In the case of adult work and earnings, we estimate that eliminating poverty in early
childhood (through annual income transfers that average $4,326 between the prenatal
year and age 5 and bring poor children‟s family income just up to the poverty line) would
boost annual work hours by 12.4% percent and earnings by 28.7% percent per year. In
dollar terms, this amounts to lifetime earnings increases of between $53,000 and
$100,000 per child, depending on the assumed duration of the poverty effect.
In the case of food stamps, we estimate that eliminating poverty in early childhood would
reduce lifetime food stamp receipt in adulthood by at least $1,600. For cash assistance
from the old AFDC or newer TANF programs, eliminating early poverty for females is
estimated to lead to lifetime reductions of at least $1,250. These translate into
aggregate taxpayer saving of between $590 million and $230 million for eliminating
poverty from the prenatal year through age 5 for children born each year.
In the case of education, we estimate that eliminating poverty in early childhood would
boost completed schooling by about one-fifth of a year. Some of the financial benefits of
this boost are reflected in the earning increases and reductions in cash assistance
described above. The dollar value of a number of other likely benefits – such as greater
civic involvement, or, for children, the happiness of spending childhood in a non-poor
household – is difficult to quantify.
From a taxpayer perspective, eliminating poverty from the prenatal year through age 5
provides three measureable benefits: more tax revenue (between $10,600 and $20,000 per
poor child), and fewer expenditures on food stamps ($2,000 per poor child) and cash
welfare ($1,600 per poor female child).