Childhood Poverty Cost U.S. $1.03 Trillion in a Year, Study Finds

These costs are clustered around the loss of economic productivity, increased health and crime costs, and increased costs as a result of child homelessness and maltreatment, finds the study, “Estimating the Economic Cost of Childhood Poverty in the United States,” published March 30 in the journal Social Work Research.

Rank co-authored the study with Michael McLaughlin, doctoral student at the Brown School.

“It is estimated that for every dollar spent on reducing childhood poverty, the country would save at least $7 with respect to the economic costs of poverty,” Rank said.

According to the Congressional Budget Office, Rank said that the federal government spent $3.7 trillion in 2015, meaning that the annual cost of childhood poverty represented 28 percent of the entire federal budget that year.

“We contend that alleviating poverty is in all of our collective self-interests. Whether we realize it or not, we each pay a high price for allowing poverty to walk in our midst,” Rank and McLaughlin wrote in the paper.

“The bottom line is that reducing poverty is justified not only from a social justice perspective, but from a cost–benefit perspective as well,” the authors wrote. “Investing in programs that reduce childhood poverty is both smart and effective economic policy.”

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