Poverty Trends Depend Less on Family Structure, More on Overall Economy, Study Finds

8/21/2003

From: John Iceland, University of Maryland, 301-405-6430, jiceland@socy.umd.edu

COLLEGE PARK, Md., Aug. 21 -- The following was released by the Center for Public Information on Population Research:

"A rising tide lifts all boats," according to conventional economic wisdom, meaning that overall increases in American incomes should reduce the percentage of people with family incomes below the poverty line. The conventional wisdom was indeed correct during the 1990s, unlike earlier decades, according to a new study by John Iceland of the University of Maryland published in the latest issue of the journal Demography. Poverty rates declined between 1990 and 1999 for whites, blacks, and Hispanics in the United States, with the largest drop (just over 8 percentage points) coming for blacks. But this represents a change from the 1970s and 1980s, when an overall increase in incomes was not sufficient to stop a rise in poverty rates.

The reason, Iceland found, was that in the earlier period two powerful trends worked to counteract the effect of overall increases in incomes: Income inequality (the gap between those with high and low incomes) grew; as did the proportion of single-parent families, a group especially likely to be poor. Both these trends stopped during the 1990s.

"The 1990s witnessed a dramatic reversal in the association of changes in family structure with child poverty," especially for blacks, notes Iceland. In 1970, 65 percent of non-Hispanic black children lived in families headed by married couples. This fell to 40 percent by 1990, but then changed little during the next ten years. Single-parent families are more than five times as likely as married-couple families to be poor.

Even with strong income growth, the 1990s still did not see as much reduction in poverty rates as the earlier boom years of the 1950s and 1960s, the analysis shows. Poverty rates declined by about 40 percentage points for both blacks and Hispanics, and 24 percentage points for whites, between the years 1949-1969, when income inequality was decreasing. Improvements between 1990 and 1999 were more modest: 8 percentage points for blacks, 5 percentage points for Hispanics, and just over 1 percentage point for whites. Iceland used data from the decennial censuses and the Current Population Survey to calculate family incomes and poverty rates for various years.

Demography is the peer-reviewed journal published by the Population Association of America. The full article, "Why Poverty Remains High: The Role of Income Growth, Economic Inequality, and Changes in Family Structure, 1949-1999," is available on http://www.prb.org/cpipr. Or call the Center for Public Information on Population Research, 202-939-5414. The Center, a project of the Population Reference Bureau, is funded by the National Institute on Child Health and Human Development.