The most reliable and comprehensive estimates show a large drop in child poverty in 2020, while poverty rates for working age adults and older adults remained largely unchanged. The new poverty information was released by the US Census Bureau as the 2020 American Community Survey 1-Year Experimental Data.
Better news on child poverty in Ohio in 2020
In 2020, just under 423,000 children lived in poverty in Ohio, representing a child poverty rate of 16.8 percent. The last time child poverty measured this low was the 2000 decennial census, which reported the share of children who lived in poverty in 1999. This is excellent news for Ohio’s children, as growing up in poverty has been linked to a host of negative health and social circumstances.
In 2020, just under 423,000 children lived in poverty in Ohio.
Seem too good to be true? There’s certainly reason for skepticism. ACS 1-year estimates always carry uncertainty, but COVID-19 disrupted data collection in 2020 in ways which may have undercounted low-income households. The Census Bureau made statistical adjustments, released only a limited set of data which met their stringent standards, and took extra time for the analysis. They also advise against comparing the 2020 Experimental Data with previous years. Therefore, we are not able to determine if changes are statistically significant. Even with the challenges, the 2020 experimental ACS data remain the best estimates of income and poverty in Ohio and across the country, and a drop in child poverty is consistent with other sources of information.
How could child poverty have fallen during a year when unemployment reached record levels and parents struggled to balance work and remote school for their children?
Cash benefits like stimulus payments diminished economic disruption during the pandemic
How could child poverty have fallen during a year when unemployment reached record levels and parents struggled to balance work and remote school for their children? It appears that the government’s swift action during the pandemic had the desired effect. Available ACS data does not allow us to examine the reasons for the decline, but other models found that government intervention during the pandemic blunted the impact of economic disruption. The ACS relies on household income to calculate poverty status, which in 2020 would have included Economic Impact Payments (aka stimulus) and any additional unemployment compensation for parents.
The two rounds of stimulus went out in 2020 included at least $500 per dependent, and moved 3.2 million American children out of poverty. The actual impact of government action could be much larger because some other interventions, such as SNAP, P-EBT, and tax credits, help families make ends meet but are noncash benefits so excluded from these poverty calculations.
Maintaining the momentum to lift children out of poverty
It appears that children were the biggest beneficiaries of stimulus and other government actions. The experimental estimate from 2020 showed a poverty rate of 12.4 percent for working-age Ohio adults between the ages of 18 and 24, which is the same as the 2019 ACS estimate. Poverty rate for older adults appears to be slightly higher than in 2019, but the change is small. Even if these data could be compared directly, none of the differences would be statistically significant.
Time will tell if the promising drop in child poverty is an anomaly or the beginning of a trend.
Time will tell if the promising drop in child poverty is an anomaly or the beginning of a trend. Continued emergency food assistance and improvements in the Child Tax Credit certainly helped families in 2021 but have either ended or are expected to end this year. Unfortunately, policy decisions must move faster than data collection and analysis of their real-world impact. The 2020 child poverty estimates provide an indication of the positive impact timely and targeted government action can have on breaking cycles of poverty.