WACO, Texas, – As horrific and unimaginable as it sounds, child maltreatment is pervasive in the United States and ranks as one of the nation’s most pressing public health and social concerns.
While many incidents no doubt go unreported, reliable survey evidence suggests that more than 13 percent of U.S. children are subject to abuse or neglect by a caregiver each year. It impacts children irrespective of age, gender, ethnicity, or socioeconomic status. The physical and emotional consequences to the victims often persist throughout their lives and represent a truly incalculable and often irreparable harm.
This fact alone should be sufficient justification for a massive national effort to both address the underlying causes and minimize the impacts on the victims. In reality, however, budget constraints and changing priorities have led to reduced funding to the agencies confronting the issue and fewer public resources for prevention, investigation, and amelioration.
In addition to the very real effects on the individuals involved, child maltreatment also imposes substantial economic costs which can be quantified in a comprehensive manner. When properly measured, every year that the situation is allowed to persist at current levels drains literally trillions of dollars in long-term business activity. Viewed from this perspective, there is a compelling case for the investment of public, private, and philanthropic resources into a multi-faceted attack on child maltreatment for pecuniary reasons that go beyond the obvious affront to human dignity and opportunity.
The Perryman Group recently completed a study in order to provide a perspective on the economic costs of child maltreatment. The full report (provided as a public service) is available for free download on our website (www.perrymangroup.com).
Extensive prior research has quantified the direct social costs (health care, social welfare, juvenile and adult crime, and education costs) stemming from child maltreatment. We compiled and analyzed these reports, updating and refining the estimates and expanding them to reflect the full costs as the various direct effects work their way through the economy. Our study thus integrates findings from prior studies with a dynamic impact modeling process in order to more fully capture the overall social costs as they ripple through the economy.
As an initial phase of this analysis, we first updated and refined available 2012 data regarding the numbers of cases reported to various child protective services agencies to 2014 based on recent trends and child population estimates. The results indicate that more than 3.3 million children age 17 or younger were maltreated for the first time in 2014. A second, survey-based approach produced virtually identical results.
Note that this figure reflects only first-time victims (as appropriate for an “incidence” approach such as we performed); the actual number of children affected by abuse is much higher. An incidence approach measures the economic consequences of child maltreatment in a given year (2014) as they are manifested over the life cycle of the affected individuals. It is an approach commonly used in health-related studies and is appropriate for policy evaluation.
Following the general pattern in other major studies of the topic, the direct social costs identified for the non-fatal victims included incremental expenses for health care (childhood and adult), social welfare services, criminal justice (juvenile and adult), and education. For fatal cases, health costs were also considered. In addition, productivity and lifetime earnings are affected. These costs total hundreds of thousands of dollars per victim. In addition, these effects also lead to a reduction in earnings as work ability, productivity, and education levels are negatively affected. This loss, in turn, has ripple effects throughout the economy.
The Perryman Group estimates that each individual occurrence of first-time child maltreatment costs the U.S. economy about $1.8 million in total expenditures, $800,000 in gross product and $500,000 in personal income. These amounts reflect the lifetime economic losses stemming from incidences of child maltreatment occurring in 2014. The values are given in constant (2014) dollars and are discounted at a three percent real (inflation-adjusted) rate. They are also fully adjusted for (1) the likelihood of substitution among workers (which reduces the amount reflected in individual losses), (2) the production losses associated with a reduced supply of labor, and (3) the spinoff effects on suppliers and consumer spending of the reduced productive capacity. The assumptions, prior studies, and methods we used are spelled out in the full report.
When the millions of individual cases are considered, the overall economic cost of first-time child maltreatment in the United States can be measured. We found that the total economic cost of child maltreatment occurring in 2014 includes almost $5.9 trillion in lifetime spending, $2.7 trillion in lost gross domestic product, and 27.9 million person-years of employment. Economic costs of child maltreatment are naturally highest in the most populous states, with job losses (person-years over the lifetime of the first-time victims in 2014) stemming from child maltreatment ranging from 26,700 in Hawaii to almost 3.5 million in California.
There is not an easy solution to the problem of child maltreatment, but the economic losses clearly support additional investment aimed at dealing with the underlying causes. The horrific physical and mental costs to children are reason enough, but there is also compelling economic justification.
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.
