USC Price School of Public Policy

Myers study: Investing in children critical to nation’s economic, political future

October 23, 2017

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Massive demographic changes create challenges, elevate economic role of next generations

Ensuring the health and well-being of children in the U.S. has never been more critical to the nation’s economic and political future, according to a new report The New Importance of Children in America from University of Southern California researcher who focuses on 21st century demographic changes that are profoundly affecting the nation and the 50 states.

At a time when Congress and the Administration are contemplating cuts to programs that support children and families, this new analysis finds declining birth rates and the retirement of the sizable Baby Boom generation make the U.S. dependent on an increasingly smaller population of workers and consumers to drive the economy and generate tax revenue.

In 2000, there were just 24 seniors for every 100 people of working age, but by 2030 that number will grow to 42 seniors for every 100 workers, the report notes. This trend forecasts an increasing demand for crucial social programs, including Medicare and Social Security, at a time when the population of today’s children — the future workforce — is shrinking.

“The aging trend means that children are leaping in importance and that this should be a wake-up call for policymakers,” said report author Dowell Myers, professor of policy and demography and director of the Population Dynamics Research Group at the USC Price School of Public Policy. “This is not the 20th century anymore. A new day has arrived.”

The relative shortage of children means that each child — regardless of gender, ethnicity, geographic residence or economic background — is virtually twice as important to society as ever before, according to Myers. Every single child requires the best nurturing in health and education so they can develop to their full potential.

“We must invest in the health of our children to maximize their capabilities and future earning power,” Myers said. “Helping every child to lead a well-nurtured, healthy and educated life is good for the child, but it also returns tremendous benefits to society.”

While barely 10 percent of the federal budget goes to children, programs that support them — such as Medicaid and the Children’s Health Insurance Program (CHIP) — are under continual budget attack. Yet current data from this report and from the Child and Adolescent Health Measurement Initiative show a child population in the U.S. under duress:

  • One in five children has an identified emotional, mental or behavioral health problem, and over 75 percent of these children have had an adverse childhood event.
  • The incidence of child poverty increased markedly since 2000. In 2016, 19 percent of children lived in poverty, and children are poor at twice the rate of seniors (9 percent).
  • 40 percent of children rely on public health insurance (Medicaid and CHIP).
  • 25 percent of children come from immigrant families and in many cases because English is not the primary language in the home, these children may require tailored social, health, and educational services to help them grow to peak productivity as future adults.

“These findings make a compelling argument that our policies and programs increasingly must support the health, education and well-being of the nation’s children,” said David Alexander, MD, president and CEO of the Lucile Packard Foundation for Children’s Health, which co-funded the study. “In particular, we must address the growing rates of child poverty, which can limit children’s access to food, housing, health care and education, hindering their development and restricting their potential.”

The report documents another significant yet little-noticed challenge for the nation. Most programs that support children are operated on a state basis, and spending on health care and education varies widely by state. A growing number of children are residing in states with lower investment in children, and these states are producing a disproportionate share of the future workforce. This trend points up the interdependence of states, as 40 percent of U.S.-born adults are joining the workforce in a different state from where they were born and received early health care and education.

“At the federal level and in too many states, current investments in children’s health and well-being are woefully inadequate to meet the coming need,” said Mark Wietecha, president and CEO of the Children’s Hospital Association, which co-funded the study. “A stronger investment in the health and well-being of our future generation should be our nation’s highest priority.”