Childhood Poverty, Extended Family and Adult Poverty

Abstract

ABSTRACT This study investigates the extent to which childhood poverty experience and family variables affect the persistence of poverty in adulthood. We use the Panel Study of Income Dynamics data where subjects are observed over multiple years both as children and adults. We examine the extent to which the persistence of poverty after age 18 and age 25 are predicted by childhood poverty experience. We find that the proportion of time spent in poverty in adulthood increases with the proportion of time spent in poverty in childhood after controlling for other personal, family, place and time-period effects. The magnitude of the effect of childhood poverty on adult outcomes gets smaller but remains significant when examining poverty experiences after age 25. We also find that there are unobserved but strong family level effects that either increase or reduce the chances of adulthood poverty substantially for some extended family units.