poverty line. While

living in a mother-only family, by itself, will not put

the child below the poverty line, the addition of other

family characteristics can greatly increase the risk of

experiencing poverty.

The results of the multiple classification analysis also

show that home ownership, the number of earners in

the family, metro-nonmetro residence, and parental

age are important determinants of childhood economic

status. When other characteristics of children's

families are held constant, residence still exerts a

strong influence on economic well-being.

Standardization has virtually no effect on the

explanatory power of residence on the income-needs

21
ratio, which suggests that residence has an

independent effect on economic status. An average

income-needs ratio of 3.09 (above the grand mean) for

metro children translates into a level of economic

well-being slightly more than triple the poverty level.

For nonmetro children, the ratio falls below the grand

mean (2.43), and indicates that the average nonmetro

child will be in a family with an income approximately

2-1/2 times the poverty level. Even though children in

both metro and nonmetro areas will average above the

poverty line, metro children have a distinct economic

advantage over their nonmetro counterparts.

Counter to expectations, race did not have a large

effect on the income-needs ratio as seen in the

multiple classification anal3^is. The racial difference

in economic status was reduced substantially when

other factors were controlled. From the unadjusted

deviations from the grand mean, the income-needs

ratio of the average white child was 3.18 and that of

the average black child was 1.61. When adjusted for

all other factors in the table, these ratios change to

2.97 for whites and 2.70 for blacks. Although white

children are still in a better financial position than

their black counterparts, standardization has

considerably decreased the gap between the two races.

Thus, characteristics that are more concentrated

among black families, such as lower educational

attainment, more unemployment, larger families, and

more mother-only families, undoubtedly contribute to

the economic disadvantage of black children.

The separate multiple classification analysis tables of

the determinants of economic status for metro

children and nonmetro children are presented in

Appendix C. Although the coefficient was relatively

small, the age of the child was statistically significant

in the nonmetro model, but not in the metro model,

nor in the model for the total child population.

Standardization virtually eliminated the effect of the

child's age, however, which suggests that other factors

associated with having younger children in nonmetro

areas probably contribute to the effect of this variable

on the family's economic situation.

The overall accuracy of the model for metro children

(R^ = .484) was better than that for nonmetro

children (R^ = .388). Thus, the model explains 48

percent of the variation in the income-needs ratio for

metro children and accounts for about 39 percent of

the variation in the ratio for nonmetro children.

Perhaps the fact that nonmetro areas, though

following recent metro changes in family lifestyles, still

lag somewhat their metro counterparts in such

changes may partially account for the lower accuracy

of the predicted relationship between economic status

and the set of independent variables for nonmetro

children. Recent social changes occurring in metro

areas may exert a greater influence in nonmetro areas

in fiiture years if demographic and social trends in the

two areas be(X)me more similar.

Receipt of Gash Assistance

and Noncash Benefits

Poverty status determines eligibility for a number of

Federal benefit programs, which provide either cash

assistance or noncash benefits to needy families and

individuals to help ameliorate some of the adverse

conditions resulting from low income and resources.

Many of these programs are means-tested, meaning

that to be eligible, household income and assets, or

means, must fall below a specified level. Some

children, such as the near poor, may be denied

benefits because their household does not meet the

eligibility rules, even though the child's family

resources are far fi:om a comfortable range. The

availability of assistance from selected Federal benefit

programs will affect the character of childhood

poverty.

Different eligibility rules are used for the various

noncash benefit programs and cash assistance

programs. Means-tested noncash programs include

food stamps, free or reduced-price lunches, public

housing, rent subsidies, and Medicaid health insurance.

For example, eligible households with children aged 5-

18 can participate in the free or reduced-price lunch

program. An additional requirement for the free

lunch program is that the student live in a household

with an income at or below 130 percent of the official

poverty level. Students who qualify for the reducedprice lunch program must be in households with

incomes between 130 percent and 185 percent of the

official poverty level. (See Appendix D for a

discussion of the eligibility rules for the programs

discussed in this section.)

Before turning to the Current Population Survey

(CPS) data on noncash benefit programs, a few

qualifications are needed. First, almost all meanstested, noncash transfer programs are based on

monthly incxjme accounting periods. This differs from

the poverty status variable, which is based on annual

household income. Thus, households with periodically

low monthly income, but relatively high annual

income, may legally qualify for benefits. In addition,

eligibility for most types of in-kind programs are based

on countable income, or gross income minus certain

types of excluded income and allowable deductions.

Second, most means-tested noncash transfer programs

22
require an asset eligibility test in addition to the lowincome test. And third, rules for eligibility may vary

from State to State (for example, as in the Medicaid

program) and from locality to locality (as in public

housing programs). The combined effect of the above

factors~a monthly income accounting period, income

exclusions and deductions, asset tests, and State and

local variations in some programs-may result in

patterns of noncash benefit recipiency not fully

consistent with the CPS data on annual poverty.

With the exception of the food stamp program, similar

proportions of metro and nonmetro poor children

participate in the various noncash benefit programs

(table 7). Children in families below the poverty level

participate in the various benefit programs more than

the near-poor or the total child population. For all

children, regardless of poverty status, nearly 19 percent

of nonmetro children and 14 percent of metro children

received food stamps.^"* Among poor children, a

higher proportion of nonmetro children (63 percent)

received food stamps than their metro counterparts

{5S percent). The relatively high participation rates in

the food stamp program among eligible households

with children reflects the fact that many poor children

are participating in the Federal Aid to Families with

Dependent Children program (AFDC). Most AFDC

families are also eligible for and participate in the

^Unpublished data from the March 1988 CPS public use file.

food stamp program (U.S. House of Representatives,

Committee on Ways and Means, 1989).

While no significant differences by residence were

found for the receipt of noncash benefits other than

food stamps, table 7 shows that metro poor children

were somewhat more likely to receive Medicaid and

public housing assistance, but less likely to receive

rent subsidies than were their nonmetro counterparts.

This may be associated with the community itself,

since public housing is more common in larger,

metropolitan areas. Rent subsidies in nonmetro areas

may be a more practical method of adjusting for

housing inequities.

Approximately 87 percent of all elementary and

secondary school students were in schools participating

in the National School Lunch Program (NSLP) in

1986 (U.S. House of Representatives, Committee on

Ways and Means, 1989). Roughly half of the meals

subsidized by the NSLP go to children from lower

income families. In fiscal year 1987, 42 percent of the

children receiving NSLP lunches received free lunches,

7 percent received reduced-price lunches, and the

remaining 51 percent paid full price for their meals

(U.S. House of Representatives, Committee on Ways

and Means, 1989).

When near-poor children are combined with poor

children, the pattern of participation in food stamp,

Table 7—Recipients of selected types of noncash benefits, by residence and poverty status, 1987

Metro Nonmetro

Poverty status

and type of benefit Eligible Recipients Eligible Recipients

"Numbei:-- Percent "Number-- Percent

Poor children:

Food stamps 9,440 5,505 58.3 3,556 2,256 63.4

Free lunch 6,710 5,889 87.8 2,661 2,318 87.1

Medicaid 9,440 5,045 53.4 3,556 1,793 50.4

Public housing 7,185 1,334 18.6 2,190 322 14.7

Rent subsidy 5,851 802 13.7 1,868 291 15.6

Near-poor children:

Food stamps 4,584 759 16.6 1,854 319 17.2

Free lunch 2,970 1,933 65.1 1,319 866 65.7

Medicaid 4,584 640 14.0 1,854 202 10.9

Public housing 2,820 227 8.1 695 57 8.2

Rent subsidy 2,593 128 4.9 638 22 3.4

23
Medicaid, and public housing programs, by residence,

remains the same as that observed among only poor

children (fig. 11). For example, a somewhat larger

proportion of poor and near-poor metro children (67

percent) received Medicaid health insurance than their

nonmetro counterparts (61 percent). Approximately

53 percent of all poor children are covered by

Medicaid insurance, with an additional 14 percent of

near-poor children covered.

Table 8 presents data on cash assistance programs

most relevant to children's eœnomic well-being,

including AFDC, alimony and child support, and

energy assistance. About 43 percent of poor

children, regardless of residence, received AFDC in

1987, compared with about 11 percent of all children.^^

With a higher concentration of nonmetro children in

married-couple families, perhaps children in motheronly families are poorer, and thus participate more in

the AFDC program. Black children, children in

mother-only families, and children in larger families

are more likely to receive AFDC (fig. 12). For

example, among nonmetro children, 40 percent of

those in mother-only families received AFDC,

compared with 4 percent of their counterparts in

married-couple families. Figure 13 shows that

children whose parents are younger, less educated,

and unemployed were more likely to receive AFDC.

While only 4 percent of children whose parents

were employed received AFDC, 30 percent with

unemployed parents and 49 percent with parents

not in the labor force did so.

Of approximately 11 million AFDC recipients in fiscal

year 1988, 67 percent were children; this represents 11

percent of the total child population and 65 percent of

children in poverty (U.S. House of Representatives,

Committee on Ways and Means, 1989). Government

expenditures on welfare, or assistance programs, such

as AFDC, more than tripled between 1965 and 1980,

leveling off in the 1980's (Danziger and Gottschalk,

1985). As a percentage of children in poverty, child

AFDC recipients have fallen from a high of 82 percent

in 1973 to a low of 50 percent in 1982, and rose

slightly to 56 percent in 1987 (U.S. House of

Representatives, Committee on Ways and Means,

1989).

Even though AFDC does help some disadvantaged

children, poverty rates remain high. One reason for

the high childhood poverty rates is that AFDC

payments are not adjusted for inflation (U.S.

Department of Health and Human Services, Social

Security Administration, 1982). And, programs such

Figure 11

Receipt of noncash benefits, by residence

and poverty status, 1987

Food stamps

Medicaid

Metro 58.3 1^

Nonmetro 63.4 1^

Metro 53.4 14.0:

Nonmetro 50.4 mM

Public housing

i I Poor

^ Near poor^

_L j

20 40 60 80 100

Percent

1/ Incomes 100-149 peroent of the poverty level

Source^ March ^©88 Current Population Survey, public use fie.

Table 8--Recipients of selected types of cash

assistance, by residence and poverty

status, 1987

Poverty status and Metro Nonmetro

type of benefit Tecipients recipients

Percent Percent

of of

ISFumber total Number total

Poor children^:

Aid to Families with

Dependent Children 4,046 42.9 1,486 41.8

Alimony/child support 967 10.2 436 12.3

Energy assistance 2,488 26.4 1,336 37.6

Near-fKX3r children^:

Aid to Families with

Dependent Children 442 9.6 115 6.2

Alimony/child support 465 10.1 233 12.6

Energy assistance 357 7.8 236 12.7

^^Unpublished data from the March 1988 OPS public use file.

^ Number of poor children eligible for selected tyf^s of cash

assistance is 9,440 for metro and 3,556 for nonmetro children.

^ Number of near-poor children eligible for selected types of

cash assistance is 4,584 for metro and 1,854 for nonmetro

children.

24
Figure 12

Receipt of AFDC for nonmetro children, by

selected characteristicSp 1987^

Figure 13

Receipt of AFDC for nonmetro children, by

selected parental characteristics, 1987^

Race

Family type

Family size

White

Black

Married couple

Mother only

One sibling

Four or more

siblings

Age

Education

Employment

18-24 years

30-39 years

1-3 years

high school

1-3 years

college

Unennployed

Employed

1/ ADFC denotes the Federal Aid to Families with Dependent CNIdren program.

Source: March 1988 Current Population Si^vey. public use file.

1/ ADFC denotes the Federal Aid to Families with Dependent Children program.

Source: March 1988 Current Population Survey, public use file.

as AFDC sometimes inadvertently deny assistance to

the needy (Deavers and Brown, 1984). For example,

in some States, married-couple families with

unemployed earners are ineligible for AFDC or

Medicaid benefits.

No significant difference by metro or nonmetro

residence is found in the receipt of alimony and child

support payments (table 8). Women who are least

likely to receive child support are frequently

minorities, less educated, and never-married (U.S.

Department of Health and Human Services, 1987). In

1985, of the 8.8 million women who had children at

home under age 21 from an absent father, 39 percent

were never awarded child support rights; nor did they

have an agreement to receive child support payments.

For poor mothers, the proportion without child

support rights was even higher, at 60 percent (U.S.

House of Representatives, Committee on Ways and

Means, 1989). Of all women who were entitled to

receive child support in 1985, less than half (48

percent) received the full amount, about 26 percent

received less than what they were due, and 26 percent

received no payment at all. Among poor mothers who

were entitled to receive child support payments in

1985, 66 percent received payments, while 34 percent

did not (U.S. House of Representatives, Committee on

Ways and Means, 1989). The most important factors

in receiving child support payments are having a child

support agreement and agreeing on the level of child

support payments (Peterson and Nord, 1989).

Although many children in economically disadvantaged

households do receive government benefits and

assistance, a substantial number do not, and live below

a comfortable standard. This could be due to the

various eligibility rules or to a lack of knowledge of,

or access to, the system. It may also be due, in part,

to a mismatch between annual poverty for the

preceding year (from CPS data) and the recipiency

accounting period (usually monthly). While noncash

benefits and cash assistance payments may reduce

some of the disparities in economic status, the

question remains as to whether this is enough to raise

the living standard for poor families above poverty.

To what extent do noncash benefits and other

assistance programs improve the situation of poor

children? Adjusting poverty statistics to include the

value of in-kind benefits reduced poverty rates in both

metro and nonmetro areas over the 1979-87 period

(Hoppe, 1989). Even with this adjustment, Hoppe

(1989) found that nonmetro poverty rates still

increased sharply after 1979 and remained higher than

metro rates. A study of poverty estimates based on

both money income and the value of selected noncash

benefits found that including the value of noncash

benefits would reduce the number of poor in 1985 by

8-35 percent from the current poverty definition,

depending on which valuation technique was used

(U.S. Department of Commerce, Bureau of the

Census, 1987). It appears that Federal assistance and

benefit programs reduce some of the disparities in

25
household income and may improve the economic

welfare of disadvantaged children.

Conclusions

This report has addressed a number of issues

pertaining to the economic well-being of nonmetro

children, comparing their situation with that of metro

children. To date, there has been no comprehensive

study of children by metro-nonmetro residence. This

report has documented recent changes in both family

living arrangements and poverty conditions of

children; differences in economic well-being by

residential, demographic, and socioeconomic

characteristics; and differences in the receipt of cash

and noncash benefits, by residence.

Recent changes in the living arrangements of

nonmetro children have paralleled those of metro

children, with fewer children living with both parents

and an increased number of children in families

maintained by women. The one-parent family has

definitely become more prevalent today. The decline

in married-couple families has important implications

for local communities, in terms of childbearing and

the provision of goods and services associated with

children. Also, the increase in mother-only families

implies a growing need at the local level for public

assistance and programs, such as day care, special

education, and income maintenance.

Trends in childhood poverty since 1970 indicate that

poverty is a persistent problem, and that poverty rates

remain consistently higher for nonmetro children.

Although some improvement occurred in the poverty

rates for nonmetro children during the early 1970's,

the recessionary periods of the 1980's increased

childhood poverty rates. Since the early 1980's, metro

poverty rates have declined somewhat. However,

nonmetro rates have remained high, reflecting the

poor performance of the nonmetro economy.

Although strides have been made in reducing poverty,

high childhood poverty persists, and new solutions are

needed to combat childhood poverty.

Over time, poverty rates have remained higher for

black children and children in mother-only families.

With increases in the number of families maintained

by women and the economic disadvantages that

children in such families face, childhood poverty can

be expected to remain high. Black children and

children in mother-only families have a greater

likelihood of experiencing poverty, although this was

primarily accounted for by other factors.

While poverty among children in mother-only families

is a growing problem, nearly half of all poor children

in nonmetro areas live in married-couple families.

Efforts targeted solely at children in mother-only

families will thus miss a substantial proportion of the

child population at risk of poverty. For example,

many children in married-couple families are ineligible

for AFDC and Medicaid benefits. AFDC has also

been less effective in combatting poverty in nonmetro

areas due to a larger share of the nonmetro poor in

States (mostly in the South) with low AFDC benefits

(Hoppe, 1989), Noncash benefits and cash assistance

payments may reduce some of the disparities in

economic status, but in many cases this is not enough

to raise the living standard for poor families above

poverty and financial hardship.

The results of the multivariate analysis of the

determinants of childhood economic status indicate

that a multitude of factors in children's family

environments influence their economic welfare.

Numerous studies have found that blacks, mother-only

families, less-educated persons, those residing in the

South, and persons in nonmetro areas are more likely

to be poor. This report goes a step further in

assessing these factors, plus several others, which have

a direct bearing on children and their family lives.

Other things being equal, the strongest predictors of

the economic well-being of children were parental

education, the number of siblings in the family, and

family structure. Homeownership, the number of

earners in the family, metro-nonmetro residence, and

parental age were also important determinants of

economic status.

The higher incidence of childhood poverty in

nonmetro areas is an important issue to address in

rural development planning and policies. The

economic stress experienced in nonmetro America in

the 1980's is reflected in slow job growth, high

unemployment, nonmetro outmigration, reduced

population growth, and undeveloped human resources

(Brown and Deavers, 1988). Programs with an

emphasis on opening up better employment

opportunities will certainly help some persons to

escape poverty. Lx)cal education and training

programs can also help parents obtain better jobs and

higher earnings, resulting in improved financial

conditions for their children. Separate metrononmetro policies are not necessary, but national

policies need to be tailored to the unique aspects of

nonmetro areas. Prospects for reducing the residential

gap in economic status are limited, however, due to

differences in the educational and occupational

œmposition of the two residential areas.

26
Several provisions of the Family Support Act of 1988

may help ameliorate some of the adverse economic

conditions for a number of children. The Family

Support Act restructures the AFDC program,

emphasizes education and job training, and extends

income assistance to intact families in all States with

an unemployed breadwinner who meets certain workrelated requirements. The main beneficiaries of the

Family Support Act welfare reforms will be the

population currently served by AFDC, namely,

mother-only families. This legislation may especially

benefit the nonmetro poor, since many States in which

the nonmetro poor are concentrated have not

previously offered AFDC benefits to unemployed

parents (Deavers and Hoppe, 1991). The Family

Support Act also provides guarantees for child care

and stricter enforcement of child support orders.

Legislative reforms, along with some recent social

changes, should help improve the economic outlook

for children. Delayed marriage and childbearing have

allowed parents to complete their educations, and

better educated parents are more marketable in the

labor force. The postponement of childbearing has

also resulted in smaller family sizes, with more

resources available to children within the family. For

many children, the experience of living in a singleparent family is temporary, as most never-married

mothers eventually marry, and a high percentage of

divorced parents remarry. Thus, children in motheronly families may face economic disadvantages for only

a portion of their childhood. Adding support to the

notion of being temporarily poor is the improved

economic position of older children and parents.

Children under age 6 and parents under age 30 face

the worst economic conditions. The trends toward

higher parental education and smaller families could

partially offset the economic disadvantages experienced

by the increasing share of children living in motheronly families. These societal trends, along with the

restructuring of the AFDC program, suggest that the

situation for many children will become brighter.

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29
Appendix A: Definitions and Explanations

Cash public assistance or welfare. Includes payments

under the Aid to Families with Dependent Children

(AFDC) program, Supplemental Security Income

(SSI)j and payments often categorized as general

assistance. AFDC assists States and localities in

providing cash assistance to needy families with

children. SSI provides cash assistance to needy aged,

blind, and disabled individuals. Other cash assistance

consists of alimony or child support, payments from

the Emergency Assistance Program, refugee assistance,

and other programs to help selected groups, and

assistance for paying home heating and cooling

expenses.

Current Population Survey (CPS), A monthly survey of

approximately 71,000 households representative of the

civilian noninstitutional population of the United

States, including Armed Forces personnel living off or

on base with their families. About 57,000 households

are interviewed in the monthly survey conducted by

the Bureau of the Census, with another 2,000-2,500

households found to be occupied but otherwise

unavailable for interview. In addition to the monthly

CPS data collected on employment, the March CPS

income and demographic supplement collects annual

data on employment and income, sources of income,

the receipt of child support, alimony, and AFDC

payments, and family and household composition and

living arrangements. Data on employment and income

refer to the preceeding year, whereas demographic

data refer to the time of the survey.

Educational attainment. The years of school

completed by the parent or reference person in the

child's family. Data on years of school completed are

derived from the combination of answers to two

questions: (1) "What is the highest grade of school

that the person has attended?" and (2) "Did the person

finish this grade?"

Household and Family Concepts.

Family. A group of two or more persons (one

of whom is the householder) related by birth,

marriage, or adoption, and residing together;

all such persons (including related subfamily

members) are considered as members of one

family. Unrelated subfamilies are not

included in the count of families, nor are

members of unrelated subfamilies included in

the count of family members. The count of

family members differs from the count of

family household members, in that family

members include only the householder and

his or her relatives, whereas family household

members include all persons living in the

household (including unrelated persons).

Householder. The person (or one of the

persons) in whose name the housing unit is

owned or rented or, if there is no such

person, any adult member, excluding roomers,

boarders, or paid employees. If a home is

owned or rented jointly by a married couple,

either the husband or wife may be designated

as the "householder" (the reference person to

whom the relationship of all other household

members is recorded).

Marital status. A classification of four major

categories: never married, married, widowed,

and divorced. These terms refer to the

marital status at the time of the interview.

The married category is further divided into

married, spouse present; separated; and

married, spouse absent. A person is classified

as married, spouse present if the husband or

wife was reported as a member of the

household, even though he or she may have

been temporarily absent on business or on

vacation, visiting, in a hospital, and so forth

at the time of the interview. Persons

reported as separated include those with legal

separations, those living apart with intentions

of obtaining a divorce, and other persons

permanently or temporarily separated from

their spouses because of marital discord. The

married, spouse absent group includes

married persons living apart because either

the husband or wife was employed and living

at a considerable distance from home, was

serving away from home in the Armed Forces,

had moved to another area, or had a different

place of residence for any other reason except

separation as defined above.

Own children and related children. Own

children in a family are sons and daughters,

including stepchildren and adopted children,

of the householder. Similarly, own children

in a subfamily are sons and daughters of the

married couple or parent in the subfamily (all

children identified as members of related

subfamilies are own children of the person(s)

maintaining the subfamily). Related children

in a family include own children and all other

children in the household who are related to

the householder by birth, marriage, or

adoption. For each type of family unit

30
defined in the CPS, the count of own

children under age 18 is limited to nevermarried children; the count of related

children in families includes children who

have ever been married.

Related subfamily, A married couple with

or without children, or one parent with at

least one never-married child under age 18

living in a household and related to, but

not including, the householder or spouse.

One example of a related subfamily is a

young married couple sharing the home of

the husband's or wife's parents.

Unrelated subfamily, A group of two or

more persons who are related to each other

by birth, marriage, or adoption, but who are

not related to the householder. The

unrelated subfamily may include guests,

roomers, boarders, or resident employees

and their relatives living in a household.

Unrelated individuals. Persons of any age

(other than inmates of institutions) who are

not living with any relatives. An unrelated

individual may be: (1) a person living alone

or with nonrelatives only; (2) a roomer,

boarder, or resident employee with no

relatives in the household; or (3) a group

quarters member who has no relatives

living with him or her.

Income, Total money income includes the sum of all

amounts of income received from earnings and other

sources. These sources include wages or salaries; net

income from self-employment (farm or nonfarm);

Social Security or railroad retirement; Supplemental

Security Income; dividends, interest (on savings or

bonds), rent, royalties, and income from estates or

trusts; public assistance and welfare payments;

unemployment and workers' compensation; private

and government retirement and disability pensions;

veterans payments; alimony and child support; and any

other source of money income that was regularly

received. Certain money receipts, such as capital

gains, are not included. All income statistics refer to

receipts during the preceding year.

Income data in the CPS cover money income received

before payments for personal income taxes. Social

Security, union dues, Medicare deductions, and so

forth. Money income does not reflect the fact that

some households receive part of their income in the

form of noncash transfers, such as food stamps, health

benefits, subsidized housing, and energy assistance.

Moreover, household surveys tend to underestimate

income received by respondents because of

nonsampling errors, such as underreporting,

misreporting, nonreporting, and nonresponse. Census

Bureau analyses of independently derived income

estimates have determined that wages and salaries tend

to be much better reported than other sources of

income, such as public assistance, Social Security, and

net income from interest, dividends, rents, and so

forth.

Laborforce and employment status. Data on labor

force and employment status are collected in the CPS

for the population aged 15 and older.

Labor force. Persons are classified as in the

labor force if they are employed as civilians,

unemployed, or in the Armed Forces during

the survey week. The civilian labor force is

composed of all civilians classified as

employed or unemployed.

Employed. Employed persons comprise: (1)

all civilians who, during the specified week,

did any work at all as paid employees, in their

own business or profession, or on their own

farm, or who worked 15 hours or more as

unpaid workers on a farm or in a business

operated by a member of the family; and (2)

all those who were not working but who had

jobs or businesses from which they were

temporarily absent because of illness, bad

weather, vacation, or labor management

dispute, or because they were taking time off

for personal reasons, whether or not they

were paid by their employers for time off, and

whether or not they were seeking other jobs.

Excluded are persons whose only activity

consisted of work around the house

(housework, painting or repairing own home,

and so forth) or volunteer work for religious,

charitable, and similar organizations.

FulltimeIparttime. Full-time work is defined

as working 35 hours or more per week.

Unemployed. Unemployed persons are

civilians who, during the survey week, had no

employment but were available for work and:

(1) had engaged in any specific job-seeking

activity within the past 4 weeks, such as

registering at a public or private employment

office, meeting with prospective employers,

checking with friends or relatives, placing or

answering advertisements, writing letters of

application, or being on a union or

31
professional register; (2) were waiting to be

called back to a job from which they had

been laid off; or (3) were waiting to report

to a new wage or salary job within 30 days.

Not in the labor force. All civilians who are

not classified as employed or unemployed

are defined as not in the labor force. This

group of persons who are neither employed

nor seeking work includes those engaged in

only own-home housework; attending

school; or those unable to work because of

long-term physical or mental illness, retired

persons, seasonal workers for whom the

survey week fell in an off season, and the

voluntarily idle. Persons doing only unpaid

family work, for less than 15 hours per

week, are also classified as not in the labor

force,

Metro-nonmetro residence. The population residing in

metropolitan statistical areas (MSA's), as defined by

the Office of Management and Budget on June 30,

1984, constitutes the metro population. An MSA is a

geographic area consisting of a large population

nucleus and adjacent communities that have a high

degree of economic and social integration with that

nucleus. The definition specifies a boundary around

each large city to include most or all of its suburbs.

Entire counties form the MSA building blocks, except

in New England, where cities and towns are used.

An area qualifies for recognition as an MSA if: (1) it

includes a city of at least 50,000 population, or (2) it

includes a Census Bureau-defined urbanized area of at

least 50,000, with a total metropolitan population of at

least 100,000 (75,000 in New England). In addition to

the county containing the main city or urbanized area,

an MSA may include other counties having strong

commuting ties to the central county. If specified

conditions are met, certain large MSA's are designated

as consolidated MSA's (CMSA's) and divided into

component primary MSA's (PMSA's).

Nonmetro areas are counties without an urban center

of 50,000 population and not in the commuting zone

of a metropolitan area. The concept of nonmetro

used in this report is not synonomous with rural. The

concept of rural refers to open country (specifically,

places of fewer than 2,500 residents).

In the CPS public use file, a number of persons (2.9

percent) were included in an unidentified category for

metro-nonmetro residence. Five States-Rhode Island,

Maryland, Wyoming, Arizona, and Utah-had part of

their populations classified as unidentified for

residence, with no cases identified as nonmetro. This

problem arises in the CPS public use file due partly to

sampling in low-density areas, with all nonmetro and

some metro residents in these five States being

classified as unidentified. Because about 70 percent of

the unidentified population was nonmetro, ail

unidentified cases were assigned nonmetro status.

About 2.9 percent of the nonmetro population in this

report actually contains some residents of small metro

areas.

Mobility status. The population aged 1 and older was

classified according to mobility status on the basis of a

comparison between the place of residence of each

individual at the time of the March 1988 survey and

the place of residence 1 year earlier. Nonmigrants are

all persons who were living in the same residence at

the end and the beginning of the 1-year period.

Migrants are all persons who were living in a different

residence at the end of the 1-year period than at the

beginning.

The variables designated "metro residence in 1987" and

"residence 1987-88" contained a sizable number of

persons coded not identifiable in the public use file.

These variables were recoded and the unidentifiable

cases were reassigned to determine mobility status.

The previously recoded variable designated "metrononmetro residence in 1988" and several other

variables referring to residence in 1987 and 1988 were

used to reassign cases to either metro or nonmetro for

1987 and 1988. Migrants from abroad were excluded

from the recoded migration variable. The recoded

mobility status variable was assigned to children from

their parent's or reference person's record.

Noncash benefits. Benefits received in a form other

than money, and that serve to enhance or improve the

economic well-being of the recipient. The March CPS

collected data on two major categories of noncash

benefits: (1) benefits that could be defined as public

transfers, and (2) benefits that could be categorized as

employer- or union-provided benefits to employees.

The survey covered the following programs in the

category of public noncash transfers: the Food Stamp

Program, the National School Lunch Program, public

and other subsidized housing, Medicare health

insurance, Medicaid health insurance, and Civilian

Health and Medical Program of the Uniformed

Services (CHAMPÚS), Veterans Administration (VA),

or other military health care insurance. Data were

collected for two types of employer- or union-provided

noncash benefits: pension plans and group health

insurance plans.

32
Means-tested benefits, Noncash transfers including

food stamps, free or reduœd-price lunches, public

or subsidized renter-occupied housing, and

Medicaid health insurance. To qualify for meanstested benefits, household income or assets

(resources) must fall below a specified level.

NonmeanS'tested benefits, Noncash benefits

including Medicare, regular-priced school lunches,

employer- or union-provided group health

insurance and pension plans, and CHAMPÚS,

VA, or other military health care. Households

receiving nonmeans-tested benefits are not

required to meet income or asset guidelines.

Occupation, Data on the occupation of employed

persons refer to the civilian job held during the survey

week. Persons employed at two or more jobs were

reported in the job at which they worked the greatest

number of hours during the week. The following

occupational categories were used: (1) managerial and

professional specialty-executive, administrative,

managerial, and professional specialty occupations;

(2) technical, sales, and administrative supporttechnicians and related support, sales, and

administrative support (including clerical) occupations;

(3) service occupations; (4) farming, forestry, and

fishing; (5) precision production, craft, and repair

occupations; (6) operators, fabricators, and laborersmachine operators, assemblers, and inspectors,

transportation and material moving occupations, and

handlers, equipment cleaners, helpers, and laborers;

(7) Armed Forces, currently civilian; and (8) those

who did not work in the previous year.

Poverty, Families are classified as being above or

below the poverty level using the poverty index

originated at the Social Security Administration in

1964 and revised by Federal Interagency Committees

in 1969 and 1980. The poverty index is based solely

on money income and does not reflect the fact that

many low-income persons receive noncash benefits,

such as food stamps, Medicaid, and public housing.

The index is based on the Department of Agriculture's

Economy Food Plan and reflects the different

consumption requirements of families based on their

size and composition.

The poverty index provides a range of money income

cutoffs or thresholds adjusted to take into account

family size, number of children, and age of family

householder. The poverty threshold reflects a

minimum income need. Total family income is tested

against the appropriate money income threshold to

determine the poverty level of the family. If total

family income is less than the corresponding threshold,

the family is classified below the poverty level. The

average poverty threshold in 1987 for a family with

one child under age 18 was $9,142 and for a family

with two children under age 18 was $11,519. The

poverty thresholds are updated every year to reflect

changes in the Consumer Price Index (CPI).

Tenure, A housing unit, cooperative, or condominium

is owned if the owner or co-owner lives in the unit,

even if it is mortgaged or not fully paid for. All other

occupied units are classified as rented, including units

rented for cash and those occupied without payment

of cash rent.

33
Appendix B: Poverty Status Tables by Residence, Race, and Family Type

Appendix table 1-Poverty status of white children, by demc^raphic and family characteristics, 1987

Selected characteristics

Metro

Below At or near Above

poverty poverty^ poverty^

Below

poverty

Nonmetro^

At or near

poverty^

Above

poverty'*

Percent

Total

Age of child:

Under 6 years

6-11 years

12-17 years

Family type:

Married couple

Female householder

Number of siblings:

None

One

Two

Three or more

Age(s) of siblings:

Some under 3 years

All 3-5 years

All 6-17 years

Number of earners:

None

One

Two

Three or more

14.6

16,6

15.1

11.8

ai

44.0

10.5

10.3

17.1

31.6

18.6

16.7

11.0

81.3

19.2

5.4

2.9

8,8 76.6 18.5 12.5 68.9

9.2 74.2

9.5 75,4

7,8 80.4

7,9 84.0

13.0 43.1

6.7 82.8

7.4 82.2

10.6 72.3

14.4 54.0

10.3 71.1

9.3 74.0

7.7 81.4

6.6 12.0

13.4 67,4

7.2 87,5

4.9 92,2

22.1 13.0 64.9

18.7 12.3 69.0

14.9 12.3 72.8

12.1 12.1 75,7

53.0 15.1 32.0

15.1 9,9 75,0

14.2 11.2 74.5

23.0 13.2 63.8

30.3 20.3 49.3

24.0 14.2 61.8

19.9 12.4 67.7

14.9 11.6 73.5

81.0 7.8 11.2

28.2 17.5 54.3

8.1 10.3 81.6

6.8 11.1 82.1

^Weighted population of 38,125,000.

^Weighted population of 12,757,000.

^Incomes at 100-149 percent of the poverty level.

"^Incom^ at 150 percent or more of the poverty level.

34
Appendix table 2~Poverty status of black children, by demographic and family characteristics, 1987

Selected characteristics

Metro^

Below At or near Above

poverty poverty^ poverty'*

Nonmetro'^

Below At or near Above

poverty poverty^ ' poverty^

Percent

Total 43.2 13.0 43.8 58.6 11.3 30.0

Age of child:

Under 6 years 46.3 13.9 39.7

6-11 years 43.0 12.8 44.2

12-17 years 40.2 12.3 47.6

Family type:

Married couple 13.4 15.0 71.6

Female householder 65.3 11.6 23.1

Number of siblings:

None 29.5 11.1 59.5

One 37-7 11.7 50.7

Two 50.4 12.1 37,5

Three or more 58.6 18.2 23.2

Age(s) of siblings:

Some under 3 years 49.2 15.3 35.5

All 3-5 years 45.0 11.5 43.6

All 6-17 years 37.4 11.9 50.7

Number of earners:

None 88.0 3.4 8.6

One 44.8 19.0 36.1

Two 10.2 14.7 75.1

Three or more 8.7 9.6 81.7

69.1 8.0 22.8

54.6 12.4 33.0

52.5 13.4 34.0

37.1 12.7 50.3

75.2 10.2 14.6

42.4 13.1 44.5

44.5 16.2 39.3

57.3 18.1 24.6

82.8 1.3 16.1

74.2 6.7 19.1

68.5 10.2 21.3

42.3 15.3 42.4

89.8 3.8 6.3

65.5 13.4 21.1

29.5 15.5 55.0

5.5 14.0 80.5

Weighted population of 7,907,000,

^Weighted population of 1,787,000.

^Incomes at 100-149 percent of the poverty level.

'^Incomes at 150 percent or more of the poverty level.

35
Appendix table S—Poverty status of children in married-couple families^ by demographic and family

characteristics, 1987

Selected characteristics Below

poverty

Metro

At or near

poverty^

Above

poverty"*

Below

poverty

Nonmetro^

At or near

poverty^

Above

poverty"*

Percent

Total 9.0 8.6 82.4 14.0 12.2 73.7

Age of child:

Under 6 years 10.0 9.7 803

6-11 years 9.0 9.0 81.9

12-17 years 7.8 6.9 853

Race:

White 8,1 7.9 84.0

Black 13.4 15,0 71.6

Number of siblings:

None 4.1 4.9 91.0

One 5.3 6.1 88.5

Two 10.3 10.8 78.6

Three or more 24.6 17.6 57.7

Age(s) of siblings:

Some under 3 years 11.7 11.4 76.9

All 3-5 years 11.0 9.4 79.6

All 6-17 years 6.0 6.2 87.8

Number of earners:

None 82.4 7.7 9,9

One 16.3 13.6 70,0

Two 4.6 7.4 88.1

Hiree or more 2.3 4.7 93.0

16.8 13.2 70.0

13.9 12.1 74.0

11.4 11.5 77.1

12.1 12.1 75.7

37.1 12.7 50.3

6.9 9.2 83.9

9.4 10,4 80.2

17.8 13.7 68.5

30.3 19.0 50,8

20.5 14.1 65,4

14.8 12.8 72.4

9.9 10.9 79.2

71.2 13.4 15.5

25.3 16.7 58.0

8.8 10.5 80.7

6.3 10.9 82.8

^Weighted population of 35,231,000.

^Weighted population of 11,511,000.

•^Incomes at 100-149 percent of the poverty iCTel.

"^Incomes at 150 percent or more of the poverty level.

36
Appendix table 4"Poverty status of children in mother-only households, by demographic and family

characteristics, 1987

Selected characteristics Below

poverty

Metro^

At or near

poverty^

Above

poverty"*

Below

poverty

Nonmetro^

At or near

poverty^

Above

poverty"*

Percent

Total 52.4 12.4 35.2 60.9 13.3 25.8

Age of child:

Under 6 years 61.9 10.4 27.8

6-11 years 52.9 13.2 33.9

12-17 years 42,8 13.6 43.6

Race:

White 44.0 13.0 43.1

Black 65.3 11.6 23.1

Number of siblings:

None 34.4 12.3 53.3

One 45.4 14.4 40.2

Two 67.7 12.6 19.8

Three or more 82.1 7.8 10.1

Age(s) of siblings:

Some under 3 years 68.6 10.9 20.6

All 3-5 years 58.1 10.2 31.8

All 6-17 years 40.4 14.3 45.3

Number of earners:

None 85.3 5.0 9.7

One 37.7 16.4 45.9

Two 24.4 16.7 58.9

Three or more 21.0 16.6 62.3

69.7 9.7 20.6

63.3 13.5 23.2

49.9 16.6 33.6

53.0 15.1 32.0

75.2 10.2 14.6

48.6 12.7 38.7

52.1 16.9 31.0

68.5 14.8 16.7

90.4 5.2 4.4

74.7 9.7 15.6

66.9 10.8 22.3

50.0 16.5 33.4

88.5 4.0 7.5

51.7 18.3 30.0

28.3 15.7 55.9

19.7 21.3 59.0

^Weighted population of 11,342,000.

^Weighted population of 2,989,000.

^Incomes at 100-149 percent of the poverty level.

'^Incomes at 150 percent or more of the poverty level.

37
Appendix C% Multiple Classification Analysis Tables for Metro

and Nonmetro Children

Appendix table S-Multlple classificatioii analysis of the economic status of metro children

Characteristics

Total

Parent's education:

Elementary^ 1-8 years

High school, 1-3 years

High school, 4 years

College

1-3 years

4 years

5 or more years

Number of siblings^:

None

One

Two

Three

Four or more

Family type:

Married couple, spouse

in labor force

Married couple, spouse

not in labor force

Male householder

Female householder

Homeownership:

Homeowner

Renter

No cash rent

Number of earners:

None

One

Two

Three or more

Number of

children

Thousands

45,235

3,649

5,523

17,078

8,559

5,484

4,940

10,890

17,852

10,057

3,963

2,474

20,681

12,488

1,371

10,694

28,548

16,184

503

4,314

15,228

19,693

5,999

Deviations from grand mean

Unadjusted Eta^ Adjusted^

-1.73

-L6Î

-,48

.26

L71

239

.81

.30

-.55

-1.09

-L71

.93

.04

-.33

-1.80

.78

-1.35

-1.02

-2.61

-.66

.70

1.24

Grand mean = 3.11'*

0.51

.29

.43

.41

.44

=1.06

-.79

-.42

.05

1.15

1.76

.87

.11

-.49

-.82

-1.25

.35

.06

-.17

-.72

.27

-45

-.99

-.69

-.28

.23

.46

Beta^

0.34

.25

.17

.15

.14

-Continued

38
Appendix table 5—Multiple classification analysis of the economic status of metro children—continued

Characteristics

Number of

children

Deviations from grand mean

Unadjusted Eta^ Adjusted^ Beta^

Parent's age:

18-24 years

25-29 years

30-34 years

35-39 years

40-49 years

50-59 years

60 years and older

Race:

White

Biack

Migration status:

Nonmover

Metro to metro move

Nonmetro to metro move

Region:

Northeast

Midwest

South

West

R2 = .484

Thousands

2,579

6,640

10,423

10,809

11,682

2,371

730

37,528

7,707

36,373

6,803

2,058

9,986

10,568

14,761

9,919

Grand mean = 3.11"*

0.33

1.95 -0.79

-.95 -.37

-.33 -.03

.21 .13

.97 .27

.71 .21

-.75

.25

-.36

.28 .05

138

.15

-.22

.18 .02

-M .01

'M

.05

-.30

.21 .11

-.05 =.07

-.13 -.07

.04 .06

0.12

.04

.03

.03

Common correlation ratio; eta shows the effect of each independent variable on the income-needs ratio without controlling for the

other independent variables,

^Adjusted for all other variables in the table.

Standardized partial regression coefficient; beta shows the expected change in the income-needs ratio for a unit change in the given

independent variable, holding all other independent variables constant.

'^e grand mean or the income-needs ratio is the ratio of family income to the poverty threshold; a value less than 1 is below the

poverty level.

Younger than age 18.

39
Appeiulix table 6"Multiple classification analysis of the economic status of nonmelro children

Characteristics

Number of

children

Deviations from grand mean

Unadjusted Eta^ Adjusted^ Beta-*

Thousands Grand mean = 2.35'^

Total

Parent's education:

Elementary, 1-8 years

High school, 1-3 years

High school, 4 years

College

1-3 years

4 years

5 or more years

Number of siblings^:

None

One

Two

Three

Four or more

14,414

1,280

2,038

6,604

2,428

1,069

995

3,194

5,696

3,401

1,294

828

-1.05

-ni

^.19

.38

L38

1.74

.63

.22

-.36

-.77

-1.22

0.40

.27

-0.69

-.43

-.20

,26

1.04

1.35

.72

.10

-.40

-.57

0.29

.25

Family type:

Married couple, spouse

in labor force

Married couple, spouse

not in labor force

Male householder

Female householder

.39 .18

6,985

4,238

393

2,797

.65

-.16

-.31

-1.34

.26

.00

-.16

-.64

Homeownership:

Homeowner

Renter

No cash rent

9,918

3,931

565

.41

-.90

-1.01

.32

.14

-.27

-.55

.11

Number of earners:

None

One

Two

Three or more

Parent's age:

18-24 years

25-29 years

30-34 years

35-39 years

40-49 years

50-59 years

60 years and older

.41 .13

1,225

4,591

6,709

1,889

861

2,184

3,381

3,460

3,541

739

249

-1.85

-.57

.48

.89

-1.30

-.59

-.25

.24

.64

.33

-.45

.28

-.50

-.21

.14

.32

-.55

-.19

-.06

.11

.19

.04

-.09

.10

-Continued

40
Appendix table 6—Multiple classification analysis of the economic status of nonmetro children-continued

Characteristics

Number of

chiidren

Deviations from grand mean

Unadjusted Eta^ Adjusted^ Beta^

Thousands Grand mean = 2.35^

Race:

White

Black

Migration status:

Nonmover

Metro to nonmetro move

Nonmetro to nonmetro move

Region:

Northeast

Midwest

South

West

Age of child:

Younger than 6 years

6-11 years

12-17 years

R^ = .388

12,650

1,764

11,490

625

2,299

1,364

4,636

6,272

2,142

4,668

5,001

4,744

0.18

-1.28

.17

-.56

.69

.42

.17

-.23

.02

-.26

-.08

.34

0.25

.17

.12

.13

0.04

-.27

.04

-.10

-.18

,11

-.03

.02

-.06

-.06

-.02

.08

0.05

.04

.02

.03

^ Common correlation ratio; eta shows the effect of each independent variable on the income-needs ratio without controlling for the

other independent variables,

^ Adjusted for all other variables in the table.

^ Standardized partial regression coefficient; beta shows the expected change in the income-needs ratio for a unit change in the given

independent variable, holding all other independent variables constant.

^ The grand mean or the income-needs ratio is the ratio of family income to the poverty threshold; a value less than 1 is below the

poverty level.

^ Younger than age 18.

41
Appendix D: Eligibility Criteria for Selected

Noncash Benefits and Cash Assistance

Programs

Aid to Families with Dependent Children (AFDC), The

AFDC program provides cash welfare payments for

needy children under age 18 (and their mothers or

other caretaker relatives) who have been deprived of

parental support or care because their father or

mother is absent from home continuously,

unemployed, incapacitated, or deceased. States define

need, set their own benefit levels, establish income and

resourœ limits within Federal limitations, and either

administer the program or supervise its administration.

AFDC for two-parent families where the principal

wage earner is unemployed is offered in 31

jurisdictions.

Federal law requires certain able-bodied recipients,

including mothers whose youngest child is at least age

6, to register for work or job training. If a minor who

is living in the same home as his or her parents

applies for aid as the parent of a needy child, the

income of the minor's parents is to be counted as

available to the filing unit. Most AFDC families are

also eligible for and participate in the food stamp

program. The food stamp program considers AFDC

payments to be countable income and reduces the

food stamp benefit by 30 cents for each dollar of

countable cash income.

Energy Assistance, The purpose of the Low-Income

Home Energy Assistance Program (LIHEAP) is to

help low-income households meet their energy-related

expenses. States have considerable discretion to

determine eligibility criteria for LIHEAP and the types

of ener^ assistance to be provided. At State option,

LIHEAP payments can be made to households, based

on categorical eligibility, where one or more persons

are receiving SSI, AFDC, VA pensions, or dependency

and indemnity compensation. States can also elect to

make payments to households with incomes that are

less than 150 percent of the Federal poverty income

guideline or 60 percent of the State's median income,

whichever is greater. However, Stales cannot establish

an income eligibility ceiling that is below 110 percent

of the poverty level

Food stamps. Food stamps are designed primarily to

increase the food purchasing power of eligible lowincome households to a point where they can buy a

nutritionally adequate low-cost diet. Benefits are

available to nearly all households that meet Federal

eligibility tests for limited monthly income and liquid

assets, as long as certain household members fulfill

work registration and employment and training

program requirements. In addition, most recipients of

AFDC and SSI cash welfare programs generally are

automatically eligible for food stamps; households

a)mposed entirely of AFDC or SSI recipients are

categorically eligible for food stamp aid without regard

to food stamp income and asset standards.

Under the employment- and training-related tests,

certain household members must register for work,

accept suitable job offers, and fulfill work or training

requirements (such as looking or training for a job)

established by State welfare agencies. The limited

number of categorical eligibility rules makes some

persons automatically eligible for food stamps (most

AFDC and SSI recipients), and categorically denies

eligibility to others (such as strikers, illegal and

temporary resident aliens, and those living in

institutional settings). Applications cannot be denied

because of the length of a householder's residence in a

welfare agency's jurisdiction, or because the

householder has no fixed mailing address or does not

reside in a permanent dwelling.

Monthly cash income is the primary food stamp

eligibility determinant. Except for AFDC and SSI, all

households must have counted (net) monthly income

that does not exceed the Federal poverty guidelines, as

adjusted for inflation. Households without an elderly

or disabled member also must have basic (gross)

monthly income that does not exceed 130 percent of

the inflation-adjusted Federal poverty guidelines.

Fr^e or reduced-price lunch. The National School

Lunch Program (NSLP) provides Federal cash and

commodity support to participating public and private

schools and nonprofit residential institutions that

serve meals to children. The program has a threetiered reimbursement system that allows children from

households with incomes at or below 130 percent of

the poverty level to receive free meals, permits

children with incomes between 130 percent and 185

percent of the poverty level to receive meals at a

reduced price, and provides a small subsidy for meals

to children with incomes above 185 percent of the

poverty level Children in AFDC families are

automatically eligible to receive free lunches,

Medicaid, Medicaid is a Federal-State matching

entitlement program providing medical assistance for

low-income persons who are aged, blind, or disabled;

members of families with dependent children; certain

other children; and certain pregnant women.

Eligibility for Medicaid is linked to actual or potential

receipt of cash assistance under the AFDC and SSI :

-programs. Within Federal guidelines, each State

42
designs and administers its own program; ihus^ there is

substantial variation among States in terms of persons

covered, types and scope of benefits offered, and

amounts of payment for services.

A connection to cash assistance remains the primary

method of establishing Medicaid eligibility, but recent

legislation has expanded the population groups eligible

for program coverage. Under the new legislation,

States are required to phase-in coverage of all children

under age 7 who meet the income and resource

standards, as well as infants and pregnant women

below the poverty line. All States are required to

cover certain categorically needy persons (generally

AFDC and SSÏ recipients), and may extend such

coverage to certain additional persons. Coverage of

the medically needy is optional with States. A State

may have an AFDC-UP program, which covers twoparent families where the principal breadwinner is

unemployed. Even without an AFDC=UP program,

States may cover families with unemployed parents»

Public housing/rent subsidy. The primary purpose of

housing assistance is to improve housing quality and

to reduce housing costs for lower income households.

The Federal Government provides housing aid to

lower incombe households in the form of rental subsidies and mortgage-interest subsidies. Most Federal

housing aid is now targeted to very low-income renters

through the rental assistance programs administered

by the U.S. Department of Housing and Urban

Development (HUD) and the U.S. Department of

Agriculture's Farmers Home Administration (FmHA).

Rental assistance is provided through two basic

approaches: (1) project-based aid, which is typically

tied to projects specifically produced for lower income

households through new construction or substantial

rehabilitation; and (2) household-based subsidies,

which permit renters to choose standard housing units

in the existing private housing stock. Rental

assistance programs generally reduce tenants' rent

payments to a fixed percentage (currently 30 percent)

of their income after certain deductions, with the

Government paying the remaining portion of the

dwellings' costs.

The Federal Government also assists some low- and

moderate-income households in becoming

homeowners by making long-term commitments lo

reduce their mortgage interest. Most of this aid has

been provided through the section 502 program

administered by the FmHA, which itself supplies

mortgage loans at low interest rates roughly equal to

the long-term Government borrowing rates. Many

homeowners, however, receive much deeper subsidies

through the interest^credit component of this program,

which reduces their effective interest rate to as low as

1 percent^ A number of homebuyers have received aid

through HUD's Section 235 program, which provides

interest subsidies for mortgages financed by private

lenders. Both programs generally reduce mortgage

payments, property taxes, and insurance costs to a

fixed percentage of income, ranging from 20 percent

for the FmHA program to 28 percent for the latest

commitments made under the HUD program.

^ U.S. Governnieni. Piinting Office : 1991 ^282-958/40174

43
A USDA/ERS BRIEFING BOOKLET

THE 1990 FARM ACT

AND THE 1990 BUDGET

RECONCILIATION ACT

How U.S» Farm Policy Mechanisms

Will Work Under New Legislation

This new 40-page booklet, explaining new farm legislation, has just been released

by the Economic Research Service of the U.S. Department of Agriculture. This

booklet explains the main features of the new 5-year farm law in easy-to-follow

pages of illustrative material. These "veriDal graphics" act as a self-programmed

instruction method, as the reader easily proceeds from one point to another. The

t)ooklet works in the same general way as an informal briefing which makes its

points step-by-step with overhead transparencies.

The booklet begins with an overview of the goals which motivated changes in farm

legislation, accompanied by the most important mechanisms that support them.

Main goals Basic Mechanisms

Reduce the Federal deficit —^ Reduce payment acres

Improve agricultural competitiveness —^ Permit planting flexibility;

Maintain market-oriented loan rates

Enhance the environment —^ Implement Agricultural Resources

Conservation Program

The booklet then proceeds with definitions and illustrations of basic mechanisms of

farm policy for the next 5 years:

• Target Price • Loan Rates • Deficiency Payments

• Crop Acreage Base • Zero-92 • Farmer-Owned Reserve

• Payment Limitation

To order your copy of this timely publication, Just dial l-SOO-SSS-eiTS.

Call toll free In the United Statesand Canada, Other areas, dial

301'725'7937. Ask for "The 1990 Farm Act and the 1990 Budget

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when you order 25 or more copies to one address.
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