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Reducing Child Poverty in Puerto Rico

The National Academies of Sciences, Engineering, and Medicine have released a report detailing how child poverty in the United States could be cut in half in just a decade. Congress requested the report, which outlines four different paths. Two of the four programs would cut the child poverty rate by 50%, at a cost of about $100 billion dollars. The other two would cost less, and also would accomplish less.

What does child poverty cost?

The costs of child poverty in the United States dwarf the cost of all of the solutions. The report estimates that the cost of having 11 million children living in poverty is somewhere between between $800 billion and $1.1 trillion annually. These figures include the estimated loss of adult productivity in people who grow up in poverty, the costs of additional medical care, and the added costs of crime and law enforcement.

These numbers are for the nation as a whole. Puerto Rico, with a child poverty rate higher than any of the 50 states, is certainly affected by these added costs.

The study identified programs that reduced child poverty and increased well being among children. SNAP, or food stamps, and the Earned Income Tax Credit were two essential programs in this category. The EITC has not yet been extended to Puerto Rico, though many individuals and organizations have recommended that step. As for SNAP, Puerto Rico’s version of food stamps is called NAP, and it is different and unequal to the program in the States.

Public health and housing support were also on the list of beneficial programs. Again, Puerto Rico is not treated equally with the States. The inequality under Medicaid has been in the news frequently of late.

The four programs

The first proposed program centers on increasing work. It is estimated that this program, which increases the minimum wage and extends and expands EITC, would cost $8.7 billion dollars and put one million more workers into the active workforce, would reduce child poverty by less than 20%.

Work-focused programs are appealing, but the report shows that deep reductions in child poverty will also require financial support for poor families.

A program combining tax credit expansions and child allowances could reduce child poverty by 35% and cost $44.5 billion.

With expanded SNAP programs, housing vouchers, and expanded tax credits, child poverty could be reduced by half at the cost of about $90 billion.

A program that encourages work and also includes child support assurance would cost $108.8 billion, and reduce child poverty by 55%.

Other options

The report lists other programs that could help. Better access to contraception and more information about family planning, for example, could reduce the number of children living in poverty. However, the study was only able to show that programs that reduce access to contraception increase child poverty.

Programs designed to strengthen marriage and encourage work, though both stable marriages and working correlate with better outcomes for kids, have failed to decrease poverty. The report reluctantly concluded that the effectiveness of these programs isn’t supported by available data.

The report also concluded that programs focused on education for children could not be included in their plans, since it would take more than 10 years to see the beneficial results.

The report demonstrates that an investment in programs that provide direct financial support for families, possibly along with programs encouraging work, could reduce child poverty by the desired 50% or more within a decade. Some of the needed programs are already in place and could simply be expanded, and some programs would be new to the U.S., though other English-speaking nations are currently using them.

What about Puerto Rico?

The report does not mention Puerto Rico. It mentions the U.S. territories in general only to clarify that information from the territories is not included. But the effective anti-poverty programs mentioned in the report are not available in Puerto Rico to the extent that they are in the States.

The EITC, a tax credit for the working poor, is not applicable in Puerto Rico. The Child Tax Credit is offered only for the third child in a family in Puerto Rico, though families in states can use this credit will all their children.

Medicaid is capped in Puerto Rico, so that the Island receives much less federal support than it would as a State. Puerto Rico ends up paying far more of its public health costs than any State.

These inequalities are at least part of the reason that Puerto Rico’s children are much more likely to live in poverty than those living in states.

Download the report.

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