Abstract

Low- and moderate-income (LMI) households with children often face considerable difficulties in ensuring enough financial resources for an adequate diet. This project investigates the use of financial services and other financial decisions parents make that may affect the risk of very low food security and food insecurity of children. With households in both the December 2008 Current Population Survey (CPS) Food Security Supplement and the January 2009 CPS Unbanked and Underbanked Supplement, the project studies the relationship between bank account ownership, use of alternative financial service (AFS) providers, the organization of household finances, and the food security of children. Both children in unbanked households and those in households that use AFS products are more likely to experience very low food security and food insecurity than other households. Children in previously banked households face extremely high risk of food insecurity. Children in households that use AFS products that provide credit are more likely to experience very low food security than households using AFS product for basic financial transaction services. Large associations exist between the use of AFS products providing credit and child food insecurity but only pawn borrowing appears to have a causal effect. Couples that share at least some finances and jointly participate in financial decisions reduce the risk of child food insecurity. Evidence suggests that improved financial literacy and management skills could improve outcomes. Policies to eliminate childhood hunger should include a multifaceted approach that includes financial education, appropriate bank accounts, and access to low-cost credit.

Document Type

Research Paper

Publication Date

8-30-2013

Discussion Paper Number

DP 2013-07

Notes/Citation Information

Final Report Prepared for UKCPR Research Program on Childhood Hunger.

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