Experiences of Poverty Around the Time of a Birth: A Research Note

Abstract

While research highlights that, on average, women's income and labor force participation fall around the time of a birth, little is known about how women's experiences of poverty around childbirth vary by birth parity or race and ethnicity. Using data from the Survey of Income and Program Participation and the Supplemental Poverty Measure (a comprehensive measure of poverty), this research note examines the poverty rate of mothers overall and by birth parity and racial and ethnic group in the six months before and after childbirth. We also assess the role of current government support programs in moderating financial losses during the time around a birth. We find that poverty rates among mothers increase after childbirth, with the magnitude varying by birth parity and racial and ethnic group. While current government programs help reduce poverty among mothers around childbirth, these programs do not protect mothers from falling into poverty after childbirth nor do they reduce the inequities in poverty by race or ethnicity. Our results highlight the need for greater public assistance for mothers with recent births to ensure improved child and family well-being and also call attention to the need for policies to address long-standing racial and ethnic inequities in child and family well-being.

Introduction

The arrival of a newborn can have significant financial implications. The costs associated with childbirth, food, newborn necessities, and childcare place increased demand on families’ resources. At the same time, as household costs increase, income declines for many families in the United States because while mothers need to take time off from work before and after a birth, only 23% of U.S. workers have access to paid family leave (U.S. Bureau of Labor Statistics 2021). Additionally, many women experience health complications during pregnancy or childbirth that increase medical expenses and limit their ability to work during and after pregnancy (Marti-Castaner et al. 2022).

The financial burdens surrounding childbirth can be particularly acute for certain groups. Black and Hispanic women are less likely to have a college degree (Ryan and Bauman 2016), be employed in jobs providing paid family leave (Bartel et al. 2019; Winston 2014), and be able to take unpaid family leave (Winston 2014). As a result, Black and Hispanic women may have higher poverty rates around childbirth because they have lower incomes pre-birth, are more likely to quit or lose their jobs around a birth, and may lack the savings to buffer the financial shortfalls around childbirth. Similarly, first-time mothers may be less likely to be employed in positions that provide the flexibility needed for child-rearing, leading some to leave their jobs around childbirth. Additionally, first-time mothers may be less likely to participate in public programs because of unfamiliarity with eligibility criteria and less able to rely on resources such as childcare established after previous births.

Decreased employment and increased financial strain around the time of childbirth can result in many mothers—particularly minority and first-time mothers—falling into poverty, which negatively impacts children's well-being. Poverty during pregnancy has been linked to higher risks of low birthweight, pregnancy and birth complications, and maternal mortality (Kramer et al. 2000; Singh 2021). Children residing in poor households have, on average, lower cognitive development (Hair et al. 2015; Najman et al. 2009), lower school readiness and educational outcomes (Hardy 2014; Roos et al. 2019), and poorer health (Miller and Korenman 1994), and are more likely to have behavioral problems (D'Onofrio et al. 2009). The stress of poverty can also have negative effects on children's mental health (Najman et al. 2010; Wickham et al. 2017).

Two recent studies have examined changes in economic stability around the time of childbirth. Stanczyk (2020) showed that households experience significant declines in income adequacy at the time of a childbirth, even accounting for income from unrelated household members, near-cash public programs, and tax credits. Stanczyk's work provides the first comprehensive evidence on changes in financial well-being around childbirth for a large and contemporary sample (births between December 1995 and July 2013) but does not distinguish between mothers of different racial groups or parity, both crucial sources of variation in poverty around childbirth. Stanczyk also does not use a comprehensive measure of poverty that includes resources from most or all relevant government programs, such as the Supplemental Poverty Measure (SPM). Subsequent qualitative research by Marti-Castaner et al. (2022) in New York City points to important racial differences in poverty post-birth. Marti-Castaner et al. (2022) also found that for Black and Hispanic mothers, the assistance that was provided was often insufficient, with some mothers having to rely on informal supports to meet their needs.

Extending the work of Stanczyk (2020) and Marti-Castaner et al. (2022), this research note examines changes in poverty rates around childbirth for women overall and for women disaggregated by birth parity and race and ethnicity. Using monthly information from a large nationally representative panel survey, Survey of Income and Program Participation (SIPP), and applying the SPM, we provide information on the poverty status of mothers of newborns in each of the six months before and after childbirth, for mothers overall and by birth parity and racial and ethnic group. We also assess the extent to which current social supports mitigate economic losses surrounding a birth. Our work differs from Stanczyk (2020) in that we utilize a more comprehensive measure of poverty—the SPM—and provide results for subgroups by birth parity and racial and ethnic group. We extend the work of Marti-Castaner et al. (2022) by examining racial and ethnic differences in a large and nationally representative sample.

Data and Methods

Data and Sample

We use data from the 2014 and 2018 panels of the SIPP. In addition to providing comprehensive data on income, economic well-being, and government program participation, SIPP also includes information on household composition, demographic characteristics, and fertility. Our data include monthly information for January 2013 through December 2019.¹

Our sample includes women who had a birth during the survey panel years, who were observed in the data for the six months before and after childbirth, and who lived in the same household as their child for the full six months after birth. We exclude births in the first reference year of each SIPP panel because we lacked prior year's earnings and income information necessary to compute taxes (including refundable tax credits) in the year in which they are observed. Our final sample includes 966 mothers.²

Measures

We examine mothers’ poverty status using the SPM. The SPM improves on the official poverty measure (OPM) by including cash and noncash benefits received from various government programs and accounting for nondiscretionary household expenses. In addition to accounting for the OPM family unit, the SPM includes coresident unrelated children, foster children, unmarried partners and their relatives, and other unrelated individuals in its resource unit.³Online appendix A provides detailed information on how we measure each income and expense and determine monthly poverty status. To identify mothers’ poverty status without government support, we exclude public program benefits from SPM total resources.⁴

In addition to examining poverty status among all mothers, we also estimated poverty rates by birth parity and race and ethnicity. We defined parity using the SIPP fertility history data to identify whether this birth was a mother's first birth or whether she had previous child(ren). We used the racial and Hispanic ethnicity data included in SIPP to identify whether mothers were non-Hispanic White, non-Hispanic Black, Hispanic, Asian, or another race. We acknowledge that these racial categories are socially and politically constructed. We include all mothers in our overall analyses, but when examining subgroups, we are not able to conduct separate analyses for Asian mothers or mothers of another race owing to small sample sizes.

Analytic Approach

We first estimate the mean monthly poverty rate among all mothers with a newborn in each of the six months before and after childbirth. Next, we conduct subgroup analyses, estimating mothers’ poverty status by birth parity and by racial and ethnic group. All estimates are weighted using SIPP person-weights to ensure national representativeness.

Results

We present descriptive statistics for the study sample in the month of childbirth in Table B1 (online appendix). On average, sample mothers were 30 years old, married (72%), White (57%), and lived in SPM units with 4.3 people. Twenty-eight percent had some college education, and 41% had a bachelor's degree or more. For 35% of the sample, the birth observed during the SIPP panel was their first birth.

In Figure 1, we present the income amounts received from social support programs for all mothers of newborns in each of the six months before and after childbirth. The figure shows that income from some public programs increases in the months around childbirth. Income from SNAP, WIC, and TANF increases after childbirth, with the highest rates being within the first two months after childbirth. This observed trend is likely because WIC provides nutritional assistance to pregnant women and recent mothers, while all three programs would increase support to families with the addition of a new child.

Figure 2 shows the poverty rate among all mothers of newborns in each of the six months before and after childbirth, both with and without government support. We find that poverty rates among mothers begin to increase in the two months before birth, are the highest in the first three months after birth, and then begin to decline in the fourth month after birth. We also find that rates with government support are consistently lower than rates when government support is excluded. Without government support, poverty rates increase from an average of 25.4% prior to the birth month to 31.6% in the birth month. When government support is included, the poverty rate increases from a pre-birth average of 17.9% to 23.9% in the birth month. For both specifications, rates return close to the baseline level by the sixth month after childbirth.

We present our analyses of poverty rates, both with and without government support, by birth parity in Figure 3, which reveals a similar trend in poverty rates for both first-time mothers and mothers with previous children. We find that government support leads to larger reductions in poverty rates among mothers with previous children, and that while first-time mothers have a consistently lower poverty rate than mothers with previous children, they experience a sharper increase in poverty after birth. Without government support, poverty rates among mothers with previous children increase from an average of 30.8% in the months before birth to 36.0% in the birth month, then begin to decline from the third month after the birth month. With government support, the poverty rate among mothers with previous children is 21.9%, on average, prior to the birth month, increasing to 26.8% and 28.6% in the birth month and first month after childbirth, respectively. Conversely, for first-time mothers, the poverty rate in the birth month increases by 8.1 percentage points from a pre-childbirth average of 15.4% when excluding government support and by 8.2 percentage points from a pre-childbirth average of 10.4% when accounting for government support. Unlike with mothers of previous children, though the poverty rate among first-time mothers starts to decline from the third month after birth, it remains well above pre-childbirth levels by the sixth month after childbirth even after accounting for government support.

In our examination of poverty rates by racial group (Figure 4), we observe notable differences. Non-Hispanic White mothers have the lowest poverty rate among all three racial and ethnic groups and the smallest increase in poverty in the birth month. While non-Hispanic Black mothers have the highest pre-childbirth poverty rates, they have similar poverty rates to Hispanic mothers post-childbirth. We also find that government support has the smallest effect on poverty rates among White mothers, and the largest effect among Black mothers—particularly prior to childbirth.

Before childbirth, White mothers’ poverty rate without government support is, on average, 17.6% and increases to 23.9% in the birth month. With government support pre-childbirth, their average poverty rate is 12.4%, increasing to 18.0% in the birth month. In both scenarios, poverty rates begin to decline from the first month after birth, with rates including government support returning close to baseline level by the sixth month after childbirth.

Among Black mothers, poverty rates without government support range between 47.3% and 54.6% in the six months both before and after childbirth, reflecting the effect of longstanding structural disadvantage, including systemic racism. With government support, their average poverty rate pre-childbirth is 32.2% (18.6 percentage points lower than without government support), and the rate increases to 38.7% in the birth month.⁵

Finally, among Hispanic mothers, poverty rates average 36.3% in the pre-birth period without government support, again reflecting longstanding structural disadvantage, and rates rise to 49.7% in the birth month. With government support, their poverty rate increases by 12.2 percentage points in the birth month (to 40.0%) relative to the pre-birth average of 27.8%. Unlike White and Black mothers, poverty rates with and without government support for Hispanic mothers do not return to pre-childbirth levels by the sixth month after childbirth.⁶

Discussion

The months around childbirth are a period when most U.S. mothers experience a decrease in income owing to reduced labor market participation and limited access to paid family leave, while experiencing increases in childbirth- and child-related costs. In this research note, we examine the poverty status of mothers around the time of childbirth, extending previous research by disaggregating mothers by birth parity and racial and ethnic group and by documenting the role of government supports in assisting mothers using the SPM's more comprehensive definition of poverty.

Our results show that mothers experience significant financial strain around the time of a birth, the extent of which varies by birth parity and race and ethnicity. While current public programs play a key role in reducing poverty among mothers of newborns, these programs do not protect mothers—particularly first-time and Black and Hispanic mothers—from falling into poverty around childbirth. Even with government support, mothers experience a substantial increase in poverty after childbirth. Of note, we find that even with government support, approximately 40% of Black and Hispanic mothers experience poverty around a birth. Such high poverty rates among these mothers reflect various structural factors, including Black and Hispanic adults being concentrated in low-wage positions (Earle et al. 2014) and having less access to paid leave from employers (Bartel et al. 2019; Goodman et al. 2021).

Our findings are consistent with those from qualitative research among low-income Black and Hispanic mothers with recent births in New York City (Marti-Castaner et al. 2022). Mothers revealed that while support from programs such as WIC and SNAP helped to alleviate hardship around childbirth, these programs often fell short of meeting their needs. As a result, most mothers relied on community organizations to meet their families’ needs (Marti-Castaner et al. 2022). Our results are also in line with Stanczyk's (2020) findings that although incomes are buffered by increases in public program income, households experience declines in income adequacy around a birth. Our results add nuance to Stanczyk's findings by providing results by parity and by race and ethnicity and by using the SPM to track poverty more comprehensively.

Our study is not without limitations. While the SIPP does a better job in recording public program participation than other national surveys, underreporting in program participation increased after a 2014 redesign (National Academies of Sciences, Engineering, and Medicine 2018). Hence, we may be underestimating the role of government support around the time of childbirth in our analyses. Additionally, SIPP respondents are required to recall income information for each month across an entire year. While evaluations show that income measures are more accurate in the redesigned SIPP compared with previous panels (National Academies of Sciences, Engineering, and Medicine 2018; U.S. Census Bureau 2013), measures may include some inaccuracies owing to recall bias. Additionally, the SIPP sample size was not sufficient to allow us to conduct separate analyses of Asian women or women of other racial groups. These groups should be studied in future research.

Considering the detrimental impact that early childhood poverty can have on child health and development, the findings from this study highlight the need for additional government support for mothers of newborns, particularly those from racial minority backgrounds who already have starkly higher poverty rates even before a birth. The U.S. government could modify current programs to ensure mothers with recent births have enough income to meet basic needs in the first few months post-birth. For example, WIC benefit amounts could be increased. Measures should also be taken to address the various shortcomings of the current safety net that limit access to and participation in social programs among low-income and minority groups. Additionally, policies such as paid family leave, birth grants, and the recently expanded Child Tax Credit could provide further financial support for mothers at a time when they are experiencing a loss of earnings. These policies could also reduce disparities in poverty by race and ethnicity after a birth. Paid family leave policies provide families with more economic stability during the postnatal period, reducing the risk of poverty (Stanczyk 2019) and increasing labor force attachment among mothers after birth (Baum and Ruhm 2016; Rossin-Slater et al. 2013). However, the United States has no national paid family leave policy—which would substantially increase access to paid leave for Black and Hispanic mothers—and only 11 states have enacted state paid family leave provisions (Bartel et al. 2023). Regarding birth grants, several developed countries, such as the United Kingdom, provide mothers with a one-time payment around childbirth to assist with the costs of having a child, thereby reducing financial strain (UK Department of Work and Pensions 2022). This policy does not exist in the United States.

Finally, recent studies have shown that the 2021 expanded Child Tax Credit reduced U.S. poverty and material hardship (Burns and Fox 2021; Parolin et al. 2021) and that monthly payments help reduce monthly income volatility (Hamilton et al. 2022; Lens et al. 2022). These expanded payments ended in December 2021. The U.S. federal government could reinstate monthly payments of an expanded Child Tax Credit, providing needed funds to mothers within the first few months after childbirth and thereafter. Reinstating this policy would also ensure that children from low-income and minority backgrounds receive benefits, as they are the most likely to be excluded under the current annual credit because of their parents’ income level (Collyer et al. 2019). Future research should assess the impact these policies can have on poverty rates around childbirth, for women overall and for Black and Hispanic women who face a higher risk of poverty.

Notes

References