This brief explores how many low-income families with children are struggling to pay for basic needs and how expanding the child tax credit could help.

WHY THIS MATTERS

Experiencing material hardship early in life can have long-term negative effects on children’s health and development. Refundable tax credits like the child tax credit have been shown to lessen these hardships. As Congress considers modifying the child tax credit in 2025 as part of the debate around expiring provisions of the 2017 Tax Cuts and Jobs Act (TCJA), an understanding of the challenges that families with children are experiencing can help inform this debate.

WHAT WE FOUND

Findings from the Urban Institute’s December 2023 Well-Being and Basic Needs Survey (WBNS) show that the prevalence of material hardships, in particular food insecurity, remains high among families with children—with the highest prevalence among families with three or more children and families with low income. In 2023,

• about 4 in 10 nonelderly adults in households with children younger than 18 (42.4 percent) reported having difficulty meeting basic needs, such as food, housing, and health care;
• about 7 in 10 adults in low-income families with children (71.0 percent)—that is, families with incomes below 200 percent of the federal poverty level (FPL)—faced some form of material hardship; and
• about 3 in 10 adults living with children (30.4 percent) and more than half of adults in low-income families with children (55.1 percent) reported being food insecure.

Among low-income families with children, the likelihood of experiencing material hardship tended to increase with the number of children living in the household: more than three in four adults living with three or more children (76.2 percent) reported experiencing at least one form of hardship and two-thirds (64.2 percent) reported experiencing food insecurity.

The WBNS also indicates that most families with children—nearly 9 out of 10—include at least one adult who works, and nearly three-quarters of adults in low-income families with children reported having at least one working adult in the household. Among those who were not in the labor force, most were not looking for work because of family responsibilities, including child care, or because of a health problem or disability.

HOW WE DID IT

This brief draws on data from a nationally representative sample of 7,821 adults ages 18 to 64 who participated in the December 2023 round of the WBNS, an internet-based survey designed to monitor changes in individual and family well-being as policymakers consider changes to federal safety net programs. Our analysis focuses on the 2,831 adults in the sample who reported living with one or more children younger than 18.