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Low ‐ Income   Working
Families   Fact   Sheet
Families face economic insecurity when their resources are insufficient to meet their needs or when they face a sudden economic shock that is not buffered by a financial or social safety net. Over the course of the Great Recession, economic insecurity increased as the unemployment rate went from
5 percent in December 2007 to 9.5 percent in June 2009.
Although the recession technically ended at that point, unemployment did not peak until October 2009, when it hit 10 percent.
1 As a result, the rate of child poverty increased from 18 percent in 2007 to 22 percent in 2010 and remained about the same in 2011.
2
A large body of literature describes the negative consequences of families’ economic insecurity on children’s health, development, and achievement. Children are especially vulnerable in tough economic times because family resources often need to be diverted away from promoting child health and development to covering basic needs. In addition, the emotional stress parents face can alter their ability to be responsive to their children’s emotional needs, creating behavioral and learning problems.
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This brief presents highlights from “Economic Insecurity in Children’s Lives: Changes Over the Course of the Great
Recession” and documents how many children are facing economic insecurity, how economic insecurity has changed over the course of the Great Recession, and which children were most affected. The brief also examines how many children are receiving public program benefits that provide monetary or in-kind support to families who are economically insecure, how this support has changed over the course of the Great Recession, and whether these programs appear to be meeting the needs of families with children.
Economic Insecurity
Over the course of the Great Recession, economic insecurity increased for children along a number of dimensions.
Between 2007 and 2010, the share of children with a parent who was unemployed or receiving unemployment insurance compensation increased 7 percentage points, from 9 percent to 16 percent. With this rise in unemployment among parents, the rates of child poverty increased, from 18 percent to 22 percent. Moreover, children were more likely to live in food-insecure families. The share of children living in families that were food insecure rose from 13 percent to 22 percent, with a smaller increase in children’s food insecurity. There were also significant increases in the share of children living in households that were doubling up and living in rental housing. Consistent with the increase in unemployment, the share of children with an uninsured parent also grew. Changes in the index of economic security mirrored these patterns. Between
2007 and 2010, the share of children with three or more indicators of economic insecurity increased 6 percentage points from 28 percent to 34 percent.
In addition to increasing economic insecurity, the disparities in each of these indicators went up. Unemployment rates increased the most for children whose parents had low levels of educational attainment and for black and
Hispanic children, exacerbating the persistent and large differences that existed in 2007 across these groups
Before the recession, child poverty rates varied from highs of 52 percent for children whose parents lacked a high school education and 23 percent for those whose parents had a high school degree or some college to a low of 2

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Figure   1.
Share   of   Children   in   Food ‐ Insecure   Households,   2007   and   2010
Low ‐ Income
Working   Families
2
Source:   Urban   Ins tute   analysis   of   the   2007   and   2010   Current   Popula on   Survey   December   Supplement.
*   Increase   within   group   across   me   is   sta s cally   signi fi cant   at   the   p   <   0.05
level.
+   Increase   is   greater   than   that   for   the   comparison   group   (children   whose   parents   have   a   master’s   degree   or   white   children).
percent for children whose parents had a master’s degree or higher. These differences grew over the course of the recession; the child poverty rate increased 8 percentage points for children whose parents had less than a high school education but was virtually unchanged for those whose parents have a master’s degree or higher. Racial differences in poverty were also exacerbated by the recession. Blacks and
Hispanics started with poverty rates almost three times as high as those for white children. During the recession, the poverty rate for black children increased 4 percentage points and the rate for Hispanic children went up 6 percentage points, to end at more than 35 percent for both groups.
Although the increase for blacks did not differ statistically from that for whites, the increase for Hispanics did.
Disparities in food insecurity also increased over the course of the recession. Disparities in food insecurity were large before the recession: close to 27 percent of children whose parents do not have a high school education lived in food-insecure households, compared with 5 percent of children with highly educated parents. Similarly, less than
10 percent of white children lived in food-insecure households, compared with almost 20 percent of black and
Hispanic children. While children whose parents had a master’s degree or higher and white children saw about a 5 percentage point increase in living in a food-insecure household, children with less-educated parents and black and Hispanic children saw increases in food insecurity of more than 12 percentage points (figure 1).
Disparities in the index of economic insecurity also grew over this period (figure 2). The share of children with more than three indicators of economic insecurity increased 8 percentage points or more among those whose parents lacked bachelor’s degrees, compared with a 2 percentage point increase among children whose parents had master’s degrees. Similarly, black and Hispanic children saw the greatest increases in having more than three indicators of insecurity, at 7 and 9 percentage points, respectively.

Low ‐ Income
Working   Families
Figure   2.
Share   of   Children   with   Three   or   More   Indicators   of   Economic   Insecurity,   2007   and   2010
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Source:   Urban   Ins tute   analysis   of   the   2008   and   2011   Current   Popula on   Survey   March   Supplement.
*   Increase   within   group   across   me   is   sta s cally   signi fi cant   at   the   p   <   0.05
level.
+   Increase   is   greater   than   that   for   the   comparison   group   (children   whose   parents   have   a   master’s   degree   or   white   children).
Social Program Participation
Use of social programs including SNAP, public assistance, public housing subsidies, LIHEAP, unemployment insurance, Medicaid, and the free school lunch program all increased over the course of the recession, though to varying degrees. The share of children in families receiving
SNAP increased from 12 percent to 18 percent, while the share of children in households participating in the free lunch program rose by 4 percentage points to 27 percent.
While public assistance receipt started at a fairly low level and remained low, there was a 27 percent increase in the share of children in families receiving public assistance.
Receipt of unemployment insurance compensation in families with children more than doubled between 2007 and
2010, reaching 11 percent in 2010. These increases varied in ways that were relatively similar to the patterns of unemployment, as did increases in the share of children with
Medicaid or CHIP coverage.
The index of social program participation showed increasing use of programs between 2007 and 2010, as would be expected given the patterns seen for the component parts of the index. In 2007, 25 percent of children lived in families that participated in one or two social programs, and 14 percent lived in families that participated in three or more programs. By 2010, 29 percent of all children lived in families that received one or two of these benefits, and 20 percent lived in families that received three or more benefits. Changes in social benefit participation varied by educational attainment of parents, as did the levels of benefit use. While benefit use varied tremendously by race, increases in benefit use were similar across races.
Generally speaking, children in groups that experienced the greatest increase in economic insecurity had the greatest increases in benefit use (figure 3). Among children in families participating in three or more programs, 77 percent had three or more indicators of economic insecurity.
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Figure   3.
Share   of   Children   in   Families   Receiving   Three   or   More   Social   Bene fi ts,   2007   and   2010
Low ‐ Income
Working   Families
Source:   Urban   Ins tute   analysis   of   the   2008   and   2011   Current   Popula on   Survey   March   Supplement.
*   Increase   within   group   across   me   is   sta s cally   signi fi cant   at   the   p   <   0.05
level.
+   Increase   is   greater   than   that   for   the   comparison   group   (children   whose   parents   have   a   master’s   degree   or   white   children).
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At the same time, almost a quarter of children in families with three or more markers of insecurity were receiving no benefits at all.
Conclusions
The Great Recession took an enormous toll on children’s lives. In addition to the overall increase in economic insecurity that occurred, the large disparities that existed before the recession were exacerbated. Use of public programs designed to lessen these effects increased over the same period, and these increases were largely concentrated in the groups of children who started off with the highest levels of economic insecurity and who were hit hardest by the recession. Thus, the data indicate that safety net programs were responsive to changes in economic circumstances. Still, it is impossible to know whether the programs provided an adequate safety net, and many children lived in families that were facing multiple markers of economic insecurity and receiving no public benefits.
The work presented here presents a snapshot of children’s economic insecurity in 2007 and 2010, but does not cover all dimensions of economic insecurity nor all children affected by hardship and instability during the recession. Some families that lost ground in the recession may have recovered by 2010, while others have been set back by the continuing economic stagnation after 2010.
In addition to facing unemployment and poverty over the course of the recession, families experienced large losses in wealth. Like the other effects of the recession, these losses were not evenly felt. While white families saw their wealth decline by 11 percent, Hispanic families had losses of 40 percent and black families had losses of 31 percent, again widening the enormous disparities in wealth accumulation that existed before the recession (McKernan et al.
2013). At the peak of the recession, 20 percent of households—particularly those with low levels of education—saw their income drop by 25 percent or more from one year to

Low ‐ Income
Working   Families   the next, without adequate resources to compensate for the loss (Hacker et al. 2011).
It is critical to document and address how children’s health and development was affected by their increased economic insecurity over the Great Recession. Unfortunately, many children now face the dual threats of diminished parental resources and reduced government resources. Efforts to ameliorate the negative consequences of the recession on children will take additional resources and creative thinking, but this investment is vital to the economic future of the country.
For more information, please see the full report “Economic
Insecurity in Children’s Lives: Changes Over the Course of the
Great Recession” at www.urban.org.
1. See http://data.bls.gov/timeseries/LNU04000000?
years_option=all_years&periods_option=specific_periods&per iods=Annual+Data and http://data.bls.gov/timeseries/
LNS14000000 .
2. “Historical Poverty Tables – People,” US Census Bureau, http:// www.census.gov/hhes/www/poverty/data/historical/ people.html
3. See the full report for references to the literature on the effects of economic insecurity on child health and development.
References
Hacker, Jacob S., Gregory A. Huber, Austin Nichols, Philipp Rehm, and Stuart Craig. 2011. Economic Insecurity and the Great Re-
cession: Findings from the Economic Security Index. New Haven, CT: Economic Security Index. http:// economicsecurityindex.org/assets/ESI%20Full%20Report%
202011.pdf
.
McKernan, Signe-Mary, Caroline Ratcliffe, Eugene Steuerle, and
Sisi Zhang. 2013. “Less Than Equal: Racial Disparities in
Wealth Accumulation.” Washington, DC: The Urban Institute. http://www.urban.org/publications/412802.html
.
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Low ‐ Income
Working   Families
Data   and   Methods
This   analysis   draws   on   data   from   the   Annual   Supplement   on   Economic   Condi ons   to   the   March   2008   and   2011   Current   Popula on   Survey   (CPS).
Data   from   the   Food   Security   Supplement   to   the   December   CPS   for   2007   and   2010   are   also   used   to   examine   changes   in   food   security.
For   each   child,   two   indexes   were   developed:   an   index   of   economic   insecurity   and   an   index   of   social   program   par cipa on.
The   index   of   economic   insecurity   is   a   count   of   indicators   that   includes   the   following   components:   economic   hardship   (living   in   poverty,   having   low   or   very   low   family   food   security,   having   low   or   very   low   child   food   security);   employment   (either   parent   unemployed   or   receiving   unemploy ‐ ment   compensa on   during   the   year,   either   parent   looking   for   work   for   more   than   six   months,   either   parent   underemployed);   housing   hardship
(more   than   one   family   in   the   household,   family   living   in   rental   housing,   child   moved   in   the   past   year);   family   structure   (having   only   one   parent   in   the   household,   having   no   parents   in   the   household,   living   without   parents   or   rela ves);   and   parental   health   and   insurance   coverage   (either   par ‐ ent   in   fair   or   poor   health,   either   parent   disabled,   either   parent   uninsured).
a
The   index   of   social   program   par cipa on   measures   how   many   social   bene fi ts   the   family   received   and   whether   the   family   received   assistance   with   food   (Supplemental   Nutri onal   Assistance   Program   [SNAP]   bene fi ts   and   free   school   lunch),   income   support   (public   assistance   and   unem ‐ ployment   insurance   bene fi ts),   housing   or   energy   assistance   (public   housing   subsidies   and   the   Low   Income   Home   Energy   Assistance   Program
[LIHEAP]),   and   health   insurance   coverage   (parent   covered   by   Medicaid   and   child   covered   by   Medicaid   or   CHIP).
a.
Food   insecurity   is   examined   as   a   separate   component   but   is   not   included   in   the   index   because   it   is   obtained   from   the   December   supplement   to   the   Current   Pop ‐ ula on   Survey,   for   which   there   is   no   overlap   in   individuals   surveyed   in   the   March   supplement.
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This fact sheet is part of the Urban Institute’s Low-Income Working Families project, a multiyear effort that focuses on the private- and public-sector contexts for families’ success or failure. Both contexts offer opportunities for better helping families meet their needs. The Low-Income Working
Families project is currently supported by the Annie E. Casey Foundation.
Copyright © September 2013. The Urban Institute. The views expressed are those of the authors and do not necessarily represent those of the Urban
Institute, its board, its sponsors, or other authors in this series. Permission is granted for reproduction of this document, with attribution to the
Urban Institute.