Children who grew up in poverty were twice as likely to struggle with financial challenges later in life, said Federal Reserve Chair Janet Yellen in a meeting last week.
Yellen was referring to the results of a survey, to be released this spring, that reveals more than half of young people age 25 to 39 who reported that as children they worried over things like having enough food were currently facing financial challenges.
“Young adults who regularly or sometimes worried when they were children about their care, safety, or having enough to eat are also less likely to be employed, less likely to have consistent income month-to-month, and less likely to be able to pay all of their current monthly bills in full, compared with those who never or rarely worried about these concerns as children,” added Yellen.
The Fed chair says that the research makes a compelling case that there is a need to also think longer term about how to prepare people for success in the labor market:
In fact, this research underscores the value of starting young to develop basic work habits and skills, like literacy, numeracy, and interpersonal and organizational skills. These habits and skills help prepare people for work, help them enter the labor market sooner, meet with more success over time, and be in a position to develop the more specialized skills and obtain the academic credentials that are strongly correlated with higher and steadier earnings. Indeed, a growing body of economic and education literature has focused on the relative efficiency of addressing workforce development challenges through investments in early childhood development and education compared with interventions later in life.