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Monday, Nov 3
Melvin Stephens, Estimating Program Benefits

Changes in the Distribution of Children's Family Income over the 1990s

Publication Abstract

Blank, R.M., and Robert F. Schoeni. 2003. "Changes in the Distribution of Children's Family Income over the 1990s." American Economic Review, 92(2): 304-308.

We propose to investigate changes in the entire distribution of children’s family income over the 1990’s, which allows us to observe the relative changes in income experienced among children in higher- and lower-income families. We are particularly interested in two questions: (i) How has the economic status of children changed at different points in the income distribution? (ii) Is there any evidence that welfare reform contributed to the observed changes? Some evidence on changes in child wellbeing over the 1990’s suggests good news. Child poverty rates fell to 16 percent by 2001, and poverty rates among black children hit a historical low of 30 percent in that year. Blank (2002) and Jeffrey Grogger et al. (2002) provide a complete set of citations to the growing literature that looks at changes in income and consumption over the past decade. At least some of this research indicates that not all low-income families experienced economic gains. In this paper, we use data on children’s household income from the March Current Population Survey (CPS) and average together information from 1992–1995 and 1997–2000. By averaging four years of data, we have an adequate number of observations to observe income reliably at each centile (1/100) in the distribution. We focus on these comparison years because they both bracket the economic expansion of the 1990’s and they bracket the 1996 legislative changes in welfare programs. To account for differences in family size across families, our focus is on the income-to-needs ratio (defined as the income level of the child’s family divided by the official poverty line for that family), rather than on actual income levels. We compare data from two samples, one that includes all children and another that includes only children in families without both parents present. This latter sample is largely composed of children in single-parent families but also includes children who live with neither parent (about 3 percent of all children in the mid-1990’s).

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