By Lisa Gennetian, Ph.D., Co-Investigator of the National Research Center on Hispanic Children & Families. Dr. Gennetian is also associate research scientist at New York University’s Institute for Human Development and Social Change, and a senior researcher at the National Bureau of Economic Research.
This is the first in a series of blog posts and other efforts by the National Research Center on Hispanic Children & Families to dig deeper into how Latino families experience poverty and earn income, and the implications that these findings have for programs and policy. The series, Latinos Interrupted: How Income and Poverty Impact Hispanic Families’ Economic Mobility, launches today with the release of three briefs on poverty and income among Hispanic families.
Let’s consider two children, Isabel and Miranda. Isabel, a four-year old, lives with her two parents, an aunt, and two siblings, in a newly established Hispanic community in North Carolina. Her father is consistently employed though he juggles three jobs, seven days a week, and is paid minimum wage. Her mother works part-time as a domestic cleaner.
Miranda, also four, lives with her mother, in the Bronx, New York. Her father is incarcerated and not paying child support. Her mother works intermittently when the hours are available, and supplements family income with public assistance.
Isabel, from a Hispanic household, and Miranda, from a non-Hispanic household, both live in poverty according to official definitions. Yet these and other illustrative profiles of children in poverty convey the vast ways in which government classifications of “the poverty line” mask the varying experiences of poverty and the nature of family economic circumstances.
Classifications of Poverty: Only One Snapshot of the Economic Lives of Hispanic Children
We know that Hispanic children are disproportionately poor and have been since the 1970s. With Hispanic children representing a growing proportion of the national population, it’s more important now than ever before to look at data from a variety of sources to understand as much as possible about their economic circumstances. Due to advances in data collection, we can even look at how the economic experiences of Hispanic children’s households vary by whether they are rich or poor (or in between), and by how variable their income is.
When we look at national data from 2004-2006 (a period of time prior to the Great Recession with a large enough sample of Hispanic children to examine in national studies) we find that one out of three Hispanic children resided in the lowest income households, and one out of 10 Hispanic children resided in the highest income households. In contrast, one out of four non-Hispanic children resided in the highest income households. This type of analysis alone offers a sobering picture of child income inequality along racial/ethnic lines.
Hispanic Children Less Likely to have Low and Volatile Income
One disadvantage of the conventional measure of poverty is that it is removed from the financial reality of the lives of low-income families that often juggle multiple sources of sometimes intermittent or unpredictable income.
Attempts to quantify this type of income change within a year show that the lowest income households experienced more volatile income over time (since the 1980s) than higher income households. Given these general patterns and the higher incidence of poverty, one may assume that Hispanic children may be particularly vulnerable to low and unstable income. Analyses suggest otherwise. Even though low-income children are, generally, also more likely to reside in households with less income stability, low-income Hispanic children reside in more income stable households than do their low-income non-Hispanic counterparts.
Low-income Hispanic children also experience fewer negative income shocks (drops in income between two periods of more than 33 percent) than do low-income non-Hispanic children, especially as compared to their low-income black peers.
Earnings = Income Stability for the Poorest Hispanic Children
Earnings and cash (such as TANF) or related social assistance (such as SNAP, formerly known as food stamps) are the two primary sources of income among low-income families. Cash assistance can stabilize income for families in need, in part because payouts are usually on a predictable monthly schedule. However, low-income Hispanic children benefit less from this source of income stability because their rates of receipt are much lower than for other low-income children.
It turns out that the source of stability among low-income Hispanic children is earnings. Total income from earnings tends to be relatively similar month-to-month, and a majority of low-income Hispanic children reside in households with at least one employed adult.
Is Poor–but Stable–Income Okay?
On the one hand, stable earnings and less reliance on cash assistance income may bode well for Hispanic children, particularly if it’s associated with broader family stability, even if at low overall income. On the other hand, stable chronic poverty is not good for children. In addition, earnings stability may result from one or more adults in the household juggling multiple jobs or work shifts, or balancing seasonal work with odd jobs, and thus may come at the cost of instability in other aspects of family life (i.e., household routines or time spent with parents).
The impact that income stability has on Hispanic families is not clear. However, what is clear is that, when we look at poverty, income, and public assistance programs through a Hispanic lens, the role of policy to help Latino families out of poverty also needs to be re-examined.