Significant Differences in How Poverty is Passed from Parents to Children Across Countries

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main-column-padding-right mb-5"> <h1>Significant Differences in How Poverty is Passed from Parents to Children Across Countries</h1> <nav aria-label="Breadcrumbs"> <ul class="breadcrumb d-none d-sm-flex not-list-styled mb-3 mb-lg-5"> <li class="breadcrumb-item"> <a href="/swedish-institute-for-social-research/">Swedish Institute for Social Research</a> </li> <li class="breadcrumb-item"> <a href="/swedish-institute-for-social-research/news">News</a> </li> </ul> <ul class="breadcrumb d-flex d-sm-none not-list-styled mb-3 mb-lg-5"> <li class="breadcrumb-item with-chevron"> <a href="/swedish-institute-for-social-research/news">News</a> </li> </ul> </nav> <p class="lead-light">Researchers from Stockholm University, Bocconi University, and the Rockwool Foundation have studied poverty’s lasting impact across generations in wealthy countries. By examining the United States, Denmark, the United Kingdom, Australia, and Germany, the team found that welfare systems play a significant role in whether children born into poverty will remain poor as adults.</p> <div><div class="image-block webb2021-image-default"> <div class="image-block-image"><img alt="A red stop sign hanging over a street. Blue sky and a brick building in the background." class="article-image" src="/polopoly_fs/1.775801!/image/image.jpg_gen/derivatives/landscape_690/image.jpg" /> <div class="image-block-description">The U.S. is unique in having a high “poverty penalty,” meaning that a lot of the poverty passed from parents to children isn’t explained by typical factors like education or employment. Photo: Mostphotos</div> </div> </div> <p>The research shows a sharp contrast between countries with robust welfare systems, like Denmark, and those with fewer social supports, such as the United States. In Denmark, children growing up in poverty are much less likely to stay poor in adulthood, with only 8%-point higher risk of experiencing poverty as adults. In the U.S., however, that 42%-point, meaning that a child born into poverty has a 42% higher chance of being poor as an adult compared to someone who grew up financially secure. </p> <div class="image-block webb2021-image-inline"> <div class="image-block-image"><img alt="Portrait photo of Peter Fallesen" class="article-image" src="/polopoly_fs/1.775809!/image/image.jpeg_gen/derivatives/box_690/image.jpeg" /> <div class="image-block-description">Peter Fallesen. Photo: Rockwool Foundation</div> </div> </div> <p><a href="https://www.su.se/profiles/pfall-1.251926">Peter Fallesen</a>, researcher at the Swedish Institute for Social Research (SOFI), explains: “A kid who spends their entire childhood in poverty in the U.S. has a 42 percentage point larger risk of being poor as an adult than someone who doesn’t.”</p> <span class="su-anchor" id="breakingdownpovertyscycle"> </span><h2>Breaking Down Poverty’s Cycle</h2> <p>The study examined factors that keep poverty going, including family background, access to education, job opportunities, and government help. The results show that while family background plays a large role in Denmark, the U.S. is unique in having a high “poverty penalty,” meaning that a lot of the poverty passed from parents to children isn’t explained by typical factors like education or employment.</p> <p>“Basically, half of the social transmission of poverty in the U.S., we cannot explain,” Fallesen remarks, noting that it may reflect how poverty in the U.S. “is simply more damaging” than in other countries.</p> <span class="su-anchor" id="theimpactofsocialsupport"> </span><h2>The Impact of Social Support</h2> <p>Countries like Denmark, the U.K., and Australia show how strong welfare systems can reduce poverty across generations. Programs like tax credits, social benefits, and job support make a real difference in people’s lives, helping children from low-income families avoid poverty as adults. However, in the U.S. and Germany, where social support is less impactful, poverty persists from generation to generation. As Fallesen explains, “We can call it redistribution…it is lowering that intergenerational poverty transmission quite remarkably,” referring to how social transfers help reduce poverty’s hold on families in countries like Denmark.</p> <span class="su-anchor" id="acloserlookattheus"> </span><h2>A Closer Look at the U.S.</h2> <p>Researchers suggest that in the U.S., poverty in childhood might lead to more severe consequences than in other countries. Even when accounting for factors like education, healthcare, and job stability, a large portion of poverty in the U.S. remains unexplained. This “poverty penalty” shows that poor children in the U.S. face significant barriers that can hold them back well into adulthood.</p> <p>Published in Nature Human Behaviour, the study <em><a class="ck-external-link" href="http://www.nature.com/articles/s41562-024-02029-w">Intergenerational persistence of poverty in five high-income countries</a> </em>offers valuable insights for policymakers looking to address inequality and break the cycle of poverty through targeted social programs and support systems.</p> <span class="su-anchor" id="learnmore"> </span><h2>Learn more</h2> <p><a class="ck-external-arrow-link" href="https://www.nature.com/articles/s41562-024-02029-w">Read the full paper</a></p> <p><a class="ck-external-arrow-link" href="https://en.rockwoolfonden.dk/publications/danish-children-from-poor-families-often-break-the-cycle-of-social-inheritance/">Rockwool Foundation Press Release</a></p> <span class="su-anchor" id="contact"> </span><h2>Contact</h2> <p>Peter Fallesen, Assistant Professor, <a href="mailto:peter.fallesen@sofi.su.se" title="Send email">peter.fallesen@sofi.su.se</a></p> </div> <div class="d-lg-none print-aside"> <span class="label">Theme</span> <div class="card-footer mt-auto card-footer__with-tags px-0 pb-0 pt-2"> <a href="https://www.su.se/english/themes/economy-and-society" class="tag-label d-inline-block mr-1 text-decoration-none">Economy and Society <span class="sr-only">- Theme page</span></a> <a href="https://www.su.se/english/themes/society-democracy-and-welfare" class="tag-label d-inline-block mr-1 text-decoration-none">Society, Democracy and Welfare <span class="sr-only">- Theme page</span></a> </div> <div class="pt-3 pt-lg-0"> <span class="label"> Research group </span> <div class="row pt-3"> <article class="col-12 col-md-6 col-lg-12 mb-3 js-research-filter-teaser article-list-item" aria-label="Level of living (LNU)" data-filter-title="Level of living (LNU)" data-filter-lead="Research at the Level of Living-unit includes studies of individuals' living conditions, social stratification and economic and social inequality. Here we study what living conditions in society look like today for both adults and children, and how the standard of living in society has changed over time and between generations."> <div class="js-find-link-and-create-click-area"> <div class="box-super-fat-border__bg-blue test bg-white p-0 row no-gutters research-group-right-teaser"> <div class="col-9 p-2 d-flex"> <div> <a href="https://www.su.se/english/research/research-groups/level-of-living-lnu" class="box-super-fat-border__text-header" role="heading" aria-level="1" title="Go to research group page"> Level of living (LNU) </a> <p class="text-blocker m-0"> Research at the Level of Living-unit includes studies of individuals' living conditions, social stratification and economic and social inequality. Here we study what living conditions in society look like today for both adults and children, and how the standard of living in society has changed over time and between generations. </p> </div> </div> <div class="col-3 border-left-bg-blue-medium p-2"> <img src='/polopoly_fs/1.668659.1692969803!/image/image.png_gen/derivatives/box_260/image.png' alt='Researchers at LNU' width='260' title='Photo: Daniel Rossetti' class='box-super-fat-border__profile-image' height='260' /> </div> </div> <a href="https://www.su.se/english/research/research-groups/level-of-living-lnu" class="bg-blue w-100 text-center d-block hover-me pb-2" lang="en"> <span class="far fa-arrow-right su-arrow-right" aria-hidden="true"></span> <span class="sr-only">Read more about </span> </a> </div> </article> </div> </div> </div>  <div class="webb2021-article-info"> <p>Last updated: October 31, 2024</p> <p>Source: MD</p> </div>  </article> <aside class="main-article-aside col-12 col-lg-4 d-none d-lg-block no-print"> <div class="sticky-section"> <div class="main-article-aside__section ml-lg-3"> <span class="label">Theme</span> <div class="pt-3"> <div class="card-footer mt-auto card-footer__with-tags px-0 pb-0 pt-2"> <a href="https://www.su.se/english/themes/economy-and-society" class="tag-label d-inline-block mr-1 text-decoration-none">Economy and Society <span class="sr-only">- Theme page</span></a> <a href="https://www.su.se/english/themes/society-democracy-and-welfare" class="tag-label d-inline-block mr-1 text-decoration-none">Society, Democracy and Welfare <span class="sr-only">- Theme page</span></a> </div> </div> </div> <div class="main-article-aside__section ml-lg-3 pb-2"> <span class="label mb-2"> Research group </span> <div class="row"> <article class="col-12 col-md-6 col-lg-12 mb-3 js-research-filter-teaser article-list-item" aria-label="Level of living (LNU)" data-filter-title="Level of living (LNU)" data-filter-lead="Research at the Level of Living-unit includes studies of individuals' living conditions, social stratification and economic and social inequality. Here we study what living conditions in society look like today for both adults and children, and how the standard of living in society has changed over time and between generations."> <div class="js-find-link-and-create-click-area"> <div class="box-super-fat-border__bg-blue test bg-white p-0 row no-gutters research-group-right-teaser"> <div class="col-9 p-2 d-flex"> <div> <a href="https://www.su.se/english/research/research-groups/level-of-living-lnu" class="box-super-fat-border__text-header" role="heading" aria-level="1" title="Go to research group page"> Level of living (LNU) </a> <p class="text-blocker m-0"> Research at the Level of Living-unit includes studies of individuals' living conditions, social stratification and economic and social inequality. 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Significant Differences in How Poverty is Passed from Parents to Children Across Countries - Swedish Institute for Social Research