Local Labor Markets and Child Poverty

This study uses modeled Small Area Estimates data to analyze the labor market influences on child poverty rates in local areas. These data support analysis of small geographic areas as well as at different points of the business cycle. Statistical tests appropriate for data with geographic and intertemporal correlations are adapted for use with modeled data. The results reveal that child poverty rates in local areas vary with the diversity of the local economy, specifically with dependence on a particular industry and with the diversity of firm size. These influences have varying impact at different points of the business cycle.