The Economic Costs of Poverty in the United States: Subsequent Effects of Children Growing Up Poor.

January 2007

Harry J. Holzer, Georgetown University and the Urban Institute, and Diane Whitmore Schanzenbach, University of Chicago, and Greg J. Duncan, Northwestern University, and Jens Ludwig, Georgetown University and National Bureau of Economic Research.

Download 'working_paper07-04.pdf'.


In this paper, we review a range of rigorous research studies that estimate the average statistical relationships between children growing up in poverty and their earnings, propensity to commit crime, and quality of health later in life. We also review estimates of the costs that crime and poor health per person impose on the economy. Then we aggregate all of these average costs per poor child across the total number of children growing up in poverty in the U.S. to estimate the aggregate costs of child poverty to the U.S. economy. Our results suggest that the costs to the U.S. associated with childhood poverty total about $500B per year, or the equivalent of nearly 4 percent of GDP.

Child Well-being and Child Development, Crime, Incarceration, and the Labor Market, Employment, Unemployment, and the Labor Market