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Households with Children are More Likely to Have Lost Income during the Pandemic

The coronavirus is leaving social and economic destruction in its wake, and households with children have been disproportionately impacted.

A new tool from the Census Bureau provides a snapshot into the challenges facing households as a result of the novel coronavirus (COVID-19) and the associated economic and social shutdowns. The Household Pulse Survey contacts households in all 50 states and 12 major metropolitan areas to ask a series of questions about the impact of the coronavirus and its secondary effects on their employment, food security, health and health care, and housing.

Results for the third week of the survey, fielded May 14 to 19, have been released. Nationally, 55 percent of households with children reported experiencing a loss of employment income, notably higher than the 44 percent of households without children. These are households in which someone has reported a loss of income from employment, not necessarily an absolute decline in income. In all states but New Mexico, a majority of households reported experiencing a loss of employment income.

The states with the highest percentage of households with children present that reported a loss of income since mid-March were on the West Coast, with the percentage of families in Mountain region states reporting lost income tending to be below the national average.

States in the South are especially likely to see a disproportionate impact on employment income in households with kids present. In Alabama, for example, 59 percent of households with children reported losing work, while only 31 percent of childless households reported the same. New Mexico is again an outlier, with a higher fraction of households without children reporting lost income than those with children.

One possible explanation could be that states where more households have children present are more likely to see a negative impact on those households from the COVID-19 pandemic. But the correlation between the share of households with children and households with children reporting income loss is almost exactly zero. Instead, the dynamic appears to be driven by the states’ underlying demographics. Across the nation, households that are Hispanic, Black, never married, have lower education, and have a lower income are more likely to report experiencing lost income.

A simple correlation (not shown) shows that states with a lower percentage of children living in two-parent households, like the South, had a higher percentage of households with children self-reporting income loss. When children live with two parents, having both parents in the labor force seems to make income loss slightly less likely. Across states, there is a relationship between the share of two-parent families that have two parents in the labor force, possibly because dual-earner households are more likely to be married and have higher levels of education.

These findings jibe with research done by University of Virginia scholar (and past JEC witness) W. Bradford Wilcox and a coauthor, who found that single parents were the most likely to report having experienced job loss following the start of the pandemic, followed by married parents, who were in turn more likely than married childless couples to have lost a job (Note that the NORC data they rely on asks about the individual’s job status, whereas the Census Bureau Household Pulse Survey asks if “you or anyone in your household has experienced a loss in employment income,” which could reflect furloughs, trimmed hours, layoffs, or other situations.)

It should be noted that recent data released from the Bureau of Economic Analysis found that personal income actually increased by about 10 percent in April, likely to due to the economic stability payments included in the relief package passed by Congress. Therefore, the loss of employment income may have been ameliorated by the $1,200 per person (and $600 per child) payments provided by the Treasury Department. Additionally, the (weighted) response rate for the third week of the survey was only 2.3 percent, raising some potential concern about bias due to selective response.

The Household Pulse Survey will continue into future weeks, and additional research will be needed to ascertain the short- and long-term impact of the pandemic on families. In the meantime, the disproportionate impact of the pandemic on families with children stresses the importance of helping connect people to work and making it more affordable to raise a family, two of the main goals of the Social Capital Project.

Patrick T. Brown
Senior Policy Advisor

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