While the federal government administers many of the largest anti-poverty programs, state governments have the ability to significantly reduce child poverty through tax credits. There are 29 states with their own version of the federal EITC, 23 states with a child and dependent care tax credit program, and six states with their own version of the child tax credit. Four states — Oklahoma, Colorado, New York, and California — have all three. These programs typically have the same eligibility requirements as the federal programs they complement and offer qualifying households some percentage of the federal credit amount.
Many of the states where public programs have the greatest impact on poverty are among America’s poorest states and may therefore be in the greatest need of government assistance. In 12 of the 15 states on this list, the median household income is below the $60,336 national figure.
States relying the most on government assistance also tend to have a high ratio of children to adults, adding greater financial burden to the working-age population and further necessitating the need for public benefits programs. In 10 of the 15 states where public programs lift the most children out of poverty, the child dependency ratio is greater than the national proportion of 37 children for every 100 adults aged 18 to 64.
To determine the states where public programs lift the most children out of poverty, 24/7 Wall St. calculated the change in the number of children living in poverty under the supplemental definition of poverty and when public anti-poverty programs are excluded. The supplemental rate includes public assistance programs as well as cost of living measures. 24/7 Wall St. factored out any anti-poverty subsidies and tax credits (to see how effective are government programs in each state). Data came from the U.S. Census Bureau.
To factor out anti-poverty subsidies and tax credits, we subtracted the total value of dollars received from the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps), housing subsidies, school lunch subsidies, energy subsidies, subsidies from the Women, Infants, and Children program (WIC), earned income tax credits, and child tax credits from the total value of a household’s resources. All data are three-year averages of the Census Bureau’s supplemental poverty research file for the years 2015, 2016, and 2017. Data on regional price parity, or cost of living, came from the Bureau of Economic Analysis and is for 2017. Data on median household income, the ratio of children under 18, and the share of poor families receiving social security income or public assistance income (the recipiency rate) came from the Census Bureau’s 2017 American Community Survey.