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Journal Issue: Opportunity in America Volume 16 Number 2 Fall 2006

"Culture" and the Intergenerational Transmission of Poverty: The Prevention Paradox
Jens Ludwig Susan Mayer

The Poverty-Prevention Paradox

Even if parents' culture as indicated by marriage, work, and religion had a causal effect on children's schooling and adult income— which is uncertain—encouraging parents to marry, work, and become religious would do far less to reduce poverty among future generations of American adults than most policymakers believe. The reason for this conclusion is that children who grow up with parents who are married, working, and religious also face some risk of experiencing poverty as adults. Therefore even successful efforts to change parental behavior or culture among “high-risk” families will have surprisingly modest effects on poverty in the next generation. We term this the poverty-prevention paradox.

To illustrate the paradox, we estimate the expected poverty rates in adulthood of children who grow up with their biological fathers and those who grow up apart from them. We use data from the U.S. Department of Education's National Education Longitudinal Study (NELS) of 1988, which interviewed a nationally representative sample of eighth graders in 1988 and then again in 2000, when participants would have been around twenty-five years old.

According to these data, eighth graders who were living apart from their biological fathers had an expected poverty rate of 16.6 percent when they were twenty-five. In contrast, the poverty rate for eighth graders who were living with their fathers was 9.9 percent. The powerful association between growing up without one's father and being poor as an adult has led many people to conclude that addressing “culture” is the key to reducing poverty in America.

However, the contribution of fathers' absence to overall poverty in the next generation depends not only on the difference in the poverty rates but also on the relative size of these two groups of children. According to the NELS, in 1988, 28 percent of eighth graders were living apart from their biological fathers and 72 percent were living with their fathers. To determine the contribution of each group of children to the overall poverty population in the next generation, we multiply the proportion of children in each family type by the poverty rate for each group by the total number of children in the population. For example, consider a population of 10,000 children (2,800 of whom are raised apart from their biological father and 7,200 of whom are raised with their father). Using the numbers from the NELS data, we see that about 465 children from father-absent families would be poor at age twenty-five (0.28 × 0.166 × 10,000) as compared with 713 children from father-present families (0.72 × 0.099 × 10,000). Note that despite their higher poverty rate, children from father-absent families would account for only 39.5 percent of poor adults (465 divided by 1,178).

Next, we calculate what the size of the poverty population would be if all eighth graders had lived with two biological parents in 1990. Using the same formulas as above and assuming that the poverty rate for all children was the same as the poverty rate of those living with both biological parents, we find that about 990 adults would be poor in the next generation (10,000 × 0.099), a reduction of 188 poor people. Despite the powerful link between family structure and children's chances of being poor as an adult, ensuring that every single eighth grader in the United States lived with his or her biological father would eliminate only around 16 percent (188 divided by 1,178) of poverty in the children's generation—even assuming that the effect of living with one's father is entirely causal, which it almost certainly is not.

This perhaps surprising conclusion holds for our other measures of parent culture as well. For example, similar calculations using NELS data show that ensuring that all eighth graders lived in a household with at least one working adult would lower poverty in the children's generation by 7 percent. Ensuring that all eighth graders participated in religious services would cut poverty in their generation by 9 percent. If eighth graders lived with their biological parents, at least one parent worked, and the child attended religious services, poverty in their generation would fall by 22 percent, assuming that the effects of these indicators of culture on children's poverty status are entirely causal.

One potential limitation of these estimates is that the indicators of culture are measured only in the eighth grade. But even when we use data from the Panel Study of Income Dynamics (which follows children for a longer period than the NELS) to measure these family environments over several years rather than just at a single point in time, poverty in the children's generation does not decline much. It is possible to generate calculations indicating that changing “culture” would cut future poverty dramatically. If no child ever spent time in a household that did not have two married adults, at least one of whom was working, and that did not attend weekly religious services—and if these factors all had a causal effect on the child's chance of being poor—poverty in the children's generation would fall by as much as three-quarters. But setting such a high bar for the “pro-social” ideal would mean that the large majority of American households would not meet this standard and would assume that government interventions were capable of completely eliminating, without exception, such features of modern American life as divorce, job changes, and the choice not to attend religious services each and every week.50