Views
9 months ago

The Consequences of Insufficient Household Income

This new Consequences of Insufficient Household Income report provides a deeper level of understanding of the choices that ALICE and poverty-level families across the country make when they do not have enough income or assistance to afford basic necessities, and the consequences of those choices.

ased child care has been

ased child care has been shown to offer higher quality academic preparation than informal settings, equipping children with higher levels of math and reading skills as they enter kindergarten (Bassok, Fitzpatrick, Greenberg, & Loeb, September/October 2016; Forry, et al., 2012). Delays in intellectual and social development: Quality care and a supportive educational environment are critical to the overall development of a child. A growing body of research has shown that high-quality early care and preschool is especially beneficial to children from low-income families, who tend to enter kindergarten 12 to 14 months behind their classmates in pre-literacy and language skills. Children who attend high-quality preschool are more likely to have kindergarten readiness skills and less likely to repeat grades and use special education services. They are more likely to graduate high school, succeed in college, and thrive in their careers. Society also benefits when children attend high-quality preschool: Each $1 spent on early learning brings an estimated $8.60 in returns to society, with half of that return generated by higher income (U.S. Department of Education, 2015). Staffing disparities: Staffing is crucial to quality child care programs; less expensive care options tend to have less experienced and well-trained staff. Care settings with more staff who are highly trained and better compensated can offer higher-quality activities, more responsiveness, and more stimulating, supportive care (U.S. Department of Education, 2015; U.S. Department of Health and Human Services, 2000). Health and safety risks: Higher-quality settings are likely to have better health and safety practices. Formal child care centers (including child care facilities, Head Start programs, and pre-kindergarten programs) are usually licensed and many are accredited by state or nonprofit early childhood organizations, though requirements vary by state (Child Care Aware of America, 2016). Children in highly accredited facilities tend to have fewer respiratory and other infections and fewer playground injuries than children in other organized care settings. In fact, safety experts estimate that up to 90 percent of injuries sustained at child care facilities could have been prevented through better safety awareness and prevention (Advisen, 2015; Sundby, 2016; U.S. Department of Health and Human Services, 2000). Strategy 2: Pay More for Care Than the Family Budget Allows One option some ALICE families choose is to pay more of their budget for child care than they can afford. The U.S. Department of Health and Human Services sets the affordability guideline for household spending on child care at 10 percent of household income. Yet in the ALICE Household Survival Budget for a family with two children, the cost of child care equals approximately 25 percent of the family’s budget. And beyond the cost of quality early education, there are additional expenses including care before and after child care center hours and transportation to and from child care (U.S. Department of Health and Human Services, 2013). Consequences No money for other necessities: When more money is devoted to child care, there is less available for other necessities. For example, some ALICE families make a trade-off by living in substandard housing, which can pose health risks to both children and adults, in turn raising health care costs for both families and communities. In addition, when stability is compromised in areas such as food or housing, children’s school performance often suffers and parents’ ability to support them decreases, with broad and often long-term economic consequences (Child Care Aware of America, 2016; Gould & Cooke, 2015). 26 UNITED WAY ALICE REPORT – THE CONSEQUENCES OF INSUFFICIENT HOUSEHOLD INCOME

Having a child with special needs has been a challenge, emotionally and financially, for Jessica, a single working mother from Martinsville, New Jersey. Her 11-year-old son, who has autism, receives health insurance throughthe Children’s Health Insurance Program, but she often has difficulty finding him affordable special needs programs for after school, school vacations, and the summer. “My mom helps me by watching him after school so I can work,” says Jessica, who works full time in an office. But summers are difficult, when there are five weeks where he’s not in programs. “I just have to go without pay or hope that my mom can handle him for some of the time,” she says. Making too much to qualify for government assistance, she and her son live paycheck to paycheck. “That’s a little scary to think that if I got sick or wasn’t able to work for awhile, I don’t know what I would do,” Jessica says. The only money she can save is her tax refund at the end of the year. She adds, “I just plan to put that away for my son.” Photo courtesy of United Way Lack of savings: ALICE families who overpay for child care are often not able to save for their child’s future – for higher education, or an unforeseen emergency. Without savings, the family risks both further instability and higher costs in health care and social services over the longer term (Child Care Aware of America, 2013). Increased debt: ALICE families with access to credit may borrow to get through this expensive period, making the calculation that it is worth it for a parent to stay in the workforce and that future earnings will be sufficient to pay off debt. Yet job circumstances often change, one parent may face unemployment or a job with lower wages, or borrowing may take the form of a high-rate credit card or alternative financial product. In these situations, families can find themselves unable to cover both current household expenses and newly incurred debt (Adams & Hamdi, 2015; Traub & Ruetschlin, 2012; El Issa, 2015). UNITED WAY ALICE REPORT – THE CONSEQUENCES OF INSUFFICIENT HOUSEHOLD INCOME 27

The Toronto Residents' Panel on Household Income ... - Cities Centre
Expenditure of Low Income Households in the ACT - ACT Council of ...
Median Household Income - Town of Ludlow
ALICE: Asset Limited, Income Constrained, Employed
Federal Tax Policies and Low-Income Rural Households - Economic ...
The Clean Energy Future package, households on low incomes and ...
Housing Assistance for Low Income Households (.pdf, 647 KB)
Dynamics of Poverty and Food Insufficiency - Economic Research ...
Transportation Spending by Low-Income California Households ...
household-income-standards-full
Household Income and Expenditure Survey Analysis Report
1 SUMMARY INCOME ELIGIBILITY Persons in Household ...
The Great Recession and the Distribution of Household Income
The Great Recession and the Distribution of Household Income
Inter Household Private Income Transfers and Poverty - Tanzania ...
Affordable credit for low-income households - Joseph Rowntree ...
community and household-level income & asset status baseline
Income, Wealth, and the Economic Well-Being of Farm Household ...
Decoupled Payments: Household Income Transfers - Economic ...
Income, Wealth, and the Economic Well-Being of Farm Household
How do Poor Households Smooth Their Income and Consumption?
housing policy and the location of low-income households
Letter to Household & Income Eligibility ... - New Mexico Kids
including details of payments to low income households - Australian ...
Low-Income Households' Expenditures on Fruits and Vegetables
Subtitle Raising living standards of low-income households
Composition of Farm Household Income and Wealth - Economic ...
ACOSS Carbon Price and Low Income Household Position Paper