On August 14, 2003, the lights went out in cities across the Northeast. This rolling blackout, one of the worst in U.S. history, was a cascading failure, in which a local power surge on an already-overloaded system triggered failures across the network. Five years later, much of America was in the midst of another type of cascading failure. Like the Northeast blackout of 2003, the collapse of the housing market in 2007 flowed through multiple and interconnected systems, resulting in the deepest and most sustained global economic slowdown since the Great Depression.
The ensuing recession reverberated through families, placing economic stresses on parents, with repercussions for an entire generation of children. These ripple effects couldn't have come at a worse time for U.S. families already weighed down by a decade of stagnant wages and growing income inequality, particularly for low- and middle-income families.
As developmental scientists, we know that economic deprivation-including poverty, homelessness, onetime job or income shocks, and recessions-leads to reduced resources and toxic levels of stress within families, schools, and neighborhoods that can disrupt children's healthy development. But we also know that with the right supports at the right times, children demonstrate a remarkable resilience to such adversities.
Economic Hardships and Emotional Distress
Other articles in this report have documented the extent of the collapse. Unemployed parents who cannot find full-time work take on insecure, temporary, or part-time jobs that are often inadequate to meet their families' needs. Families' losses may also be affected by cutbacks in federal or state social-assistance programs meant to help parents temporarily smooth over the loss in income.
Parents' employment and financial struggles combined with the daily difficulties of paying bills and affording basic necessities trigger emotional reactions within the family that affect children's development. Adults who lose their jobs on average report an increase in depression and anxiety compared to adults who remain in stable employment. Even parents who don't lose their jobs but only perceive them to be at risk show higher signs of depression and have increased use of antidepressants. Overwhelmed, parents under financial pressure tend to fight more, leading to divorce or dysfunctional marriage.
Parents in distress are less affectionate and nurturing, and increasingly harsh, irritable, and inconsistent when dealing with their children. Research has even shown that children of long-term unemployed parents are more likely to be hospitalized for abuse and neglect. Parents' emotional distress can also affect children in less obvious but no less damaging ways. For example, during infancy-a particularly sensitive period for brain and neurological development-maternal depression has been linked to a decrease in electrical activity in the areas of the brain associated with self-regulation and positive emotion. Moreover, these early effects may be enduring. Evidence suggests that children whose mothers were depressed during infancy still show high levels of behavior problems as toddlers-even after mothers' depression abated. As children age, adolescent children of depressed parents who experience financial troubles have higher risks for developing anxiety and depression, problems with friends, and academic difficulties.
In addition to the impact of economic hardship on the quality of parents, financial distress decreases parents' ability to invest time and money in their children's upbringing, with particular consequences for cognitive and academic development. Starting in early childhood, mothers in households that experience a loss in income are less likely to spend time reading to their children, teaching them numbers and colors, and taking them to museums. Children of parents who lose their job have a 15 percent higher chance of being held back in school compared to before the job loss. In the long term, children whose parents lost a job are less likely to graduate from college and, in fact, earn 9 percent less annually as adults compared to similar children whose fathers did not experience an income loss.
Family stress likely radiates outward into other settings: most notably, in children's schools and neighborhoods. Social scientists are just beginning to understand the ways in which macroeconomic forces flow through such settings to influence children's development, and at this stage we can only make logical inferences. Take, for example, a study from Duke University showing that higher statewide unemployment levels were associated with lower statewide eighth-grade math scores. The magnitude of this finding suggests that children of both employed and unemployed parents suffered during the economic downturn. But if not through stressed-out families, then through what channels? A recent study by Heather Hill, Pamela Morris, and others raises an intriguing possibility: that maternal job loss causes an increase in the extent to which children act out in classrooms. As any teacher will tell you, one problem child in the classroom can disrupt the learning of all students in the class. While more research needs to be done to document these so-called peer effects, they raise enormous questions about the multiple and cumulative ways in which children's futures are shaped by economic hardship.
Kids in the Economic Blackout
It's too soon to know definitively how children will be affected long term by the recession, the persistent period of high unemployment, and cuts in social outlays. Much of the recession's effects on children may not manifest immediately but will be apparent in the longer term, as the downturn takes its continuing toll on family relationships, school resources, and work opportunities. Infant mortality continued to decline during the recession, while child obesity rates stayed the same. Asthma rates increased for African American, Latino, and Asian children, groups hard hit by the recession. Families largely maintained health-insurance coverage for children during the recession, thanks initially to the temporary help of the 2009 stimulus program (the American Recovery and Reinvestment Act). More than a year later, the Affordable Care Act added additional protections for children, requiring states to maintain Medicaid and State Children's Health Insurance Program eligibility. These data should be regarded as only the first word. Quality indicators of children's holistic development-such as measures of how children learn, think, and build relationships with others-are not generally available in large-scale national data sets.
We do know that the first step in the cascading chain reaction has already begun. By any measure, parents faced unprecedented economic adversities during the recession. A total of 8.5 million adults lost their jobs during the recession, leaving one in nine children living with an unemployed parent. The number of children living in financially stressed households is much larger. As of November 2009, an additional 14.4 million adults were unemployed or underemployed, which includes people who wanted to work full-time but had either given up looking for work or were working part-time. As other articles in this special report have shown, the economic impact on children and families is continuing.
Even today, in a weak recovery, many families are still in economic turmoil. Around five million people, or nearly 40 percent of those currently unemployed, have been without work for approximately six months or more. The effects of such long-term employment are pernicious: The longer people are unemployed, the more unlikely they are to find a new job, often dropping out of the labor market altogether. In the face of such lingering unemployment and a decrease in government benefits, many families forced into poverty during the recession remain in poverty today.
These enormous difficulties have already taken their toll on parents' mental health. Between 2008 and 2009, 25- to 44-year-olds (those of prime parenting age) reported an increase in serious psychological distress. According to a recent article in the medical journal The Lancet, 4,750 more people committed suicide between 2007 and 2010 than would be expected in the absence of the recession. Divorce rates actually declined during the recession-but the most likely explanation is that economic necessity has forced many couples to stay together. It is hardly healthy for kids when parents who'd rather split up remain in a stressful marriage.
In the face of this evidence, we have reason to be concerned about our children's futures. For children who were babies during the prolonged slump, parents' toxic stress and reduced ability to afford quality food and health care may actually alter children's brain development, stunting their chances across their lifespan. We are concerned about whether children will develop nurturing bonds with their caregivers and whether they will learn how to regulate their emotions in stressful and chaotic families. As children age, family stress and low levels of resources affect their ability to learn and to build relationships with their teachers, peers, and neighbors. We worry about whether children will stay in school and if they do, whether they will succeed. For adolescents during the recession, we are concerned about how they will find employment, become financially independent, and develop the agency to meet their goals-all hallmarks of a successful transition to adulthood.
The Policy Buffers We Need
We can prevent such a dark future by providing our most vulnerable children with access to policy "insulators" that buffer them from the worst of cascading failures in their families, schools, and neighborhoods. President Obama and the 111th Congress made an unprecedented level of short-term policy investments to support children, especially low-income children and their families, through the 2009 American Recovery and Reinvestment Act. Approximately $153 billion of the $787 billion in the ARRA-nearly 20 percent-went directly to children and children's programs, primarily via education and early education ($86.3 billion), tax programs ($30.7 billion), and health and nutrition ($28.7 billion). Another $70 billion indirectly supported children by supporting their families (primarily via tax credits and increases in unemployment insurance). In addition to stimulating the economy and protecting against further job loss, these ARRA funds temporarily provided America's most vulnerable children and families with resources to withstand the shocks so many experienced.
Unfortunately, many of the insulators provided in the 2009 stimulus package came to an abrupt end. At this juncture, in the midst of the government sequester, needed policy supports are at risk. The Ryan budget, recently passed in the House, gets 66 percent of its cuts from health/nutrition and tax programs that provide support for low- and middle-income families.
Negative economic shocks are predictably unpredictable, but negative effects of those shocks on parenting and on child health and development are quite predictable-and can be prevented. We can do so in multiple ways. We can pass a budget that protects the next generation of children: It should increase revenues without shifting the cost for important education and health supports to states. At the family, school, and neighborhood level, we can allocate funds to design, mount, and rigorously evaluate large-scale state experiments to protect children's development during times of economic crisis. As part of such an initiative, we can expand data-collection efforts to enable us to better understand how recessions and other crises shape children's development-in turn allowing us to develop more solutions. Programs that invest in children are cost-effective and hold the promise of improved responses to economic crises in the future.
