[Economic Report of the President (1998)]
[Administration of William J. Clinton]
[Online through the Government Printing Office, www.gpo.gov]

[DOCID: f:erp_c3._]
Economic Report of the President - - - - - - - - - - - - H. Doc. 105-176
[From the online service of the the U.S. Government Printing Office]
[wais.access.gpo.gov]



CHAPTER 3 -- The Economic Well-Being of Children

AFTER DROPPING SHARPLY IN THE 1960s, the official poverty rate among
children trended upward from 1969 to 1993, reflecting increases in the
share of children in single-parent families and declines in real wages
at the bottom of the income distribution. Recently, however, the
picture has improved, as the child poverty rate declined by 2.2
percentage points from 1993 to 1996.

Other measures of children's material well-being have improved
recently as well. Since the early 1990s the share of children in
households reporting that they did not have enough food to eat has
decreased, the share of households with children living in inadequate
housing has fallen, and children's use of basic health services has
increased. Continued declines have also been recorded in infant and
child mortality rates, and some measures of children's educational
achievement have improved.

Nevertheless, many children remain economically vulnerable. In 1996
one in five children was officially poor; in 1995 one in nine lived in
households paying more than half of their income for housing, and one
in seven did not have health insurance; and in 1994 one in 56 lived in
households where children experienced hunger due to inadequate
resources for food. These factors place children at risk of both
current and future hardship, as many of these factors may be critical
to children's long-term development.

This Administration has adopted a range of strategies to improve the
economic and social well-being of children. The first of these is to
put in place a system that guarantees that children's basic needs are
met. For this reason the Administration has supported major
initiatives to expand health insurance, child care, and subsidized
housing and has substantially strengthened the child support
enforcement system. The second strategy is to provide financial
support to needy families in a way that promotes work and personal
responsibility. To achieve these goals the Administration proposed and
the Congress enacted increases in the minimum wage, an expansion in
the earned income tax credit (EITC), and a major restructuring of the
welfare system. The third strategy is to invest in programs that
enrich children's educational opportunities, by expanding the Head
Start program and encouraging higher standards for elementary and
secondary schools.

This chapter begins by describing recent economic and demographic
trends that have influenced the economic well-being of children, and
recent programs designed to improve the economic status of families
with children. The second section reports on changes in two key
components of children's material well-being: food sufficiency and
housing conditions. The third section describes recent changes in
children's health outcomes, access to health care, and health
insurance coverage rates. The concluding section discusses child care
and educational programs for children.

TRENDS IN THE ECONOMIC WELL-BEING OF CHILDREN

THE LINK BETWEEN INCOME AND CHILDREN'S WELL-BEING

The adequacy of family income is a critical predictor of both the
present and the future well-being of children. Children who grow up in
low-income families score lower on standardized academic achievement
tests, are less likely to complete high school, complete fewer years
of school, and are likely to have lower earnings when they enter the
labor market than children who grow up in higher income families.
Most studies find that family income is more strongly correlated with
children's achievement than parental schooling or family structure.

Low family income might affect children's well-being for any of
several reasons. One is that low-income parents may not be able to
afford to invest as much in the things that improve their children's
well-being, such as food, shelter, medical care, and education. A
second is that the poor are more likely to live in neighborhoods with
a high concentration of poverty and thus may face higher crime rates,
poorer quality schools, and more limited connections to mainstream
economic activity. A third is that low-income families may experience
higher levels of emotional distress, due to the economic pressures of
living on a limited income.

Finally, income may be highly correlated with children's achievement
not because income directly affects child well-being, but because
income is associated with some other, hard-to-measure factor that does
affect child well-being, such as the value that parents place on
education. For example, children from high-income families may perform
better on standardized academic tests than children from low-income
families not because they have higher incomes but because their
parents encouraged them to work harder in school. If this is so,
increasing family income will not necessarily increase children's
academic achievement unless it also increases parents' commitment to
their children's education. A recent study found that more
sophisticated techniques that control for potential differences across
families produced lower estimated impacts of family income on child
well-being than suggested by simple correlations of family income and
child well-being.

MEASURING TRENDS IN CHILD POVERTY RATES

One of the most commonly used measures of the adequacy of family
income is the poverty rate. The poverty rate is the percentage of the
population who live in families with before-tax cash incomes below a
defined level of need, called the poverty line. The official poverty
line in use today was devised in the early 1960s and based on the
minimum cost of a nutritionally adequate diet. This amount was
multiplied by three, because data from the late 1950s suggested that
the typical family spent one-third of its income on food. Since then
the poverty line has been updated annually for inflation using the
consumer price index for all urban consumers. In 1996 the poverty line
for a family of two adults and two children was $15,911. Many people
have argued that the official poverty measure should be modified to
account for family income and family income requirements differently.
Box 3-1 describes a recent proposal by the National Research Council
to change the way we measure poverty.

------------------------------------------------------------------------------
Box 3-1.--How Does Our Poverty Measure Affect Our Conception of
Poverty?

A 1995 report by the National Research Council (NRC) recommended a
number of changes in the way we measure poverty. Its recommendations
include the following:

 Defining income. On the one hand, the definition of family income
should be expanded to include other important sources of purchasing
power, such as the EITC, food stamps, and housing subsidies. On the
other hand, some necessary expenditures that reduce a family's
resources available for basic consumption needs should be subtracted
from income, such as taxes, necessary child care and other
work-related expenditures, child support payments, and out-of-pocket
medical expenditures.

 Setting a threshold. Poverty thresholds should be adjusted to
provide a more accurate measure of family income requirements. First,
the consumption bundle used to derive thresholds should be based on
food, clothing, and shelter, not food consumption alone. Second,
thresholds should reflect regional variations in housing costs. Third,
thresholds should be adjusted for family size in a more consistent way
than currently. Finally, thresholds should be updated to reflect
changes in expenditure patterns over time.

Box 3-1.--continued

A recent study used key elements of the NRC proposal to estimate
alternative poverty rates from 1991 to 1996. These estimates produced
increases in poverty from 1991 to 1993 similar to, and decreases in
poverty from 1993 to 1996 somewhat larger than, those under the
official measure. In addition, under the alternative measure a smaller
proportion of the poor are children, black, or members of
female-headed households. These changes reflect the fact that the new
measure more completely accounts for in-kind transfers, such as food
stamps and housing benefits, and for work-related expenditures. As a
result, the new measure tends to decrease the relative poverty rate of
persons who are more likely to receive in-kind transfers, and to
increase the relative poverty rate of employed low-income persons with
higher work-related expenses.
------------------------------------------------------------------------------

Chart 3-1 shows that the poverty rate for children declined sharply
from 1960 to 1969 and has since trended upward, with peaks in 1983 and
1993. (Throughout this chapter ``children'' refers to persons under age
18 except where stated to the contrary.) Chart 3-1 also illustrates an
experimental poverty measure developed by the Bureau of the



Census, which includes taxes and in-kind transfers in family income.
Including taxes and transfers reduces the estimated poverty rate in
each year but does not substantially affect the trend in poverty from
1979 to 1993. Since 1993, poverty rates have declined more rapidly
under the experimental than under the official measure. This is largely
attributable to recent expansions in the EITC, which affect the
experimental but not the official measure of poverty.

Estimates of changes in the poverty rate are sensitive to the method
used to adjust the poverty line for inflation. Some have argued that
the price index used in the official poverty measure has overestimated
the actual level of inflation. (See the 1997 Economic Report of the
President for a discussion of this issue.) Under some alternative
estimates of poverty that incorporate different inflation estimates,
poverty trends for children are flat or down over the last several
decades.

Table 3-1 shows poverty rates for children of different ages, races,
family status, and incomes in 1996. In that year 20.5 percent of all
children were poor, 9.0 percent were in extreme poverty (defined here


~
TABLE 3.1-C~hildren with Family Incomes Below Different
Income Cutoffs, 1996
[Percent of children in each category]
------------------------------------------------------------------------------
Family income
Demographic
~      category                   Less than half   Less than   Less than twice
of poverty line  poverty line  poverty line
~------------------------------------------------------------------------------
Age of child:ï¿½1A1

Under 6 . . . . . . . . . . .       10.5            22.7           46.2
6-17. . . . . . . . . . . . .        7.4            18.3           40 7

Race/ethnicity of child:

White . . . . . . . . . . . .        6.6            16.3           38.2
Black . . . . . . . . . . . .       20.6            39.9           68.0
Hispanic. . . . . . . . . . .       ~14.7            40.3           72.0

Family status:

Female~-headed . . . . . . . .       25.8            49.3           76.3
Married couple. . . . . . . .        2.8            10.1           31.0

All children. . . . . . . . .        9.0            20.5           43.2
------------------------------------------------------------------------------
1ï¿½1AChildren in families.
Note.~--Income is before-tax cash income.
Source: Department of Commerce (Bureau of the Census).


as family income less than half the poverty line), and 43.2 percent
were poor or near poor (defined here as family income less than twice
the poverty line). The poverty rate for children under age 6 was 1.25
times that for children aged 6-17, the rate for black and Hispanic
children was 2.5 times that for white children, and the rate for
children in female-headed households with no husband present was
nearly five times that for children in married-couple families. Over
one-quarter of children in female-headed families lived in families
with incomes below half the poverty line, and over three-quarters of
this group lived in families with incomes below twice the poverty
line.

EXPLAINING RECENT CHANGES IN CHILD POVERTY

Changes in family structure, labor market opportunities, and transfers
are all likely to have an important influence on child poverty. This
section briefly describes each of these three factors. It then
estimates the relative influence of these factors on changes in child
poverty since 1979.

Family Structure

Changes in family structure are likely to have had a substantial
influence on child poverty rates over the past few decades. The
percentage of children living with their mother only has nearly
tripled since 1960. This reflects increases both in the percentage of
children living with a mother who is divorced or who is married but
not currently living with her husband and in the percentage living
with a never-married mother (Chart 3-2). Because children in
female-headed households have poverty rates nearly five times those of
children in married-couple households, an increase in the percentage
of children in female-headed households is likely to increase child
poverty.



Children in female-headed households have a higher risk of living in
poverty for two reasons. First, most single mothers do not receive
child support and must therefore rely on a single income. Nearly
two-thirds of all divorced, separated, or never-married women with
children did not receive child support payments in 1991. Second, that
single income is likely to be lower in a female-headed than in a
male-headed household, because women typically earn less in the labor
market than men. In 1996 the median earnings of full-time, year-round
workers were about 25 percent lower for women than for men.

Macroeconomic and Labor Market Conditions

Both macroeconomic and labor market conditions can affect child
poverty because they influence the quality and quantity of jobs
available to parents. Table 3-2 shows how changes in child poverty
rates are related to two key indicators of macroeconomic performance:
the unemployment rate and the economic growth rate, as measured by
annual growth in real gross domestic product per capita. The marked
decline in child poverty from 1959 to 1969 coincided with both high
economic growth rates and decreases in unemployment. Some studies have
attributed the decline in poverty over this period to these strong
macroeconomic conditions.



TABLE 3-2.--Changes in Child Poverty Rate and
Selected Macroeconomic Indicators
____________________________________________________________________________
Change in official   Average annual     Change in
poverty rate of    growth rate in    unemployment
Period                 children           real GDP          rate~
(percentage         per capita      (percenta~ge
points)           (percent)          points}
------------------------------------------------------------------------------
1959-69 . . . . . . . . .     -13.3                   3.0              -2.0
1969-79 . . . . . . . . .       2.4                   2.1               2.3
1979-89 . . . . . . . . .       3.2                   1.8               -.5
1989-93 . . . . . . . . .       3.1                    .3               1.6
1993-96 . . . . . . . . .      -2.2                   1.8              -1.5 -----------------------------------------------------------------------------
Sources: Department of Commerce (Bureau of the Census and Bureau of Economic Analysis Department of Labor (Bureau of Labor Statistics).


Despite continued strong rates of economic growth, the child poverty
rate increased during the 1970s and 1980s. This was partly a result of
the increase in the unemployment rate from 1969 to 1979, and partly
attributable to an increase in wage inequality since the 1970s. (See
Chapter 4 of the 1997 Economic Report of the President for a
discussion of these trends.) Two recent studies have concluded that
the increases in overall poverty in the 1980s were largely
attributable to increases in wage inequality and to decreases in the
real wages of low-wage workers.

During the 1990s changes in child poverty have been more closely
aligned with changes in unemployment and economic growth rates. The
increase in child poverty from 1989 to 1993 coincided with increases
in unemployment and low economic growth rates, whereas the decrease
from 1993 to 1996 coincided with lower unemployment and higher rates
of economic growth.

Changes in Transfer Policy

One other factor that has had an important influence on child poverty
is changes in the generosity of the tax-and-transfer system. The real
value of cash transfers available to low-income families with children
has deteriorated significantly since the 1970s. This reflects a
decline in the real value of benefits under the Aid to Families with
Dependent Children (AFDC) program, the main cash assistance program
for low-income families with children until 1996. Although this
decline was offset somewhat by expansions in food stamps, combined
benefits from both AFDC and food stamps have also decreased (Chart
3-3).

Since 1993, expansions of the EITC have increased the transfers
available to low-income working families. In addition, the welfare
system has been restructured to promote work and family
responsibility. These changes are described further below.



Assessing Relative Magnitudes--A Decomposition

Table 3-3 presents estimates of the impact of changes in family
composition, earnings and other before-tax-and-transfer income, and
taxes and transfers on the change in child poverty since 1979. It
presents two measures of poverty: the official measure, which is based
on before-tax cash income, and an alternative measure, which includes
both taxes and means-tested food and housing transfers. These
estimates may not accurately reflect the full impact of each of these
factors on poverty over this period, because they assume that the
observed changes in family composition have not been influenced by
changes in underlying poverty rates for married couples and
single-parent families. These estimates may also be sensitive to the
order in which each income source is accounted for in the analysis.

The first line of the table shows the impact of changes in family
structure on changes in the child poverty rate for various periods
since 1979. It shows how changes in the percentage of children living
in each of three family types--married couples, female householders
with no husband present, and male householders with no wife
present--would have affected child poverty in each period, if the
poverty rates of each group had not changed. The second line shows the
impact of market earnings. It shows the effect of changes in
before-tax-and-transfer poverty rates of children in each family
category. The third line shows the impact of cash transfers (social
insurance and welfare payments). It shows the effect of changes in the
percentage of children within each family category whose incomes are
brought above the poverty line when cash transfers are included in
income. The fifth and sixth lines show similar calculations for
means-tested food and housing transfers and for taxes.


TABLE 3-3.--Accounting for Changes in Child Poverty~~
[Percentage points]
------------------------------------------------------------------------------
Factor                  1979-89    1989-93     1993-96     1979-96
------------------------------------------------------------------------------
Change in ~official poverty measure
attributable to changes in:
Family structure . . . . . . . . .     1.2        0.8         0.3         2.3
Earnings and other before-tax-and
transfer income . . . . . . . . .     1.1        3.5        -3.0         1.6
Social insurance and welfare
payments. . . . . . . . . . . . .     1.0       -1.1          .5          .4
Total change in official
poverty measure . . . . . . . .     3.2        3.1        -2.2         4.1
Change in extended poverty measure
attributable to changes in:
Means-tested food and housing
transfers . . . . . . . . . . . .      .4        -.3          .0          .1
Taxes~. . . . . . . . . . . . . . .      .3         .0        -2.5        -2.2
~   Total change in extended poverty
measure . . . . . . . . . . . .     4.0        2.9        -4.7         2.2
------------------------------------------------------------------------------
Note.--A positive number indicates an increase, and a negative number a
decrease, in the child poverty rate resulting from that factor.
Detail may not add to totals because of rounding.

Sources: Department of Commerce (Bureau of the Census) and Office of
Management and Budget.~

~~~
These calculations imply that the increase of 3.2 percentage points in
the official poverty rate from 1979 to 1989 is attributable to changes
in family structure (1.2 percentage points), increases in
before-tax-and-transfer poverty (1.1 percentage points), and decreases
in social insurance and welfare payments (1.0 percentage point).
Changes in food and housing transfer payments further increased the
extended poverty measure by 0.7 percentage point.

By contrast, the 2.9-percentage-point increase in the extended child
poverty measure from 1989 to 1993 is mainly attributable to an
increase in before-tax-and-transfer poverty (3.5 percentage points)
and to changes in family composition (0.8 percentage point). These
factors were offset by transfers, which tended to decrease poverty
over this period.

Finally, the table suggests that the 4.7-percentage-point decline in
the after-tax-and-transfer extended child poverty measure from 1993 to
1996 is attributable to both a 3.0-percentage-point decrease in
before-tax-and-transfer poverty and a 2.0-percentage-point increase in
the proportion of children moved out of poverty by taxes and transfers
(primarily the EITC). Changes in family structure had a small impact
on child poverty during this period, increasing the poverty rate by
0.3 percentage point from 1993 to 1996.

Overall, this table suggests that changes in family structure have put
upward pressure on child poverty rates since 1979. The long-term
increase in wage inequality has been reflected in an increase in
before-tax-and-transfer poverty since 1979, although there have also
been cyclical fluctuations in before-tax-and-transfer poverty in the
1980s and 1990s. Finally, the tax-and-transfer system did more to
reduce child poverty in 1996 than in 1979. This largely reflects the
recent expansion of the EITC.

POLICY INITIATIVES TO SUPPORT FAMILY INCOMES

This Administration has established a number of initiatives to expand
the resources available to families with children in a way that
creates positive incentives for work and personal responsibility.
Recent policy initiatives include:

 A higher minimum wage. The Congress and the Administration
increased the minimum wage from $4.25 to $4.75 per hour in October
1996, and to $5.15 per hour in September 1997, bringing the minimum
wage to its highest level in real terms since 1984.

 An expanded EITC. In 1993 the Congress approved the
Administration's proposal to expand the EITC. The EITC is a refundable
tax credit designed primarily for low-income working families with
children. In 1997 the maximum credit for a family with one child was
$2,210 (a 54-percent increase since 1993), and that for a family with
two or more children was $3,656 (a 140-percent increase since 1993).

 Welfare reform. The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 dramatically restructured the welfare
system to promote work and personal responsibility, and to allow
States greater flexibility in designing welfare assistance programs.
The law converted the Aid to Families with Dependent Children program
into a new block grant, called Temporary Assistance for Needy
Families. To promote work and personal responsibility, the law
includes new work requirements, a 5-year limit on the length of time
that families can receive assistance, and new measures to strengthen
child support enforcement. The law also expands funding for child care
to make it easier for families to move from welfare to work. Even
before the new welfare law was enacted, the Administration had granted
waivers to 43 States to allow them to reform their welfare systems to
require work, make work pay, and encourage parental responsibility.

 Increased child support enforcement. Federal legislation in 1993,
1994, and 1996 included measures designed to make the child support
enforcement system more effective. Key reforms include streamlined
procedures to establish paternity, a new-hire reporting system to
track delinquent parents across State lines, uniform interstate child
support laws, computerized registries of statewide child support
collections, and tough new penalties, such as revocation of the
driver's licenses of delinquents.

These initiatives have already had noticeable effects. The combination
of a higher minimum wage with an expanded EITC guarantees a more
adequate income to working families with children. A single mother
with two children can now earn enough, if she works full-time, to
bring her income with the EITC above the poverty line. In addition,
because the EITC benefit increases the financial reward to working, it
encourages parents to enter the labor market. Research has shown that
expansions in the EITC have been associated with increases in the
employment rate of single mothers with children.

The changes to the welfare system have already been associated with a
large decline in welfare caseloads. The number of children on welfare
declined by 23 percent from January 1993 to June 1997. Research
suggests that the decline in welfare caseloads from January 1993 to
January 1997 was due to a strong economy and to recent State welfare
reforms that the Federal waiver process facilitated.

Finally, the child support enforcement system has become more
effective in guaranteeing that absent parents fulfill their
obligations to pay child support. From 1992 to 1996, child support
collections increased by 50 percent, to a record $12 billion. In
addition, the number of paternities established for children born to
unmarried women rose to 1 million in 1996, almost double the number in
1992. These changes are reflected in a substantial increase from 1992
to 1996 in the percentage of never-married mothers who received child
support payments.

OTHER MEASURES OF CHILDREN'S MATERIAL WELL-BEING

Two alternative measures of the adequacy of housing conditions and the
sufficiency of household food supply suggest that the material
well-being of children has improved since 1989. These trends are
consistent with the reduction in child poverty over this period, under
the extended measure of child poverty that includes taxes and
means-tested food and housing benefits.

AVAILABILITY OF FOOD

One alternative measure of children's material well-being is the
adequacy of household food supply. It has been shown that households
that report having an insufficient food supply consume smaller
quantities of essential nutrients than other households.

Estimates from the Department of Agriculture's Continuing Survey of
Food Intakes by Individuals (CSFII) provide information on the
percentage of children living in households where there sometimes or
often was not enough to eat in the last 3 months. These estimates may
overstate the prevalence of hunger among children, if many adults
typically go without food before they let their children go hungry.
Estimates from the CSFII suggest that  the percentage of children
living in households without enough to eat has fallen from 4.1 percent
in 1989-91 to 3.0 percent in 1994-96 for all children, and from 13.5
percent to 9.4 percent for children in households with incomes below
130 percent of the poverty line (Table 3-4).


~        TABLE 3-4.~--Children in Households Reporting That There Was
Sometimes or Often Not Enough to Eat During the Last 3 Months
[Percent]
~~---------------------------------------------------------------------------
Category                      1989-91        1994-96
---------------------------------------------------------------------------
Children in households at or below 130 percent
of poverty line . . . . . . . . . . . . . . . .         13.5           9.4
Children in households above 130 percent
of poverty line . . . . . . . . . . . . . ~. . .           .8            .6
All childrenï¿½1A . . . . . . . . . . . . . . . . . .          4.1           3.0
---------------------------------------------------------------------------
Source: Department of Agriculture.


The Department of Agriculture's Food and Nutrition Service has
recently developed a detailed questionnaire that makes it possible to
separately identify whether children or adults in the household
experienced hunger. This questionnaire was incorporated into the April
1995 Current Population Survey. The survey found evidence that hunger
is more likely among adults than among children: among households with
children, 4.3 percent had adult members who had been hungry in the
last year due to insufficient resources, but only 1.8 percent had
children who had been hungry in the last 12 months because the parents
could not afford to buy more food. This survey also suggests that it
is unusual for children to go without food for an extended period: 0.9
percent of households with children reported that at least one of
their children had skipped a meal in the past year, and 0.2 percent
reported that their children had not eaten for a whole day at least
once in the past year because of insufficient resources.

ADEQUACY OF HOUSING

Estimates from the Annual Housing Survey and the American Housing
Survey present a mixed picture of the changes in housing conditions of
households with children. On the one hand, the percentage of these
households that have high rent burdens has increased substantially.
The percentage of households with children that spend more than half
their income on housing has increased from 6.5 percent in 1978 to 11.5
percent in 1995 (Table 3-5). For renters with very low incomes
(defined as households with incomes below 50 percent of the median
income for their area), this figure has increased from 31.0 percent to
37.6 percent.







TABLE 3-5.--Housing Problems Among Households with Children
[Percent of all households with chil~~dren]
---------------------------------------------------------------------------
Housing cost or condition               1978       1989    1993    1995
----------~~~-----------------------------------------------------------------
All households with children:
Housing costs more than 50 percent
of income  . . . . . . . . . . . .   6.5        8.7     10.9    11.5
Housing costs 31-50 percent
of income . . . . . . . . . . . .    8.3       15.1     15.6    16.7
Severe physical problems with
housing . . . . . . . . . . . . .    3.1        3.2      2.0     2.2
Moderate physical problems with
housing . . . . . . . . . . . . .    5.6        5.5      5.1     5.0
Crowding
(more than 1 person per room) . . .  9.4        7.0      6.3     6.6
Very low income households with children:
Housing costs more than 50 percent
of income . . . . . . . . . . . .    31.0       36.1     38.2    37.6
Housing costs 31-50 percent
of income . . . . . . . . . . . .   28.0       30.6     29.1    30.6
Severe physical problems with
housing . . . . . . . . . . . . .    7.5        5.8      3.6     3.4 ,
Moderate physical problems with
housing . . . . . . . . . . . . .   10.5       12.0     10.1     9.5
Crowding
(more than 1 person per room) . .   21.9       16.7     14.2    17.0
---------------------------------------------------------------------------   ~
Note.--Income is before-tax cash income. Very low income is defined as family income below half the median for the area.

Source: Department of Housing and Urban Development (Office of Policy Development and Research). ~


On the other hand, measures of housing quality for households with
children have shown improvement. The percentage of all households with
children living in housing with either moderate or severe physical
problems fell from 8.7 percent in 1978 to 7.2 percent in 1995, and
from 18.0 percent to 12.9 percent for very low income renters. In
addition, households with children were less likely to live in crowded
living situations in 1995 than in 1978: the percentage living in
housing with more than one person per room dropped from 9.4 percent to
6.6 percent for all households and from 21.9 percent to 17.0 percent
for very low income renters.

These findings are consistent with the results of a recent study which
found that many measures of the housing quality of children in
households in the bottom income quintile had improved since the early
1970s. These children were more likely to live in modern (that is,
post-1940 vintage) housing and more likely to have air conditioning in
the 1990s than in the early 1970s. On the other hand, this study also
found that children in the bottom household income quintile were more
likely to live in neighborhoods where their parents reported that
crime was a serious problem in 1991-93 than in 1973-75.

NEW HOUSING POLICY INITIATIVES

This Administration will continue to make housing quality and
affordability high priorities in fiscal 1999. Key initiatives include:

 Expanding the low-income housing tax credit. The low-income
housing tax credit gives States the authority to allocate a fixed pool
of tax credits to developers of affordable housing. For fiscal 1999
the President has proposed increasing the total amount of tax credits
available to each State from $1.25 to $1.75 per State resident.

 The HOME Investments Partnerships Program. The Administration has
expanded funding for the HOME program by 50 percent since 1993, to
$1.5 billion in fiscal 1999. This program offers funding to States,
cities, and counties to develop affordable housing options for
low-income families. These funds can be used for rehabilitation of
existing housing, new housing development, and tenant-based rental
subsidies. To date, almost 310,000 families have been awarded
assistance through this program.

HEALTH STATUS AND HEALTH INSURANCE

HEALTH OUTCOMES

Over the past 10 years infant and child mortality rates have continued
to decline. Other measures, however, such as the incidence of chronic
health conditions and of low birthweight, are stable or increasing.

One of the most frequently cited measures of children's health status
is the infant mortality rate. Infant mortality has continued its
decades-long decline in the 1990s, falling from 9.8 deaths per
thousand live births in 1989 to 7.2 per thousand in 1996 (Chart 3-4).
During the same period the incidence of low birthweight (weight at
birth below 2,500 grams, or about 5.5 pounds) has increased slightly,
from 7.0 percent of live births in 1989 to 7.3 percent in 1995. This
shows that the improvement in infant mortality in the 1990s has been
entirely due to factors other than reductions in low-birthweight
births. This improvement has been attributed in part to two key
interventions. First, new medical treatments have been developed for
infant respiratory disorders, an important cause of mortality among
preterm infants. Second, there has been a marked decline in sudden
infant death syndrome since researchers discovered that these deaths
could be prevented by placing babies on their backs to sleep.

The slightly increased incidence of low birthweight since the
mid-1980s is due in part to an increase in multiple births and births
to older women. Failure to prevent low-birthweight births is costly to
society because many of these infants require more-expensive medical
interventions than do infants born at normal weight. In addition,
low-birthweight infants have a much higher risk of infant mortality.
In 1995 nearly two-thirds of all infant deaths occurred among the 7.3
percent of all infants born at low birthweight.



Mortality rates of older children have also fallen throughout the
1990s, continuing a steady decline since 1960 (Chart 3-5). Much of the
decline in the 1960s has been attributed to medical interventions,
which have minimized the risk of death from such conditions as
congenital anomalies of the heart, infectious diseases, and certain
childhood cancers. By contrast, the reduction in mortality during the
1980s has been primarily attributed to a decline in injury-related
mortality.

The one exception to this pattern is among those aged 15-19, whose
mortality rates have increased since 1985. This largely reflects the
more than doubling in homicides among adolescents since 1985. The
homicide rate for black male adolescents has nearly tripled since
1985, and in 1994 it was nearly seven times higher than the homicide
rate for all adolescents.

Other indicators of child health have shown less progress in the 1980s
and 1990s. The prevalence of asthma among children has increased
substantially since the mid-1980s. The prevalence of most other
chronic health conditions has fluctuated, without a consistent upward
or downward trend.



HEALTH INSURANCE

One of the critical determinants of children's access to health care
is whether or not they have health insurance. Research has shown that
children with health insurance coverage are more likely to receive
preventive and primary care, and more likely to have a regular
relationship with a primary care provider, than uninsured children.
Insured children are also more likely to receive treatment for such
conditions (when they are present) as injury, asthma, and acute
earache. They are less likely to be hospitalized for conditions that
appropriate outpatient care could have prevented, and they receive
less intensive hospital services when admitted to the hospital.

Since 1987 the Congress and the Administration have substantially
expanded children's access to health insurance through Medicaid, the
primary government program offering health insurance to low-income
children. Before 1987 Medicaid was mainly restricted to children in
very low income, single-parent families. Since then a series of
legislative initiatives have extended Medicaid to much broader groups
of children. By 1996 all pregnant women and all children under age 6
who had family incomes below 133 percent of the poverty line, and all
children age 13 and younger with family incomes below 100 percent of
the poverty line, were eligible for Medicaid. Coverage will continue
to be phased in for all children born after September 1983 until poor
children of all ages are covered. In addition, many States have
expanded children's eligibility for Medicaid beyond these federally
required levels.

The net result of these expansions is that a much larger share of the
child population are now enrolled in Medicaid. Estimates from the
Current Population Survey suggest that the proportion of children who
are enrolled in Medicaid increased from 16 percent in 1989 to 23
percent in 1995 (Table 3-6). For children under age 6 the increase in
Medicaid coverage was even larger, and by 1995, 30 percent of all
children under age 6 were covered by Medicaid.


~~
TABLE 3-6.-Children with Health Insurance, by Age of Child
and Type of Coverage
[Percent]
------------------------------------------------------------------
Age of child      Any insurance    Medicaid     Private insurance
1989     1995   1989   1995     1989      1995
------------------------------------------------------------------
Current Population Survey:

Under 6 . . . . .~ 87.2    86.7   20.3   29.6     70.6      60.4
6-17. . . . . .  ~ 86.4    86.0   13.2   19.9     75.3      69.1

All children. . ~ 86.7    86.2   15.7   23.2     73.6      66.1

Health Interview Survey:

Under 6 . . . . .~ 84.9    88.4   18.7   28.2      67.9     60.1
6-17~. . . . . . . 85.5    85.7   10.9   16.6      74.0     68.7
All children. .  85.3    86.7   12.8   20.6      71.8     65.7
-----------------------------------------------------------------
Sources: Department of Commerce (Bureau of the Census) and Department of Health and Human Services (National Center for Health Statistics).
~~~~~~~~~~~~

At the same time that Medicaid eligibility has increased, there has
been a reduction in children's private insurance coverage. This
decline is likely to have been driven in part by a general reduction
in employer-provided health insurance, which has affected both low-
and high-income families. It may also have resulted in part from newly
eligible families dropping their private insurance coverage in order
to enroll in Medicaid.

Studies have tried to estimate the extent to which the expansion in
Medicaid eligibility has crowded out private insurance coverage. These
studies have produced a wide range of estimates. One study found that
at least one person dropped private insurance coverage for every two
persons made eligible for Medicaid. Two other studies estimated that
anywhere between 0 and 25 percent of new Medicaid coverage displaced
existing private coverage.

Table 3-6 presents estimates of the change in insurance coverage for
children from 1989 to 1995 from two large household-based surveys, the
March Current Population Survey and the Health Interview Survey. Both
surveys suggest that the percentage of children under age 18 with
health insurance from any source remained constant from 1989 to 1995.
These surveys provide a somewhat different picture, however, of the
change in total insurance coverage for young children. Whereas the
Health Interview Survey finds a moderate increase in insurance
coverage for children under age 6, the Current Population Survey finds
no increase for this group. This may result from changes in question
content in the Health Interview Survey in 1990. It may also reflect
differences in the way  the two surveys ask about health insurance
coverage.

Even though there have not been substantial increases in the
percentage of children with health insurance, the recent increase in
the percentage of children covered by Medicaid may have important
implications for the quality of children's medical care. On the one
hand, since Medicaid requires no copayments from the insured, covers
prescription drugs, and in many States covers services such as dental
care, it may promote greater utilization of medical care than private
insurance. On the other hand, since provider reimbursement levels tend
to be much lower under Medicaid than under other insurance plans,
fewer providers may be willing to provide care to children with
Medicaid coverage than to children with private insurance.

Although research to date on the impact of the recent Medicaid
expansion on children's utilization of medical care is inconclusive,
Table 3-7 suggests that basic medical care services received by
low-income children have increased. The average number of physician
visits per year rose by more than 30 percent for poor children in fair
or poor health, and by more than 10 percent for poor children in
excellent or good health, from 1987-89 to 1993-95. By contrast, during
the same period the average annual number of physician visits
decreased for children with family incomes above twice the poverty
level.


~
TABLE 3-7.--Average Number of Physician Contacts in Last Year
for Children Under 15, by Family Income
[Number of contacts]
------------------------------------------------------------------------------
Good or excellent health     Fair or poor health
Family income            1987-89   1993-95          1987-89   1993-95
------------------------------------------------------------------------------
Below poverty line . . . . . .     3.6       4.0              10.8      14.2
Poverty line to twice poverty
line. . . . . . . . . . . . .     3.8       3.9              15.2      16.2
Above twice poverty line . . .     5.0       4.9              22.6      20.7
------------------------------------------------------------------------------
Note.--Income is before-tax cash income.~
Source: Department of Health and Human Services (National Center for Health
Statistics).~


This evidence is also consistent with data pointing to an increase in
the share of pregnant women and children receiving at least a minimal
level of primary care. The percentage of children under age 5 who did
not see a doctor during the previous year fell from 8 percent in 1983
to 5 percent in 1994, while the comparable percentage of children aged
5-17 decreased from 27 percent to 21 percent (Chart 3-6). In addition,
the percentage of pregnant women who initiated care in the first
trimester of pregnancy increased to a record high of 82 percent in
1996, from 76 percent in 1989.



RECENT INITIATIVES TO EXPAND CHILDREN'S ACCESS TO HEALTH INSURANCE

Despite recent efforts to expand children's access to health
insurance, a large share of children remain uninsured. Estimates from
the Current Population Survey suggest that 15 percent of all children
did not have health insurance in 1996. Table 3-8 presents estimates
from the Current Population Survey on the characteristics of these
children. Roughly 21 percent are potentially eligible for Medicaid,
because they



TABLE 3-8.-Uninsured Children by Family Income, 1996
~~ ----------------------------------------------------------------------------
Family income and age of child                    Percent of all ~
uninsured children
-----------------------------------------------------------------------------
Below poverty line . . . . . . . . . . . . . . . . . . . .           32.6
Under 6 . . . . . . . . . . . . . . . . . . . . . . . . .            9.8
6-11 . . . . . . . . . . . . . . . . .  . . . . . . . . .           10.9
12-17 . . . . . . . . . . . . . . . .   . . . . . . . . .           12.0
Between 100 and 150 percent of poverty line  . . . . . . .           20.0
Between 150 and 200 percent of poverty line  . . . . . . .           16.4 ~
Above twice poverty line . . . . . . . . . . . . . . . . .           30.9
----------------------------------------------------------------------------
Note.-Income is before-tax cash income. ~

Source: Department of Commerce (Bureau of the Census)  ~


are under age 12 and have family incomes below the poverty level. An
additional 48 percent either are poor children aged 12 and over or
have family incomes between 100 percent and 200 percent of the poverty
level. Their family incomes are low enough so that the cost of health
insurance may pose a significant barrier, but probably not low enough
to guarantee them eligibility for Medicaid.

This Administration has developed a two-pronged effort to continue
progress in increasing insurance coverage for low-income children. The
first component is to extend insurance coverage to more low-income
children through the new Children's Health Insurance Program (CHIP).
This program offers $24 billion in new Federal funding to States over
the next 5 years to expand health insurance programs for uninsured
low-income children. States have the option of using the funding to
expand children's health insurance coverage through Medicaid, separate
State programs, or a combination of the two. In general, States must
use their allocation to cover children in families below twice the
poverty level, or within 50 percent of the State's current Medicaid
income limits for children if the State already covers children at or
near twice the poverty level. States must contribute some of their own
funds to the program in order to receive these Federal funds, and they
must maintain Medicaid eligibility standards at least equal to those
in effect in June 1997.

In addition, the President will make enrolling eligible uninsured
children in both Medicaid and CHIP a priority. In partnership with the
States, health care providers, and business and community groups, the
Administration will identify and encourage successful outreach
campaigns to enroll up to 5 million uninsured children. To facilitate
this effort, the proposed budget for fiscal 1999 includes an option
for States to determine presumptive eligibility for Medicaid among
children at sites such as schools and day care centers. It will also
allow States to receive Federal funding for outreach activities at a
90-percent matching rate from a fixed pool of funds. These legislative
proposals will be complemented by administrative actions to simplify
enrollment of uninsured children.

CHILD CARE AND EDUCATION

CHILD CARE

Over the past two decades the adequacy and affordability of day care
have become increasingly salient issues, as a growing proportion of
mothers with young children have entered the work force. Whereas 30
percent of married mothers with one or more children under age 6 were
working in 1977, by 1997 that figure had risen to 61 percent. This
increase in employment of women with young children has translated
into a substantial increase in nonparental child care. Between 1977
and 1993 the number of children under 5 in nonparental child care
whose mother was working more than doubled. By 1993, 47 percent of
young children with employed mothers had their primary day care
arrangement in a day care center or a family day care home, and only 5
percent were cared for by a nonrelative in the child's home.

The affordability of child care is an especially critical issue for
low-income working families. Although Federal programs subsidize day
care costs for low-income families, a large share of these families do
not have access to subsidized care. Approximately 1 million low-income
children under 13 received federally subsidized care in fiscal 1995.
This compares with the approximately 10 million children under 13 with
employed mothers and family incomes below 200 percent of the poverty
level.

For families without access to subsidies, the cost of child care can
represent a substantial financial burden. In 1993 child care
expenditures represented 25 percent of annual income for those
families with annual incomes below $14,400 with employed mothers and
preschool children in paid child care. Comparable families with annual
incomes above $54,000 spent only 6 percent of their income on child
care.

The quality of child care is also a critical issue. Two recent studies
of regulated child care providers offer reason for concern. One study
found that 86 percent of child care centers surveyed provided mediocre
or poor care when judged from the perspective of child development,
and 12 percent were of such poor quality that the children's health
and safety needs were only partly met. The second study, of family day
care homes, found that 91 percent were of only adequate quality or
less.

The President's fiscal 1999 budget includes a dramatic increase in
Federal investments in child care to increase its affordability and
quality. Key initiatives would:

 Expand child care subsidies. The proposed budget builds on the
increases in child care subsidies legislated in 1996, by expanding
funding for the Child Care and Development Block Grant Program by $7.5
billion over 5 years. These new funds, combined with funds provided in
welfare reform, would allow States to provide child care subsidies to
more than 2 million low-income children by 2003--more than double the
number of children served in fiscal 1995.

 Increase tax credits for child care expenses. The proposed budget
would increase tax subsidies for working parents who pay for child
care expenditures, by expanding the child and dependent care tax
credit. The President's proposal would offer more help to 3 million
families with annual incomes below $59,000, providing nearly $5
billion in aid over the next 5 years. The President's proposal also
includes a new tax credit for private employers that offer child care
services for their employees.

 Expand after-school care for school-age children. The President's
proposed budget includes $800 million in new funding over 5 years to
dramatically expand the 21st Century Community Learning Program. This
program provides funding to school-community partnerships to establish
or expand before- and after-school programs for school-age children.
The program will serve up to half a million children each year.

 Improve early learning and child care quality. The President's
proposed Early Learning Fund would provide $3 billion over 5 years in
challenge grants to communities for programs that improve early
learning and the quality and safety of child care for young children.
The President's proposed budget also includes funding for scholarships
for up to 50,000 child care providers per year, and for improved
enforcement of State health and safety standards.

EARLY CHILDHOOD EDUCATION

Early childhood education programs can play a critical role in
preparing children aged 3-5 for entry into school and can have an
important effect on children's short-run and long-run development.
Research has found that children who participate in early childhood
education programs show large short-run gains in IQ, which persist
until entry into kindergarten. Research has also linked early
childhood education to a number of longer term outcomes, such as grade
retention and placement in special education programs. Studies of a
smaller number of programs have also shown early childhood education
to be associated with increases in high school graduation rates and
post-high school monthly earnings, and with a lower probability of
teen pregnancy.

One of the principal Federal programs supporting early childhood
education for disadvantaged children is the Head Start program. The
major focus of Head Start is support for enriched preschool programs
and development services for children aged 3-5. Federal guidelines
require that 90 percent of all children served be from families with
incomes below the poverty line. Head Start offers disadvantaged
children and their parents a range of services that focus on
education, social and emotional development, and health and nutrition.
With the establishment of the Early Head Start program in 1994, for
which disadvantaged children under age 3 are eligible, the range of
Head Start services was extended to younger children as well.

A recent nationwide study found that participation in Head Start was
associated with increased performance on the Peabody Picture
Vocabulary Test and a reduction in grade repetition for white and
Hispanic children, although it did not find similar gains for black
children. The study also found that both white and black children who
participated in Head Start were more likely to be immunized against
measles than nonparticipating children from the same family.

The President's proposed budget includes $3.8 billion in additional
funding over 5 years to help reach the goal of expanding participation
in Head Start to 1 million children in 2002, from 714,000 in fiscal
1993. This funding would also allow a doubling of participation in
Early Head Start, to 80,000 children by 2002.

ELEMENTARY AND SECONDARY EDUCATION

One of our society's most important investments in children is
elementary and secondary education. Elementary and secondary schools
play a critical role in preparing children for college and for entry
into the labor market. Research has shown that increases in
educational attainment are associated with increases in labor market
earnings:  each year invested in elementary or secondary education is
estimated to increase annual earnings by 5 to 12 percent. Investments
in elementary and secondary education can also achieve other important
social goals, such as the development of an informed electorate.

Measures of Student Performance

One of the key tools used in assessing the performance of our
elementary and secondary school students is the National Assessment of
Educational Progress (NAEP). The NAEP has two parts: the long-term
trends assessment, which has repeated the same set of questions since
the early 1970s to provide a consistent record of progress over time,
and the main assessment, a more recent set of tests designed to
reflect current testing methodology and educational content. The main
assessment also groups students into three levels of achievement based
upon collective judgments about what students should know and be able
to do in each subject area.

Evidence from the NAEP long-term assessment suggests that achievement
in science, mathematics, and reading has improved since the late
1970s. Charts 3-7 and 3-8 show average NAEP long-term





assessment scores for 13-year-old white, black, and Hispanic students
in these subjects. Chart 3-7 reveals increases in mathematics and
science scores since the late 1970s, which have been larger for black
and Hispanic than for white children. Improvement in reading scores
has been somewhat less dramatic overall (Chart 3-8), but both white
and black children have recorded measurable improvement since 1971.

Despite these recent gains, significant challenges remain for the
Nation's educational system. Evidence from the main NAEP assessments
suggests that many students do not achieve basic competency in
mathematics, science, or reading. The most recent main assessments
found that 38 percent of eighth-grade children performed below the
basic level in mathematics, as did 40 percent in science and 30
percent in reading. In addition, U.S. students do not perform well in
comparison with students in other countries. According to the
Third International Mathematics and Science Study, a study of half a
million children in 41 countries, U.S. eighth-graders had average
mathematics scores that were below those of 20 other countries.
Although U.S. eighth-graders performed better in science, they were
still outperformed by students in nine other countries.

A second challenge facing the Nation's educational system is the
substantial variation in the performance of schools across the
country. A recent study of first-grade students found that those
attending the top quarter of schools with respect to student
performance had average scores in both reading and mathematics nearly
75 points



higher than those of students in the bottom quarter. This
difference is approximately equal to the average achievement gain of
students from the spring of first grade to the spring of second grade.
In other words, by the end of second grade the average student's
achievement in the bottom-ranked schools will just about equal that of
students finishing first grade in the top schools.

Differences in student performance are evident across States as well.
For example, in 1994 the share of fourth-graders in public  schools
who scored at or above the basic level in reading ranged across 39
States from a low of 40 percent to a high of 75 percent, and in 1996
the share of eighth-graders in public schools who attained at least
the basic level of proficiency in mathematics ranged across 40 States
from a low of 36 percent to a high of 77 percent.

Impact of School Inputs on School Performance

A substantial body of research has investigated the extent to which
school quality is related to measurable inputs, such as expenditures
per pupil, pupil-teacher ratios, or the level of teacher training.
This research has had mixed results. On the one hand, most studies
that attempt to relate school resources to students' achievement on
standardized tests tend to find only weak evidence that these
resources do influence school quality. This may be because most
research in this area is based on samples that are not large enough to
find a statistically measurable effect. A recent study which combined
the results from a large number of other studies found stronger
evidence that school expenditures per pupil are positively associated
with student achievement.

On the other hand, studies that estimate the relationship between
school resources and students' earnings later in life tend to find
much larger effects. A recent study used data from the 1980 Census to
estimate the relationship between the average level of school
resources in the State in which workers were born and their subsequent
earnings. This study found that workers who had been born (and
probably attended school) in States with more abundant school
resources earned higher rates of return to each additional year of
schooling than other workers. A decrease in the pupil-teacher ratio by
five students was associated with an increase in the rate of return to
each additional year of school of 0.4 percentage point, and a
10-percent increase in teachers' pay was associated with a
0.1-percentage-point increase. (The average rate of return for all
workers in the sample was 5 to 7 percent.)

This literature also found that there are important dimensions of
school and teacher quality that are unrelated to school expenditure
patterns. After controlling for student and parent characteristics
likely to affect student performance, and even after controlling for
measurable characteristics of schools and classrooms, it is clear that
students in particular schools, or enrolled in particular teachers'
classes, consistently perform better than average. This suggests that
certain aspects of teacher or school quality that are not easily
measured, such as the teacher's level of enthusiasm or the school's
management style, may be critically related to student performance.

Recent Federal Initiatives in Primary and Secondary Education

Recognizing that the quality of primary and secondary education can
have an important influence on children's later economic
opportunities, the Administration has developed and supported a number
of initiatives to improve the quality of America's schools. In his
1998 State of the Union address the President proposed two major new
initiatives that would increase the financial resources available to
public schools:

 Smaller classes with qualified teachers in grades 1-3. The
President is proposing that $12.4 billion be devoted over 7 years
($7.3 billion over 5 years) to reducing class sizes in public schools
in grades 1 to 3 from a nationwide average of 22 pupils to an average
of 18, and to helping local school districts hire an additional
100,000 well-prepared teachers. The initiative will also provide funds
to States and local school districts to test new teachers, develop
more rigorous teacher testing and certification requirements, and
train teachers in effective reading instruction. This initiative will
help ensure that every child receives personal attention, learns to
read independently, and gets a solid foundation for further learning.

 New construction and renovation of school buildings. The
President is proposing Federal tax credits to pay interest on nearly
$22 billion in bonds to build and renovate public schools. This
initiative provides more than double the assistance of the
Administration's earlier school construction proposal, which covered
half the interest on an estimated $20 billion in bonds. Half of this
new bond authority would be allocated to the 100 school districts with
the largest number of low-income children, and the other half would be
allocated to the States.

These proposals build on a number of ongoing Administration efforts to
improve the quality of primary and secondary education. To increase
the educational opportunities of disadvantaged children, the
Administration has expanded the Title I program, which targets
resources to children in high-poverty schools. In addition, since it
is clear that some important differences in the quality of individual
teachers and schools are not directly related to the level of a
school's financial resources, the Administration has supported
initiatives to change the way schools operate, to better reward
performance, and to grant schools more flexibility in meeting
measurable performance standards. These are the key emphases of the
Goals 2000 and the Charter Schools programs. Finally, the
Administration has developed two new initiatives to improve literacy
and to increase students' access to the Internet:

 Title I--Education for the Disadvantaged. Title I provides funds
to raise the achievement of disadvantaged children. In 1994 the
President proposed, and the Congress adopted, changes to Title I to
focus resources on schools with a high percentage of children from
poor families, to raise standards of achievement for disadvantaged
students, and to give schools greater flexibility in helping students
meet these standards. The appropriation for Title I grants to local
education agencies was increased by about 20 percent from fiscal 1993
to fiscal 1998.

 Goals 2000. Enacted in 1994, the Goals 2000 program encourages
States to set rigorous academic standards for student performance and
to determine whether students are making progress in meeting these
goals. It also provides funding to support reform of individual
schools and for parental information and resource centers in each
State, to help parents become more involved in their children's
education.

 Charter Schools. The Federal Charter Schools program supports the
efforts of parents, teachers, and communities to develop innovative
public schools that are free from most of the rules and regulations
that apply to most public schools and are held accountable for raising
student achievement. Since the program's inception in 1995 over 700
charter schools have been established, and Federal funding has
increased from $6 million in fiscal 1995 to $80 million in fiscal
1998.

 The America Reads Challenge. The proposed America Reads program
is a multipronged effort to help States and communities ensure that
all children are reading well and independently by the end of the
third grade. Key initiatives include recruiting and training volunteer
reading tutors and helping families help their children build literacy
skills. In addition, the Administration has recruited work-study
students in 800 universities to help with tutoring initiatives.

 Technology. The Technology Literacy Challenge Fund and the
Technology Innovation Grants program are aimed at meeting four goals:
to connect all schools to the Internet, to provide teachers with
professional development in the use of technology, to put modern
computers in all schools, and to provide challenging software that
encourages children to learn more. These initiatives should help
prepare our children for the 21st century and keep the Nation
competitive in a global economy.

CONCLUSION

It is clear that children have shared in the benefits of the economic
recovery of the past 3 years. The child poverty rate fell from 1993 to
1996, and under an extended poverty measure that includes taxes and
means-tested food and housing benefits, the rate was lower in 1996
than in 1989. Other measures of well-being, such as health status,
educational achievement, food sufficiency, and housing quality have
also shown improvements during the 1990s. Yet many children remain
vulnerable, either because they have low family incomes, or because
they lack access to health insurance, or because they are not learning
basic mathematics, science, and reading skills in school. For this
reason the Administration will continue to invest in initiatives to
improve the well-being of children. Key initiatives for fiscal 1999
will focus on increasing access to child care and early childhood
education, improving the quality of primary and secondary education,
and increasing access to affordable housing for families with
children.