Business

Why Being a Poor Kid in America Is Particularly Awful

For a rich country, the U.S. has an unusually high child-poverty rate—and spends unusually little on children and families.

Olga Khazan
Andrea Smith holds her daughter Norah at a playground in Winthrop Harbor, Illinois, May 9, 2014. Three of her children have been diagnosed with a rare disease, the diagnostic tests for which can run into the thousands of dollars.Jim Young / Reuters

One measure of how much governments prioritize children and families is how much they spend on things like child allowances, daycare, and child-tax credits. Inside a longer report on global child well-being, out this week from the nonprofit Child Trends, lies this surprising tidbit: The U.S. has a higher proportion of children living in poverty than most other high-income countries, and it spends just 0.7 percent of its GDP on benefits for families—a fraction of what other middle- and high-income countries spend.

“Among 21 countries in the study,” the organization writes in an accompanying statement, “the U.S. ranks second-to-last in the percentage of its GDP spent on benefits for families, despite one of the highest relative child poverty rates of the comparable high-income countries.” (Turkey technically ranks last, but only because its data is missing.)

Spending on Family Benefits by % of GDP, by Country

As this map shows, Western European nations spent the most of all 21 countries in the study on things like cash transfers to families with children, tax benefits, and public services for families. The U.K. leads the way, spending more than 4 percent of its GDP on these benefits—much higher than the average for all the OECD countries.

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Israel spent 2 percent, despite its large military budget. Even certain poorer countries managed to find the cash: Chile devotes 1.4 percent of its GDP to family benefits.

The U.S. comes in near the bottom, devoting less than one percent of its national income to perks for kids and parents. (Child Trends used data from the OECD and other sources.)

At the same time, the report suggests that American children are in dire need of this funding. A higher proportion of them live in poverty than do kids in most other industrialized nations. According to the report, 20 percent of American children live in households that earn less than half of the median household income. In Canada, that figure is 14. In Germany and Ireland, it's 10. In the U.K., that great grantor of daycare subsidies and cash payments to moms, it’s only 9.

The country America comes closest to, in terms of the prevalence of child poverty, is Spain—yet Spain spends twice as much as the U.S. does to help parents.

As I’ve written previously, as many as a third of American moms find themselves struggling to afford diapers at some point. Studies like this reveal one reason why that might be.