Abstract: (see Poster Gallery) Debt, Welfare, and Child Development Among Low-Income Families (Society for Social Work and Research 27th Annual Conference - Social Work Science and Complex Problems: Battling Inequities + Building Solutions)

All in-person and virtual presentations are in Mountain Standard Time Zone (MST).

SSWR 2023 Poster Gallery: as a registered in-person and virtual attendee, you have access to the virtual Poster Gallery which includes only the posters that elected to present virtually. The rest of the posters are presented in-person in the Poster/Exhibit Hall located in Phoenix A/B, 3rd floor. The access to the Poster Gallery will be available via the virtual conference platform the week of January 9. You will receive an email with instructions how to access the virtual conference platform.

485P (see Poster Gallery) Debt, Welfare, and Child Development Among Low-Income Families

Saturday, January 14, 2023
Phoenix C, 3rd Level (Sheraton Phoenix Downtown)
* noted as presenting author
Soohyun Yoon, MSW, Doctoral Student, University of Illinois at Urbana-Champaign, Urbana, IL
Chi-Fang Wu, PhD, Associate Professor and PhD Program Director, University of Illinois at Urbana-Champaign, Urbana, IL
Background and Aims: Household debt is becoming an important issue in the United States. A lot of low-income families have been hardest hit since the Great Recession in 2008 and have experienced long-term unemployment, real declines in income, or debt/credit issues. The widespread credit access and indebtedness make low-income families have very few assets and have many types of debts, including not only secured debts (e.g. installment loans, mortgages, auto loans), but also unsecured debts (e.g. credit cards debts, medical debt, and unpaid bills). Despite the growing importance of debt for family finances, especially for low-income families, very limited research has address associations among financial resources, debt/credit issues, and child well-being outcomes. The study aims to (1) identify child development outcomes by parental income sources; (2) investigate child development outcomes by the parental debt type; (3) examine informal income or other parental characteristics affect the outcomes of child development outcomes.

Methods: We used the Panel Study of Income Dynamics-Child Development Supplement (PSID-CDS) in 2014. The sample included low-income families aged 18-64 with at least one child ages 3 to 17 and had a family income below 200% of the federal poverty line at the baseline. We used the CDS-BPI (Behavior Problems Inventory) index which includes developmental outcomes for children ages 3 to 17. We divided the respondents into four groups by sources of household income: from welfare benefit or work. The respondents’ income sources include welfare benefits, if they have ever received SNAP, Medicaid, TANF, or UI benefits. The debt issues divided into two categories: secured debts that are tied to an asset (e.g., home, education) and unsecured debts (e.g., credit cards, other debts). We tested all these variables using descriptive statistics and regression analysis.

Results: The findings show 7.1% of the Welfare only group, 61.8% of the Work only group, 12.8% of the Work and Welfare group, and 40.6% of the No Work/No Welfare group had secured debts. Also, 17.3% of the Welfare only group, 46.8% of the Work only group, 24.8% of Work and Welfare only group, and 27.5% of the No Work/No Welfare group had unsecured debts. The regression analysis indicates parents who has unsecured debts and income from both work and welfare are more likely to have children with higher BPI scores. Furthermore, informal income, being older, black were associated with increased BPI scores, whereas having a child more than two, higher than high school degree were associated with a statistically significant decreased BPI score.

Conclusion and Implications: Using nationally representative data, this study finds that unsecured debt is a significant indicator to increase adverse child development outcomes among low-income families. Unsecured debt is directly related to and used for family’s consumption and expenditure for their children; however, very limited research has been conducted regarding a child development among low-income families. By identifying that unsecured debts have negatively impacted child behavioral outcomes, we would suggest the need for financial education programs or improvement of income support programs to reduce these adverse outcomes.