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In 1998, more than 13 million children (19 percent of all children) under age eighteen lived in families with incomes below the official poverty threshold. Although children age eighteen and under represent 26 percent of the United States population, they comprise nearly 40 percent of the poverty population. Despite a steady decrease from 1993 (23%) to 1999 (17%) in the rate of children in poverty, the United States still ranks highest in childhood poverty among all industrialized nations.

In the United States, income poverty is defined by the poverty threshold, developed in 1959 and based on expected food expenditures (thrifty food basket) for families of varying sizes. Each year the threshold is adjusted for the Consumer
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Moreover, longitudinal designs allow for an assessment of how the timing (early vs. late) and duration (transient vs. persistent) of poverty may differentially affect children's outcomes. When possible, this discussion presents finding from studies that used standardized tests of school readiness, achievement, and cognitive ability, and controlled for key family and child characteristics, in its review of the impact of poverty on children's educational outcomes.

Early childhood. During the 1990s, the nation was inundated with reports on the importance of the early years on children's brain development and later cognitive achievement. While some of the reports may have overstated the issue and understated the importance of a child's later years on development, evidence suggests that the early years may be a critical period of development in which family poverty has particularly strong effects on young children. As seen in Table 1, poverty occurring early in a child's life (age two to four) is associated with large effects on indices of child school readiness and cognitive outcomes.

Judith Smith and colleagues (1997), using data from two national datasets, showed that family poverty was significantly associated with lower scores on several measures of child cognitive and school readiness outcomes for children age three to four years, even after controlling for the effect of mother's education,
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