The Unequal Impact of COVID-19 on Children’s Economic Vulnerability

The Issue:

There are large disparities in COVID-related unemployment, with the largest proportional losses among Latinx and less-educated workers. The effects have been particularly felt among children.  In our original research based on very recent data, we find that one-in-five children in the United States experienced the job loss of an adult in their household between February and April of 2020 and one-in-twelve experienced the job loss of all adult earners in their household, including one-in-seven children living with single parents. Our analysis also points to striking disparities by race, ethnicity, and income, with higher shares of Latinx, Black, and lower-income children losing all adult earners in their households. While there was some job recovery between April and May, the pattern of job losses appears to be exacerbating inequality.

The share of children in households where no one had an income increased from 7 percent to 15 percent between February and April 2020, with differential impacts by race, income and family structure.

The Facts:

• There was pervasive experience among children with one or more adults in their households losing jobs following the March 2020 COVID-19 stay-at-home orders, but there are also significant differences across racial, ethnic and income groups. The statistic that 21 percent of children experienced the job loss of at least one adult in their household is calculated over all race and ethnic groups, household incomes, and family structures. (This statistic, and all others in this memo, are based on our analysis using the Current Population Survey (CPS) interviews of the same households in February and April of 2020, and following a subset interviewed in May 2020). Latinx and lower-income children were harder hit; 27 percent of Latinx children and 24 percent of children in households earning less than the country’s median income ($75,000) prior to the pandemic experienced at least one household member losing a job between February and April of 2020. About one-third of children living in households that included parents and other adults, like grown children, or extended family members, experienced one of the adults in that household losing a job.
• Disparities were particularly stark among children experiencing job loss of all working adults in their household. The share of children living in households in which no one earned an income doubled from 7 percent in February to 15 percent in April. The overall share of children in households that lost all adult earners between February and April, 8.3 percent, masks differences across groups (see the chart). The share of White children whose households lost all adult earners was 5.8 percent while these shares for Black children and Latinx children were 12.4 percent and 11.9 percent, respectively. There was a higher share of children in households with income below $75,000, where all adult earners lost their job (12.1 percent) as compared to the share of children in households that made between $75,000 and $150,000 (4.9 percent) or those that made more than $150,000 (2.5 percent). There were also marked differences across family structure; 14.2 percent of children living with single parents saw their parent lose their job while less than half that share of children living with two parents (6.4 percent) saw all earners in their households lose their jobs.
• Latinx children were more likely to be in households that experienced any job loss, but they were relatively protected from job losses among all adult earners because they more often lived in households with multiple adults. Latinx children are more likely to live households that include grandparents and extended kin. The average number of adults in a Latinx household with children was 2.3, as compared to 2.1 for Whites and 1.9 for Blacks. Twenty percent of Latinx children lived in two-parent households with other adults – the comparable statistics were 10.4 percent for White children and 8 percent for Black children. Among Latinx children, 11.1 percent lived in single-parent households with other adults, while 5.6 percent of White children and 17.2 percent of Black children lived in households of this type.
• There were mixed findings when we looked at the same group of children in May 2020. Children’s experience of job loss in their household between February and April captured the immediate impact of March stay-at-home orders. Following this group of children for an additional month using linked samples from the May CPS showed that all groups were doing marginally better, with fewer children in households with no earners. This appears to be especially true among children in higher-income households earning above $150,000. But other children, particularly Black and Latinx children, seem to be lagging behind. Data suggest that to the extent there has been a recovery, it has been unequal across groups, exacerbating disparities and indicating widening gaps in the longer-run. (Our estimates are based on a subset of children whose households responded to the May CPS; this subset tended to draw proportionally more observations from richer households, potentially understating disparities in recovery.) And, of course, the situation remains fluid, with forecasts warning that economic conditions may worsen .
• There were also large geographic differences in the share of children who experienced job loss in their household. Stay-at-home orders varied across states, although there is evidence that the labor market collapsed at the same time across the U.S. irrespective of where the virus first spread or, the timing of state-level lock-down policies. State-level safety net policies, including unemployment insurance, vary widely. These factors suggest inequality in children’s experiences across states. We found that, at the state level, the loss of all household earners from February to April ranged from less than 2 percent of children in Minnesota and Connecticut to over 15 percent in New York and Nevada. Differences in child vulnerability do not map neatly onto the generosity of state safety nets. For example, Minnesota's per capita spending on social welfare is relatively high and Connecticut's is relatively low. Similarly, New York's spending is high and Nevada's is low. Regional disparities in child vulnerability to household job loss likely reflect state-by-state differences in the occupational mix, including the share of essential workers and jobs that more easily transitioned to remote work. These differences will likely shift, and may very well widen, as the pandemic moves to new areas of the country.