The Disturbing Paradox of Poverty in American Families

Mark R Rank. Handbook of Contemporary Families. Editor: Marilyn Coleman & Lawrence H Ganong. Sage Publication. 2004.

The issue of poverty within America’s families has been both paradoxical and troubling a paradox in that impoverishment occurs in the context of American prosperity; troubling because of the detrimental outcomes associated with poverty. This juxtaposition provided much of the moral justification behind President Lyndon Johnson’s declared War on Poverty, when he announced, in his 1965 Inaugural Address:

In a land of great wealth, families must not live in hopeless poverty. In a land rich in harvest, children just must not go hungry. In a land of healing miracles, neighbors must not suffer and die unattended. In a great land of learning and scholars, young people must be taught to read and write.

Although the War on Poverty attempted to raise the moral and policy consciousness of the nation, it also set in motion the beginnings of our modern-day research understanding into American poverty. In fact, it was only with the onset of the War on Poverty that the United States began to measure poverty on an official basis, while at the same time initiating a series of policy and academic analyses funded out of the newly created Office of Economic Opportunity. These studies, along with many others that followed, have greatly informed us as to the nature and character of American poverty.

This chapter takes stock of what we have learned from the research community during the past four decades. The review is divided into five substantive areas: (a) the scope and dynamics of American poverty; (b) factors associated with poverty; (c) the effects and consequences of impoverishment; (d) policy strategies for assisting poor families; and (e) needed future research directions.

The Scope and Dynamics of Poverty

It was not until 1964 that the United States had an official measure of poverty. The task of devising such a standard fell to Mollie Orshansky, an economist in the Social Security Administration (see Orshansky, 1965). Orshansky’s basic methodology has remained intact to this day and represent the most common measure of poverty found in governmental reporting and academic research. Poverty was operationalized as the lack of a specific level of income necessary to purchase a basic basket of goods and services allowing for a minimally decent level of existence (for an extended discussion on the measurement of poverty, see Brady, 2003; Glennerster, 2002; Institute for Research on Poverty, 1998; National Research Council, 1995; U.S. Bureau of the Census, 1999).

Total household income is thus the measuring stick to determine whether individuals and families fall below the poverty line. Households under specific income levels are considered poor. To account for the factor of inflation, the poverty thresholds are adjusted each year in accordance with consumer price index changes. The level itself also varies depending on household size. For example, in 2001, a household of one was considered poor if its income fell below $9,039; for a household of two, the level was $11,569; for a household of three, $14,128; for a household of four, $18,104; and so on (U.S. Bureau of the Census, 2002b).

Cross-Sectional Rates

Each year, a representative sample of approximately 50,000 to 60,000 U.S. households is included in the U.S. Bureau of the Census’s Current Population Survey. One of its purposes is to gather information regarding individual and household income. From these data, analysts estimate the scope of poverty in the United States and track changes in the official poverty rate.

In 1959, the U.S. poverty rate stood at 22.4% (U.S. Bureau of the Census, 2002b; although the measure was created in 1964, it was backdated to 1959). During the 1960s, the rate fell sharply, such that by 1973 it had reached a low of 11.1%. Since 1973, the poverty rate has fluctuated between 11% and 15%. It has tended to rise during periods of economic recession (early 1980s, early 1990s) and has fallen during periods of economic expansion (middle to later 1980s, middle to later 1990s).

The poverty rate in 2001 stood at 11.7%, which represented 32.9 million Americans (U.S. Bureau of the Census, 2002b). The percentage of the population falling into poverty or near poverty (125% of the poverty line) was 16.1% (or 45.3 million Americans), whereas 4.8% of the population, representing 13.4 million Americans, experienced extreme poverty (falling below 50% of the poverty line).

Longitudinal Dynamics

Beginning in the 1970s, researchers have increasingly sought to uncover the longitudinal dynamics of poverty. These studies have used several nationally representative panel data sets, including the Panel Study of Income Dynamics (PSID), the National Longitudinal Survey of Youth (NLSY), and the Survey of Income and Program Participation (SIPP). Results from these longitudinal analyses have shed considerable light on the patterns of U.S. poverty. Several broad conclusions can be drawn from this body of work.

First, most spells of poverty are fairly short. The typical pattern is that households are impoverished for 1 or 2 years and then manage to get above the poverty line (Bane & Ellwood, 1986; Blank, 1997; Duncan, 1984; Walker, 1994). They may stay there for a period of time, only to experience an additional fall into poverty at some point (Stevens, 1999). Because their economic distance above the poverty threshold is often narrow, a detrimental economic event such as the loss of a job or the breakup of a family can easily throw a family back below the poverty line (Duncan et al., 1995).

In contrast, a much smaller number of households experience chronic poverty for years at a time. Typically, they have characteristics that put them at a severe disadvantage vis-à-vis the labor market (e.g., individuals with serious work disabilities, female-headed families with large numbers of children, racial minorities living in inner-city areas). Their prospects for getting out of poverty for any significant period of time are severely diminished (Devine & Wright, 1993).

And of course, some individuals and households fall in between these two ends of the spectrum. For example, Blank (1997) relied upon the Panel Study of Income Dynamics (PSID) data to calculate the occurrence of poverty over a 13-year span. She found that during the period of 1979 to 1991 one third of Americans experienced a spell of poverty. However, of those who fell below the poverty line, one half were poor for 3 years or less, one third were in poverty for between 4 and 9 years, and 14.6% fell below the poverty line for 10 of the 13 years (4.5% of the poor fell below the poverty line for each of the 13 years).

Finally, research into the dynamics of poverty has also shown that many households will reexperience poverty in the future. Using annual estimates of poverty from the PSID data, Stevens (1994) calculated that of all persons who had managed to get themselves above the poverty line, over half would return to poverty within 5 years.

The picture of poverty drawn from this body of research is thus characterized by fluidity. Individuals and households tend to weave their way in and out of poverty, depending upon the occurrence or nonoccurrence of particular detrimental events (e.g., job loss, family disruption, ill health). Similar findings have been obtained with respect to the longitudinal patterns of welfare use (Bane & Ellwood, 1994; Blank, 1997; Duncan, 1984; Rank, 1985, 1994a).

Comparative Studies

A third body of research examining the scope and dynamics of poverty has focused on how U.S. rates of poverty contrast with those of other countries, specifically, other industrialized nations. Several problems have made such comparisons difficult. First and foremost has been the lack of analogous data sets large enough to allow for such an analysis. Fortunately, this obstacle has been partially overcome with the Luxembourg Income Study (LIS). Initiated in the 1980s, the LIS contains income and demographic information on households in 25 different nations from 1967 to the present. Variables have been standardized across 70 data sets, allowing researchers to conduct cross-national analyses regarding poverty and income inequality.

Impoverishment in the United States exceeds that of all similar countries. Smeeding, Rainwater, and Burtless (2001) compared the rates of poverty among 18 developed nations, using two relative measures of poverty along with an absolute measure. All three measures showed a similar pattern. For example, by defining poverty as the percentage of persons living with incomes below 50% of the median income, the authors found that the U.S. rate of 17.8% was substantially above those found in the other 17 nations. Italy was next at 13.9%, followed by the United Kingdom, Canada, and Spain, with the Scandinavian and Benelux countries falling near the bottom. The overall average for the 18 nations was 8.6%. Similar findings were found for children and the elderly. What is startling about these results is that the United States is also the wealthiest nation in the world.

This paradox is revealed in additional LIS analyses of how well children and adults from middle and upper incomes do. Not surprisingly, the United States has the highest standards of living at these points in the income distribution scale. The conclusion to be drawn from these divergent patterns regarding American children is stated by Rainwater and Smeeding (1995):

In other words, while the United States has a higher real level of income than most of our comparison countries it is the high and middle income children who reap the benefits (and much more the former than the latter). Low income American children suffer in both absolute and relative terms. The average low income child in the other 17 countries is at least one-third better off than is the average low-income American child. (p. 9)

Two reasons stand out as to why Americans at the lower end of the economic distribution do so badly when compared to their counterparts in other countries. First, the social safety net in the United States is considerably weaker than in other Western industrialized countries. Second, the United States is plagued by relatively low wages at the bottom of the income distribution scale when compared to other developed countries (Smeeding, 1997; Smeeding et al., 2001). These factors contribute to both the relative and absolute depths of poverty in the United States as compared with other industrialized nations (for additional work, see Oyen, Miller, & Samad, 1996; United Nations Development Programme, 2000, 2003).

Life Course Risk

A final approach for assessing the scope of American poverty has been to analyze poverty as a life course event. Specifically, how likely is it that an American will experience poverty during his or her lifetime? Some of the earliest social scientific work on poverty attempted to place it within a life course framework. Seebohm Rowntree’s (1901) description of 11,560 working-class families in the English city of York was pioneering in developing this approach. Likewise, Robert Hunter, in his book Poverty (1904), attempted to locate impoverishment within the context of the life course.

Despite these early writings, examining poverty as a potential life course event has been largely overlooked in the research community. The work of Rank and Hirschl has recently employed this approach. Relying upon the PSID, they have constructed a series of life tables estimating the likelihood of poverty across the American life course.

Their results indicate that between the ages of 20 and 85, two thirds of Americans will experience at least 1 year of impoverishment (Rank & Hirschl, 1999c). The odds of encountering poverty across adulthood are significantly raised for African Americans and those with lower levels of education (Rank & Hirschl, 2001c). Those who experience poverty do so for generally 1 or 2 consecutive years. However, once an individual experiences poverty, he or she is quite likely to encounter poverty again (Rank & Hirschl, 2001b). Similar patterns have been found regarding the use of welfare across the life course (Rank & Hirschl, 2002).

Rank and Hirschl’s analyses (1999a, 1999b) also indicate that poverty is prevalent during the periods of childhood and old age. Between the ages of 1 and 17, 34% of American children will have spent at least 1 year below the poverty line, and 40% will have experienced poverty or near poverty (125% of the poverty line). Similarly, 40% of the elderly will encounter at least 1 year of poverty between the ages of 60 and 90, while 48% will encounter poverty at the 125% level.

For the majority of Americans, it would appear that the question is not if they will encounter poverty but rather when. The experience of poverty can thus be viewed within the wider context of the life course as a normative American event. Rank and Hirschl (2001a) argued that understanding poverty from such a perspective entails a fundamental shift in the perception and meaning of poverty (for further work applying a life course perspective to poverty, see Leisering & Leibfried, 1999).

Factors Associated with Poverty

A second area of research has examined the factors and causes underlying poverty. As O’Connor (2001) noted, the thrust of this research has shifted from an examination into industrial capitalism as a fundamental cause of poverty at the turn of the century to a highly technical analysis of the demographic and behavioral characteristics of the poor (particularly welfare recipients) by the end of the 20th century. One of the reasons for this shift has been the growing importance of survey research, which has become the dominant methodological tool in the social sciences. Such an approach lends itself to an empirical analysis of individual characteristics rather than the structural conditions underlying poverty. For example, race and gender are often treated as demographic attributes to be controlled for within multi-variate models rather than as dimensions of social and economic stratification in their own right (O’Connor, 2001).

Individual Factors


The notion of poverty resulting from individual character flaws goes back hundreds of years. Survey research confirms that a majority of Americans continue to believe that this is a very important reason for the existence of poverty (Feagin, 1975; Gans, 1995; Gilens, 1999; Kluegel & Smith, 1986; Smith & Stone, 1989; Wolfe, 1998). In particular, the argument has been that the poor lack the correct attitudes, motivation, or morals to get ahead (Schwartz, 2000).

Researchers who have examined the attitudes of the poor have found little evidence for this position (Dunbar, 1988; Duncan, 1984; Edwards, Plotnick, & Klawitter, 2001; Goodwin, 1972, 1983; Rank, 1994a, 1994b; Seccombe, 1999). Contrary to popular opinion, the poor tend to amplify and reiterate mainstream American values such as the importance of hard work, personal responsibility, and a dislike of the welfare system. Although poverty is accompanied by increasing levels of stress and frustration (discussed later, in the section “The Effects and Consequences of Poverty”), the vast majority of the poor express a set of core attitudes and motivations similar to those found in middle-class America (Lichter & Crowley, 2002).


A variation of the above perspective has been that individual attitudes and behaviors have been negatively altered as a result of public assistance: specifically, that various welfare programs have created work and marriage disincentives, which in turn have encouraged dependency upon the government, along with counterproductive behaviors such as teenage pregnancy and marital disruption, and that these behaviors have then trapped individuals and families into a cycle of poverty. This position also goes back hundreds of years (Tocqueville, 1983) and has been articulated more recently by Charles Murray in his book Losing Ground (1984; in addition, see Mead, 1986; Olasky, 1992).

Extensive research has been conducted over the past 30 years into the effects of welfare programs upon individual and family behavior. The vast majority of this research indicates that although the welfare system (specifically AFDC) has had a minor impact upon work incentives and several areas of family formation (e.g., marital dissolution), in general the overall effect have been quite small in terms of altering individual and family behavior and/or fostering dependency and consequently poverty (Bane & Jargowsky, 1988; Blank, 1997; Moffitt, 1992; Rank, 1989; Rank & Cheng, 1995). As Bane and Ellwood (1994) noted, “Although theories about welfare effects … are forcefully argued, existing evidence is quite limited. In the case of welfare, the bulk of evidence to date has shown only small effects” (p. 120).

One reason for this has been that the amount of income and/or in-kind assistance available from the U.S. welfare system has been historically quite small (particularly in comparison to that provided in other industrialized countries). Furthermore, the 1996 welfare reform changes have resulted in a system that is even less generous. In short, the argument that poverty has been created and exasperated by the generosity of the U.S. welfare system has found little empirical support from the research community.

Human Capital

The importance of human capital in affecting earnings (and consequently the risk of poverty) has been studied extensively within the labor economics and social stratification literatures. The argument is that individuals acquiring greater human capital will be in greater demand in the marketplace (Becker, 1964). As a result, they will be able to pursue more lucrative careers resulting in higher-paying and relatively stable jobs. Those lacking in human capital are not able to compete as effectively in the labor market and therefore must settle for unstable, low-wage work.

The effect of human capital upon the risk of poverty has been shown to be substantial (Schiller, 2004). In particular, greater levels of education, skills, and training are strongly associated with higher levels of earnings. Conversely, those lacking in marketable job skills and education are at a much greater risk of experiencing poverty.

In addition, several other individual and family characteristics have been shown to be important factors in increasing or decreasing the risk of poverty. These include race, gender, work disability, family structure, number of children, residence, and age. All of these can be conceptualized as affecting the ability to interact with and take advantage of opportunities in the labor market. Specifically, poverty rates tend to be higher for minorities, women, those with work disabilities, single-parent families, households with large numbers of children, families in economically depressed areas such as inner cities or remote rural locations, and younger adults (U.S. Bureau of the Census, 2002b).

Cultural and Neighborhood Factors

A second level of analysis has addressed the importance of cultural and neighborhood factors in maintaining poverty. The focus is on the residential environment and its influence in shaping the way in which families cope and adjust to that environment.

Culture of Poverty

The culture-of-poverty framework arose from the ethnographic work of Oscar Lewis. His study Five Families (1959) examined lower-class Mexican family life, and a later work, La Vida (1966b), focused on Puerto Rican families residing in slum communities in both New York City and Puerto Rico. Lewis argued that chronic conditions of high unemployment and underemployment, coupled with little opportunity for upward mobility, had led to a culture of poverty within approximately 20% of the U.S. poor population. Such a culture was most likely to arise in economically depressed and isolated areas such as Appalachia or urban inner cities. This culture provided individuals and families with a means for coping with their impoverished situations. Traits included a present-time orientation, stronger networks of kinship ties, and an unwillingness to delay gratification. As Lewis (1966a) wrote, “It is both an adaptation and a reaction of the poor to their marginal position in a class-stratified, highly individuated capitalistic society…. Once the culture of poverty has come into existence it tends to perpetuate itself” (p. 22). Such a culture enabled families to cope and adapt to their environment, but it also made it more difficult for them to eventually break out of poverty.

The culture-of-poverty thesis exerted a significant impact on social policy in the 1960s. Policy initiatives and programs arising out of the War on Poverty, such as the Moynihan Report, Head Start, and community action, were all influenced by the concept of a culture of poverty. However, empirical verification of the theory failed to materialize, and the culture-of-poverty thesis fell out of favor by the early 1970s. It was not until the work of William Julius Wilson that the concept was seriously revisited.

Social Isolation

Wilson (1987, 1996) sought to provide a framework for understanding the increasing social problems and poverty found in the inner city over the past 30 years. In particular, his concern was with the underclass, or “the truly disadvantaged.” Wilson argued that many of the problems found in the inner city of today are the result of neighborhoods’ becoming more socially isolated from mainstream behavior while at the same time experiencing a greater concentration of deviant behavior. These two trends have arisen as a result of the loss of decent-paying jobs, along with the migration of the black middle and working class out of the inner city.

The effect of social isolation and the concentration of deviant behavior have led to the rise of what Wilson referred to as a ghetto-specific culture. This culture includes the acceptance of behaviors such as out-of-wedlock births, welfare dependency, and crime, which in turn have made escaping from poverty more difficult. Yet Wilson argued that the ultimate solution to inner-city poverty must lie in providing decent economic opportunities within these neighborhoods. When opportunities are provided, the current ghetto-specific culture and its counterproductive behaviors will quickly fade.

The work of Elijah Anderson (1990, 1999) has explored the role of culture and social isolation in helping to explain inner-city poverty and its accompanying social problems. Anderson’s ethnographies have provided in-depth qualitative material that has generally been consistent with Wilson’s overall thesis (for a review of the line of research focusing on social isolation, culture, and inner cities, see Small & Newman, 2001).

Residential Segregation

A third neighborhood factor posited as critical for understanding the causes of poverty within the urban black family has been that of racial residential segregation. Douglas Massey has been at the forefront of this research. This body of work has demonstrated that residential segregation on the basis of race is widespread, leading to deteriorating economic and social conditions within such neighborhoods. As Massey and Denton write in American Apartheid (1993):

Deleterious neighborhood conditions are built into the structure of the black community. They occur because segregation concentrates poverty to build a set of mutually reinforcing and self-feeding spirals of decline into black neighborhoods. When economic dislocations deprive a segregated group of employment and increase its rate of poverty, socioeconomic deprivation inevitably becomes more concentrated in neighborhoods where that group lives… Segregation is the missing link in prior attempts to understand the plight of the urban poor. (pp. 2–3)

Residential segregation restricts the opportunities available to urban black families through social isolation and increasing levels of deprivation. These, in turn, ensure high levels of poverty and widespread social disorganization (in addition, see Jargowsky, 1997; Yinger, 1995).

Structural Factors

Structural factors represent a third conceptual level for understanding poverty within American families. Rather than looking to the individual or neighborhood, the emphasis is upon the economic, political, and/or social structure as the source of poverty.

Economic Structure

The argument developed by Karl Marx and Friedrich Engels (1968) during the middle 19th century and continuing through the more recent class analysis literature (Wright, 1994) has been that poverty is a direct result of the capitalist economic structure. Businesses are profit driven yet at the same time constrained by the laws of competition. To abide by both of these imperatives, businesses keep labor costs as low as possible by paying workers substandard wages while continually seeking out labor-saving devices, such as automation, and sending jobs overseas. This results in significant economic vulnerability for a segment of the population that Marx and Engels referred to as the industrial reserve army. As a result of their vulnerable position in the economy, these individuals and families are often at the edge of poverty.

A second economic perspective to explain poverty among American families has been that of the dual labor market. This argument rests on the assumption that there are two distinctly different labor markets operating in the American economy, the primary and secondary labor markets. In the primary market, jobs are characterized by stability, relatively high wages, and good working conditions. Jobs in the secondary labor market are more likely to have poor working conditions, marked by instability and low wages. Individuals with less marketable skills, education, and characteristics often find themselves working in the secondary labor market. As Hodson and Kaufman (1982) noted, “[O]nce workers enter the secondary market, they acquire unstable work histories” (p. 730). Employers in the primary labor market then use these histories as evidence that the workers are inadequate and thus block them from moving into the primary market (Doeringer & Piore, 1975). Such individuals will likely remain in secondary jobs during their adult working careers, resulting in an elevated risk of poverty throughout their lives.

Empirical work into these areas has been relatively sparse but has generally confirmed the existence of the above dynamics. As Beeghley (2000) summarized, “[T]he structure of the economy insures that millions of people will be poor no matter how hard they work, no matter what their skills, no matter how much they try. This fact exists independently of their individual efforts” (p. 252).

Social and Political Structure

Beginning with Davis and Moore’s (1945) functional theory of social stratification and continuing through the work of Gans (1972, 1995), an argument has been made that poverty serves a number of economic, social, and political functions for society in general and for the middle and affluent classes in particular. As a result, poverty is conceptualized as a vital component of the social structure. For example, the existence of the poor ensures that there will be a labor pool to work at undesirable but necessary jobs (e.g., fast food, janitorial work). In addition, such jobs pay low wages, thereby keeping the costs of these services down for the rest of society. From this perspective, poverty is the result of a system of social stratification that guarantees that a certain percentage of the population will be economically unstable.

In a somewhat similar fashion, the role of racial and gender discrimination can be understood. Substantial research has shown that economic, social, and political discrimination remains prevalent in American society, largely to the benefit of the white male population (Feagin, 2000). Such discrimination has disproportionately affected the life chances of racial minorities and women, resulting in higher rates of poverty among these groups. Likewise, the concept of social exclusion has been used particularly in a European context to understand the existence of poverty (Barnes et al., 2002; Bhalla & Lapeyre, 1999; Sen, 1992, 1999).

A social policy factor that has been examined to explain American poverty has been the weakness of its social safety net. Contrary to the popular rhetoric of vast amounts of tax dollars being spent on public assistance (as argued earlier in the section “Welfare”), the American welfare state can more accurately be described as minimal when compared to the expansive support provided by other industrial countries (Esping-Andersen, 1990). In addition, the United States has failed to offer the type of universal coverage for child care, medical insurance, or child allowances that most other developed countries routinely provide. The result is that social policies aimed at economically vulnerable populations in Europe and Canada substantially reduce the extent of poverty, whereas American social policy only minimally protects families from poverty (Ritakallio, 2001).

Structural Vulnerability

An approach that bridges the empirical importance of human capital, with the significance of structural forces, has been my concept of structural vulnerability (Rank, 1994a, 2000, 2004). This approach recognizes that human capital is associated with who loses in the economic game (and hence is more likely to experience poverty) but that structural factors predominately ensure that there will be losers in the first place. Those who experience poverty are likely to have characteristics that put them and their families at a disadvantage in terms of competing in the economy (e.g., lower education, fewer skills, single-parent families, minorities in inner cities, younger adults). However, given the lack of enough decent-paying jobs for everyone (along with many other structural factors restricting economic opportunities), a certain percentage of the population will experience economic vulnerability regardless of what their characteristics are. Consequently, although a lack of human capital and its accompanying vulnerability lead to an understanding of who the losers of the economic game are likely to be, the more structural components of our economic, social, and political systems explain why there are losers in the first place.

An analogy illustrates this concept. Imagine a game of musical chairs in which there are 10 players but only eight chairs. On one hand, individual success or failure in the game will depend upon the skill and luck of each player. Those who are less agile or less well placed when the music stops are likely to lose. These are appropriately cited as the reasons that a particular individual has lost the game. On the other hand, given that there are only eight chairs available, two players are bound to lose regardless of their individual characteristics. Even if all the players were suddenly to double their speed and agility, there would still be two losers. From this broader context, the characteristics of the individual players are no longer important in terms of understanding that the structure of the game ensures that someone will lose.

The structural vulnerability perspective thus recognizes the importance of human capital characteristics in influencing the risk of individual poverty but places the existence of such poverty within the broader context of the wider social and economic environment. Thus the causes of poverty will shift depending on whether one chooses to analyze the losers of the game or the game itself (for further detail, see Rank, 2003, 2004; Rank, Yoon, & Hirschl, in press).

The Effects and Consequences of Poverty

A third major stream of research has analyzed the effect of poverty on individuals and families. The damaging effects of American poverty were documented over 100 years ago in Jacob Riis’s landmark book, How the Other Half Lives (1890/1972), which detailed the impoverished conditions of tenement families in an area known as “the Bend” in New York City. More recently, the 1962 publication of Michael Harrington’s book The Other America raised the nation’s consciousness regarding the human pain associated with poverty. Since the early 1960s, an enormous amount of research has examined both the costs and consequences of American poverty.

Individual Effects

One of the most consistent findings in epidemiology has been that the quality of an individual’s health is negatively affected by lower socioeconomic status, particularly impoverishment (Kawachi & Kennedy, 2002; Kawachi, Kennedy, & Wilkinson, 1999; Smith, 1999). Poverty is associated with a host of health risks, including elevated rates of heart disease, diabetes, hypertension, cancer, infant mortality, mental illness, undernutrition, lead poisoning, asthma, and dental problems (Lichter & Crowley, 2002; Sherman, 1994; Williams & Collins, 1995). The result is a death rate for the poverty stricken that is approximately three times higher than that for the affluent between the ages of 25 and 64 (Pappas, Queen, Hadden, & Fisher, 1993). As Leidenfrost (1993) noted, “Health disparities between the poor and those with higher incomes are almost universal for all dimensions of health” (p. 1).

These effects are particularly profound with regard to children (Seccombe, 2000). Poor infants and young children are much more likely to have lower levels of physical and mental growth (as measured in a variety of ways) than their nonpoor counterparts (Duncan & Brooks-Gunn, 1997). Both the duration and depth of poverty intensify these effects (McLeod & Shanahan, 1993; Smith, Brooks-Gunn, & Klebanov, 1997). The result is that poverty can have long-lasting physical and mental consequences as children become adults.

In a similar fashion, research has demonstrated that poverty negatively affects the acquisition of human capital. Various analyses have indicated that differences in parental economic and social class result in significant differences in resources and opportunities for children (Corcoran, 1995, 2001; McMurrer & Sawhill, 1998). For example, the quality and quantity of education that a child receives is strongly influenced by the level of parental income. Children in poverty are more likely to receive an inferior education, which then affects their ability as adults to compete effectively in the labor market (Duncan, Yeung, Brooks-Gunn, & Smith, 1998).

Family Effects

The likelihood of marriage is substantially reduced among the poverty stricken (Cheal, 1996). This is because individuals contemplating marriage are seeking, or often desire to be, an economically secure partner (Becker, 1981). Poverty undermines the availability of such partners. Hence, individuals in these situations are more likely to forego marriage.

Most recent and well known within this vein of research has been the work of Wilson (1987, 1996). As noted earlier, his analyses have addressed the increasing problems found within the inner city among African Americans and the reasons why such problems appear to have worsened over the past three decades. According to Wilson, a critical factor in understanding the falling rate of marriage within the inner-city population has been the economic restructuring that has resulted in the movement of capital and job opportunities out of central-city areas.

Women at lower income and educational levels also tend to have children at earlier ages and are more likely to bear children out of wedlock (Maynard, 1997). For example, the fertility rate per 1,000 unmarried women aged 18 to 24 is 300.9 for those with 0 to 8 years of education, 123.5 for those with 12 years of education, and 23.7 for those with 13 to 15 years of education (National Center for Health Statistics, 1997).

Several ethnographic studies over the past four decades have indicated that those in poverty are more likely to use a larger network of kinship than the nonpoor to exchange resources and services. This extended network has served as a coping mechanism for dealing with the uncertainties and hardships of poverty (e.g., Edin & Lein, 1997; Harvey, 1993; Kwong, 2001; Lewis, 1966a; Stack, 1974). For example, Carol Stack (1974) found in her study of a poor, black community called The Flats that it was virtually impossible for families to cover their various expenses and needs completely on their own. Consequently, a system of collective sharing arose within The Flats as an adaptive strategy to survive the daily uncertainties and depravation of poverty. As Stack wrote:

In the final months of my life in The Flats, I learned that poverty creates a necessity for this exchange of goods and services. The needs of families living at bare subsistence are so large compared to their average daily income that it is impossible for families to provide independently for fixed expenses and daily needs. Lacking any surplus of funds, they are forced to use most of their resources for major monthly bills: rent, utilities, and foods. After a family pays these bills they are penniless. (p. 29)

This system of exchange encompassed a wide network of kin and friends. Only through such a collective response were families able to get through the daily trials and tribulations of long term poverty.

Likewise, in Harvey’s (1993) study of a white, displaced farming population that had located in a community called Potter Addition, a similar process of mutual sharing and obligation developed across a wide network of kin. Family and kin members could be counted on to help in various situations, just as they themselves would be counted on for mutual assistance by others.

Research has consistently found that poverty and lower income are associated with greater levels of marital stress, dissatisfaction, and dissolution (U.S. Bureau of the Census, 1992; Vosler, 1996; Voydanoff, 1990; White & Rogers, 2000). In essence, poverty and low income act to amplify the daily stress found in everyday life and its relationships. Married couples in poverty face mounting economic stress that subsequently lowers their levels of marital happiness and well-being (Conger, Ge, & Lorenz, 1994; Shirk, Bennett, & Aber, 1999). This in turn increases the likelihood that couples will attempt to resolve such dissatisfaction through separation and/or divorce.

Largely as a result of the aforementioned stresses and economic strains, lower socioe-conomic status is associated with higher levels of domestic violence (Gelles, 1993; Moore, 1997; Sedlak & Broadhurst, 1996; Straus, Gelles, & Steinmetz, 1980). This is particularly true in understanding men’s violence against their wives (Anderson, 1997).

In addition to the direct effects upon the family, research has also examined the effect that high rates of neighborhood poverty have on the viability of the community, which in turn influences the viability of the family (Brooks-Gunn, Duncan, & Aber, 1997; Burton & Jarrett, 2000). Major research areas have included the relationship between neighborhood poverty and elevated rates of crime (Sampson, Raudenbush, & Earls, 1997), neighborhood poverty and declining social capital (Putnam, 2000), and neighborhood poverty and the increasing risk of environmental hazards (Bullard, 1990). All of these have been shown to have a detrimental impact on the health and functioning of low-income families residing in impoverished neighborhoods.

Ameliorating Poverty

At the heart of the policy analysis community is the question of how best to help American families below the poverty line. A number of programs have been proposed and implemented during the past 40 years. Three of the more influential approaches for economically assisting low-income families are discussed next. Each has been gaining in political importance over the past decade, carries a bipartisan appeal, and has been supported with empirical research.

Earned Income Tax Credit

During the past 25 years, the American economy has increasingly produced larger numbers of jobs that are low paying, part time, and/or lacking in benefits (Bartik, 2001; Ellwood, 2000). Studies analyzing the percentage of the U.S. workforce falling into the low-wage sector of the economy have shown that a much higher percentage of Americans (25 percent of all full-time workers) are employed in low-wage jobs compared with an average of 12.9 percent for workers in other industrialized countries (Smeeding et al., 2001).

The Earned Income Tax Credit (EITC) represents a social and economic policy that partially offsets this pattern. The EITC was enacted in 1975 and underwent a significant expansion during the 1990s. It currently represents the largest cash antipoverty program in the United States. The program is designed to provide a refundable tax credit to low-income workers, with the vast majority going to families with children. For example, a parent with two children, employed at $8 an hour, would receive an additional $3.20 an hour from the government through the EITC. The program thus provides a significant supplement to low earners. In 2002, more than 19 million households received EITC tax credits averaging $1,700 (Schiller, 2004).

The EITC appeals to both liberals and conservatives. As Danziger and Gottschalk (1995) wrote, “It has retained bipartisan support because of a number of its features: it assists only those who work; it helps two-parent as well as single parent families; it raises the employee’s take-home pay without increasing the employer’s labor costs” (p. 158). In addition, it has helped to offset the above mentioned trend since the early 1970s of declining real wages among low-skilled workers.

According to Schiller (2004), approximately 2 million more individuals would have fallen below the poverty line without the EITC program. For families remaining in poverty, the EITC has helped to reduce the distance between their household income and the poverty line. It has also enabled families to purchase particular resources that can improve their economic and social mobility (e.g., pay tuition, purchase a car, and change residence), as well as helping to meet daily expenses (Smeeding, Phillips, & O’Connor, 2000).

Child Support

Child support and its enforcement has become an increasing American concern. Beginning with the work of Weitzman (1985), the economic impact of divorce and single parenthood upon women and their children has been extensively documented (McLanahan & Sandefur, 1994). This body of work has demonstrated that newly created female-headed families with children are at a significant risk of poverty. One of the reasons for this is that mothers often fail to receive their court-ordered child support payments. For example, in 1999, 45.9% of mothers received the full amount of court-ordered child support payments, 28.7% received only partial payment, and 25.4% received no payment. Of the $29.5 billion that was due in child support payments in 1997, $17.6 billion were actually received (U.S. Bureau of the Census, 2002a).

From the mid 1970s onward, a series of changes in federal laws have attempted to make child support enforcement more effective (Institute for Research on Poverty, 2000). This was particularly true of the 1996 welfare reform changes. States are required to operate a child support program that meets federal mandates (e.g., expanded efforts in income withholding, paternity establishment, enforcement of orders, and use of central registries). Failing to do so disqualifies a state from block grant monies under the Temporary Assistance for Needy Families program (TANF). Although these initiatives are at a beginning stage, evidence suggests that there has been an increase in the amount of child support received by divorced and never-married mothers (Sorenson & Halpern, 1999).

Several researchers have noted the importance of extending these policies beyond child support enforcement. For example, Garfinkel (1992) has argued that the present system should be strengthened into a child support assurance program that would provide far greater protection for mothers and their children. Such a system would contain three key elements. First, the noncustodial parent would pay a set percentage of his or her income for child support. Second, the support payments would be automatically withheld from the nonresident parent’s paycheck in the same manner as Social Security payments. Third, a minimum benefit would be assured. If nonresident parents were not making enough income to meet this benefit level, the government would make up the difference. Garfinkel (1998) argued that such a system would significantly reduce poverty among mothers and their children. Various simulations have resulted in a range of poverty reductions resulting from such a system.

Asset Development

Building the assets of low-income families is another innovative step toward economically assisting impoverished families. This approach has been developed and brought into the policy arena by Michael Sherraden (1991, 2000, 2001). Sherraden (1991) argued that government policy should provide incentives and resources that would allow low-income families to build their economic assets, much as it does for middle- and upper-class families (e.g., home mortgage tax deductions, lowered capital gains tax). His assertion was that “asset accumulation and investment, rather than income and consumption, are the keys to leaving poverty” (p. 294). Thus, government policies should attempt to facilitate the building of individuals’ and families’ resources through the process of asset accumulation.

To accomplish this, Sherraden formulated the concept of Individual Development Accounts (IDAs), which allow poor individuals and families to participate in matched savings accounts, with the match being at least one to one and often much higher. Accumulated assets in these accounts can then be used for a broad array of development purposes that are intended to strengthen a family’s economic position. As Sherraden (2000) noted, IDAs have been introduced as a matched saving strategy to show that the poor can accumulate assets if they, like the middle and upper classes, have incentives and opportunities. IDAs are special saving accounts, started as early as birth, with savings matched for the poor, to be used for education, job training, home ownership, small business, or other development purposes. IDAs can have multiple sources of matching deposits, including governments, corporations, foundations, community groups, and individual donors. (p. 161)

The 1996 federal welfare reform legislation included a provision allowing states to use part of their block grant money to establish and fund IDAs. Presidents Clinton and Bush have demonstrated strong support for the concept, and 44 states have some form of IDA policy. The concept is also gaining ground in countries such as Canada, Taiwan, and the United Kingdom. Early evidence from a large demonstration project in the United States indicates that IDAs enable poor families to save and accumulate assets (Schreiner et al., 2002).

Future Research Directions

In looking back over the past 40 years, much has been learned regarding poverty and its effect on American families. This body of research has greatly facilitated our understanding of the dynamics related to impoverishment. Yet at same time, much of our understanding remains cursory. Perhaps this is to be expected given that the dominant analytical and methodological approach over this period of time has been multivariate modeling of survey data. When applied to describing the occurrence and timing of events, this approach is appropriate and revealing. When applied to understanding the meaning and processes behind these events, it often comes up short.

Future research must strive to lift our understanding to a more insightful level. I suggest three avenues to facilitate this. The first is methodological. Social realities, including family poverty, are nuanced and complex. Research methods should reflect this complexity through a range of approaches (e.g., in-depth interviewing, experimentation, focus groups, panel surveys, participant observation, and life histories). Relying on a single methodology reveals a mere slice of reality. It is time to greatly expand our methodological imagination.

In addition to using a wider array of methodologies, researchers should strive to incorporate multiple methods into their research designs. Such designs have numerous advantages over single-method approaches (Rank, 1992). For example, researchers might construct a research design that contained a large-scale survey but also incorporated in-depth interviewing of a selected subsample and participant observation. Such triangulation holds the promise of a more nuanced and deeper meaning of poverty and how it influences families.

A second avenue for enhancing our knowledge is through a deeper conceptual and theoretical understanding of poverty. The heavy reliance upon survey research has resulted in an inordinate amount of attention focused on the association of individual and household characteristics with the risk of poverty. Yet this largely overlooks an equally important dynamic. That is, although American social scientists have addressed who loses out at the economic game, they have largely ignored the question of why there are losers in the first place.

There is thus a need for future theoretical and analytical work to more thoroughly examine the structural components of poverty. Such work would help close a gap in the knowledge base as to why so many American families find themselves below the poverty line. In addition, such work could be further enhanced by exploring the relationships between the structural causes of poverty, the influence of neighborhoods, and the role of individual factors.

Finally, a third avenue for enriching the field is enhancing our ability to articulate the importance of poverty to the wider American society (Rank, 2004). This involves framing our research in different ways. Rather than focusing simply upon poor families, we also need to consider the relevancy of such conditions for America at large. As O’Connor (2001) wrote:

The single most important challenge for poverty knowledge in the post-welfare era is to put poverty on the national agenda as a legitimate public policy concern: not in the narrow sense of income deprivation, but as part of the larger problem of the steady and rapid growth of economic, political, and social inequality. (p. 292)

Many other grounds could be explored as well. These might include arguments based on economic costs, social justice, or the responsibilities of citizenship. Understanding and articulating these connections is critical in establishing that American poverty is indeed a cause for concern. Without such an understanding, efforts to reduce or alleviate poverty will continue to fall on too many deaf ears. The ultimate challenge and reward ahead lies in reawakening our collective conscience to the disturbing paradox of poverty within America’s families.