Economic Policies Can Protect Against Child Welfare Involvement. How NYC Is Doing, Explained.

By Mahima Golani

Economic policies that soften the impact of economic setbacks and reduce hardships can reduce child maltreatment and child welfare involvement, according to a growing body of research. This brief applies this research to economic conditions in NYC, examining families’ exposure to conditions that can contribute to investigations and family separation. 

Parents and youth impacted by the child welfare system have called for direct investment in families and communities. The goal of this explainer is to help advocates, policymakers, journalists and elected officials envision how city and state economic policies might better protect against child welfare involvement.

Economic Policies Can Protect Families from Hardship and Reduce Child Welfare Involvement

Research published in 2020 found that these conditions most reliably predict child welfare involvement:

• Income Loss – job loss or loss of public benefits;
• Housing Hardship – doubling up with relatives, entering shelter, or becoming homeless;
• Cumulative Material Hardship – bills piling up and being unable to make ends meet over time.

In addition, these common challenges have been found to be the biggest predictors of “indicated” neglect reports:

• Food pantry use;
• Difficulty paying rent;
• Cutting meals;
• Public benefit receipt;
• Utility shutoffs;
• Moving frequently;
• Inability to access medical care for a sick family member.

In short, families are much more likely to come into contact with child welfare when they are struggling to meet their basic needs. Though New York state law is clear that financial inability to provide is not neglect, in practice, reports often align closely with the consequences of living in poverty. 

Research shows that policies that concretely target family economic setbacks and experiences of hardship can reduce interactions with the child welfare system. Each additional $1,000 that states spend annually on public benefit programs per person living in poverty is associated with a reduction of 4.3% in hotline calls, 4% in substantiated maltreatment, 2.1% in removals, 7.7% in child fatalities, although these reductions may not be equitably distributed.

A large body of research also shows that bolstering economic security through direct cash transfers or a strong safety net has positive impacts on child and parent mental health; child well-being, behavior and educational attainment; and maternal health, psychological distress and substance abuse. 

NYC has made a number of improvements in economic policies for families in recent years that should have brought down child welfare involvement: 

• Raised the minimum wage (to $16/hour today and $17/hour in 2026);
• Instituted paid family leave and sick leave for all workers;
• Established access to free 3-K and pre-K, and expanded access to free childcare^[1] for low-income families;
• Expanded many safety net programs to immigrants;
• Expanded housing vouchers;
• Expanded the child tax credit, particularly to include children under 4;
• Allowed families receiving public assistance to save more and still receive support.

However, while foster care entries and court-ordered supervision of families have fallen considerably, child welfare investigations remain as high as they were in the 1990s.

1 in 4 New Yorkers Live in Poverty

With about 1 in 4 of New Yorkers living in poverty in 2022, the city faces a deep layer of economic hardship. Black (23%), Latino (26%), and Asian (24%) New Yorkers living in NYC were twice as likely to live in poverty compared to white (13%) New Yorkers.

Calls to the state family assistance line reflect the very basic needs that often result in hotline calls and investigations: housing and financial assistance were top needs in 2023, and callers also sought help with child care, food assistance, pack ‘n’ plays, car seats and other baby items.^[2] Recent NYC Family Policy Project interviews with parents, provider agencies and ACS also document that basic needs challenges are extremely common for families that come to the attention of the system.^[3] 

Income Poverty Alone Does Not Explain Extremely High Investigation Rates for NYC’s Black And Latino Families 

Poverty is highly correlated with hotline calls and investigations in NYC.^[5] However, poverty is not the only factor in persistent racial disparities in child welfare involvement. If it was, investigation and foster care rates by race and ethnicity would mirror citywide averages for child poverty, but they don’t.

Child poverty rates in 2019 suggest that Black and Latino children would experience investigations and removals at approximately twice the rate of white and Asian children. In reality, Black children were 6 times more likely to experience an investigation than white children and 10 times more likely to be separated from their families. Latino children were 5 times more likely to experience an investigation than white children and 5 times more likely to be separated from their families than white and Asian children.

Half of NYC Households Struggle to Make Ends Meet

Official poverty measures hide the depth of hardship in NYC. The most recent True Cost of Living report showed that half of New Yorkers did not have enough income to cover basic costs of living in 2021. The True Cost of Living (TCL) reflects a ‘bare-bones’ budget designed to understand how much it costs to meet basic needs, including:

Families struggling to meet these needs can experience cumulative material hardship. This list of basic needs also closely overlaps with the common challenges found to be the biggest predictors of child welfare involvement.

In 2019, 36% of families could not meet their basic needs. In 2021, that number increased to 50% as pandemic supports faded. 

For families with children, the percentage of households living below the true cost of living rose to 63% in 2021.

For these families led by single mothers, 80% were struggling to cover the costs of basic needs.

For single mothers with young children (under 5), this rose further to 86%.

The percentage of families with incomes below the true cost of living was particularly high for single mothers of color with children under five: 89% of Latina mothers and 92% of Black mothers, compared to 65% of white mothers. 

This is especially significant because younger children are much more likely to enter foster care than older children. In NYC, children under 5 made up only 28% of children in an investigation but 43% of children entering foster care in 2019. 

Neighborhood Conditions Can Contribute to Child Welfare Exposure

Research shows that everyday surroundings can offer significant advantages to children even if their own family is struggling. Yet decades of redlining and racist disinvestment have resulted in vastly inequitable neighborhood conditions, and the six Bronx neighborhoods with the highest percentage of redlined residential land are those with the highest number of investigations and removals today. Almost a third of all hotline callers reported Bronx families in 2019, even though they made up only 21% of families in NYC.

Low-income Black and Latino New Yorkers are much more likely to live in higher poverty neighborhoods than poor white and Asian New Yorkers, and hotline call rates are four times higher in the highest poverty neighborhoods compared with the lowest. The 25 zip codes with the highest child poverty rates experienced twice the rate of hotline calls compared to every other zip code.

NYC’s Black and Latino Families Are More Likely to Experience the Economic Setbacks and Hardships Associated with Child Welfare Involvement

Unstable Work and Unemployment Disproportionately Affect Workers of Color

Families of color face additional obstacles when finding or keeping work due to racism in the job market.^[6] In 2023, the gap between Black and white unemployment in NYC was the widest it has been in the last 100 years. (Black unemployment is now 7.9%, compared to 4.9% citywide.) More than half of Black New Yorkers (57%) report experiencing discrimination when applying for jobs and promotions.

Nationally, in good economic circumstances, Black women work as much as white women. When the economy slows down, however, Black women lose more hours of work. In 2016, Black women (45%) were almost twice as likely to be involuntarily out of work than white women (28%) due to illness, disability, or inability to find work. 

Families in poverty also are much more likely to work jobs with unpredictable schedules, unstable employment, and limited to nonexistent benefits. 

Limited Savings—and Lack of Access to Emergency Cash—Increases Family Vulnerability

Savings can cushion families from the impact of economic setbacks, but in New York state, 26 out of every 100 families didn’t have enough cash in 2021 to cover their basic needs for three months if they stopped earning money. For Black families in the state, this number was almost double, with half of all families not having enough for their minimum safety net. For Latino families, this was higher still at 56 out of every 100 families.

Even modest savings are protective. A national study found that families with a savings cushion of as little as $250 to $750 are less likely to be evicted, miss a housing or utility payment, or receive public benefits after a job loss, health issue, or large income drop—all of which predict child welfare involvement.^[7]

Yet 14% of all households and 32% of Black households in New York had zero or negative savings in 2021. This means that what these households owned (in property, vehicles, or savings) was worth less than their debts (like mortgage or back rent, student loans, or credit cards). This reflects the significant racial wealth gap in NYC, resulting from decades of discrimination, especially in access to home ownership. 

Shelter Involvement Exposes Families to Child Welfare

About half of Hispanic, Black, and Asian households in the state experience housing insecurity, compared to a third of white households, making them more likely to ‘double up’ with relatives, enter shelters, or experience homelessness, all of which heighten the risk of child welfare involvement. Prior to the migrant influx, 54% of “heads of households” of families in shelter were Black and 40% were Latino. Typically, a quarter of families in shelters have been ACS-involved.

Single Parents in NYC Are More Exposed to the Hardships that Predict Child Welfare Involvement

Over half of NYC single parent led families experience severe material hardships, like running out of food, having the lights shut off, or not being able to see a doctor, compared to one-third of all households.

Single parents are more likely to live in a neighborhood with high poverty rates and to spend more than half of their income on housing, and less likely to be able to call on their support network for an emergency loan during a crisis. 

Research shows that policy decisions in the United States work to penalize single motherhood. Compared to high-income countries with similar rates of single motherhood, single mothers in the U.S. are far more likely to be poor. This is especially true for Black and Latina mothers. 

This means that the struggles that come with single motherhood are intensified by policy decisions that place a penalty on single motherhood.

Even if Enrolled in Every Safety Net Program, Families Would Not Meet the Cost of Living in NYC

If all eligible New York state adults and children were enrolled in all seven safety net programs, poverty statewide would drop by almost 40%. It would cut child poverty in half. 

This would have the largest effect for Black (41%) and Latino (44%) New Yorkers, though it would also significantly reduce poverty among Asian and Pacific Islander (34%) and white (29%) residents.

Yet, more than 2 million New Yorkers would still be living in poverty. NY’s current safety net, even at its full potential, would not hold all families that are currently struggling to make ends meet.

Family Economic Supports During the Pandemic That Appeared to Buffer Families From Child Welfare Involvement Have Disappeared

Even as families faced tremendous stress during the pandemic, all forms of child welfare intervention dropped precipitously—that includes investigations, preventive services, court supervision and removals to foster care. Yet there is no indication that NYC children were less safe in the absence of scrutiny.

Even as the pandemic brought unprecedented social and economic challenges, they were met with significant federal and local relief measures.^[8] Major economic relief came through government unemployment benefits, the federal stimulus and the child tax credit; NYC banned evictions and relaxed application requirements and restrictions on cash assistance and food stamps; and philanthropy and mutual aid offered immediate and convenient access to cash, food and necessities. 

These policies had profound effects on helping households meet their basic needs, cutting the adult poverty rate by 45% and the child poverty rate by 68% in 2021. They also supported many families in protecting against future setbacks, such as by paying off credit card debt and saving for emergencies. However, federal tax credits and other economic investments in families were allowed to expire, and poverty rates for NYC families have surpassed pre-pandemic levels. 

Reinvestment in Family Economic Supports Could Reduce Investigations and Family Separation

Foster care entries in NYC have largely been on a downward trend over the past two decades, and the pandemic’s high economic supports for families, combined with reduced surveillance, appear to have helped family separations hit a 25-year low. 

With a deeply uneven economic recovery and weakened safety net, foster care entries have begun to tick up. Investigations have largely returned to pre-pandemic levels. If pandemic-era supports had not been stripped away, that downward trend may have continued, with even fewer families separated today because of hardships rooted in poverty.

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