Economic Outcomes of Long Term Childhood Poverty

The Urban Big Data Centre’s researchers based at the University of Illinois at Chicago are investigating the institutional, geographic and physical contributors of social exclusion, using Agent Based Modelling.

Agent Based Models “simulate the simultaneous operations and interactions of multiple agents [i.e. people, organisations, etc.] in an attempt to re-create and predict the appearance of complex phenomena” – Wikipedia. Using national data about poverty in the U.K. and the U.S., they are working on an Agent Based Model of Social Exclusion, with the open source NetLogo platform as their modelling environment. You can read a summary of the research below and download the full data note by researcher Nebiyou Tilahun (PDF 1.1MB). 

Why do this research?

In any given year, both the U.K. and U.S. have a large part of their population living in poverty. In the UK, 2015/2016 estimates showed 16% of all people living in low income before accounting for housing costs. Even higher poverty rates were recorded among children. The pattern of higher poverty levels among children than adults also holds in the US. For 2016, the U.S. Census Bureau estimated the official poverty rate at 12.7%, and its estimate of poverty among children was 18%.

There is a large body of evidence documenting the negative association between poverty and children's health, nutrition, social and cognitive development, their home and neighborhood environments, and their achievement in school. Recognition of these adverse effects is reflected in a variety of policies. These include the U.K.'s Child Poverty Act of 2010, which set ambitious targets towards dramatically reducing childhood poverty by 2020/2021 (targets that were later abolished by the government in 2016), the Child Poverty Bill being put forward in Scotland to make it the only part of the UK with statutory targets to reduce child poverty by 2030, and a variety of policies and programs in the U.S. across all levels of government.

As part of the ongoing work of the UBDC’s Chicago team to develop an Agent Based Model of Social Exclusion, they have been examining the extent to which childhood poverty experiences, particularly persistent exposure to poverty, affect economic outcomes in adulthood.

How did they do it?

The U.K. sources used are the Understanding Society data and its predecessor the British Household Panel Survey (BHPS). For the U. S., they are using the Panel Study of Income Dynamics (PSID).

They measure the persistence of childhood poverty using the proportion of time a given person was in poverty prior to turning 18 years old. The same metric is used to measure persistence of poverty in adulthood at 18 years old or older.

What did they find?

In the U.K. and the U.S., there is a high chance of experiencing poverty as an adult if you grew up in persistent poverty. For the U.S. in particular, these chances increased along with increases in the proportion of childhood spent in poverty. Marriage, education, and a strong attachment to the labor market were associated with reduced poverty incidence in adulthood. Both living in a low poverty neighborhood and the broader health of the economy, as captured by intergenerational income mobility, were important predictors of reduced adult poverty rates.

There is plenty of additional detail about how this research was carried out, how the data differed between the two countries, what possible policy impact this research could have, and what the more nuanced findings were in the full data note by researcher Nebiyou Tilahun (PDF 1.1MB).

Author: Sarah Currier

As Senior Project Manager, Sarah coordinates the UBDC team to ensure our planning, reporting and delivery meet the needs and expectations of our funders, the ESRC, and the community we serve.

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