Addressing early childhood poverty pays

Addressing early childhood poverty costs money, but the future benefits may be much more.  This is the result from a study Economic Cost of Early Childhood Poverty in the US. The study concluded:

More than four million infants, toddlers and preschoolers lived in poverty in the United States in 

2005.  

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).