Differentials in children's insurance coverage by key socioeconomic characteristics are as sizable as those we have reported for demographic characteristics. Here we examine differentials by family poverty level, parents' employment, and parents' education as observed in September 1994. We begin by describing our measurement of the three characteristics and showing how children under 19 are distributed by each of the three. Following this we present distributions of insurance coverage by levels of each of these characteristics and then report the percentage distribution of children by poverty level, parents' employment, and parents' education within each category of insurance coverage.
a. Distribution of the Population
To calculate the family poverty level for each child, we used the September 1994 family income and family size, as constructed by the Census Bureau, and compared the family income to 1/12 the annual poverty threshold for a family of the size reported in that month.4 By this measure, 9 percent of children under 19 were in families below 50 percent of the poverty line, and nearly 12 percent were in families between 50 and 100 percent of poverty, yielding a total poverty rate close to 21 percent (see Table 5).5 A slightly larger percentage of children were in families between 100 and 200 percent of poverty while a slightly smaller fraction were in families between 200 percent and 300 percent of poverty. Just over one-third or 35 percent of children were in families above 300 percent of poverty.
We measured parents' employment by first determining whether each parent present in the child's household in September 1994 was employed full time, part time, or not at all in that month, and then we classified children as having one or both parents employed full time, neither parent employed full time but one or both parents employed part time, and neither parent working. Children with no parent identified as present in the household were classified separately. By this measure, 78 percent of children had one or both parents employed full time, 5 percent had parents employed only part time, 14 percent had no parents working, and 2 percent had no parents present in the household.
To classify children by their parents' education, we assigned each parent present in the child's household in September 1994 to one of six educational levels, based on years of schooling completed and whether the parent obtained a college degree. We then classified each child by the higher of either parent's level of education when both were present or by the one parent's level of education when only one was present. Children with no parent present were assigned to a separate category. Only 2 percent of children had parents with six or fewer years of schooling, and 10 percent had parents with at most 7 to 11 years of schooling. The largest group of children, at 33 percent, had at least one parent with exactly 12 years of schooling (and the other, if present, with 12 years or less). The remaining 52.5 percent of children had parents who attended college but did not graduate (24 percent), completed a four-year degree (15 percent), or went on to graduate school (about 14 percent).
b. Distribution of Insurance Coverage
Table 6 provides estimates of differential insurance coverage by family poverty level, parents' employment, and parents' education.
As we would expect, both employer-sponsored coverage and Medicaid are strongly related to the child's poverty level, but in opposite directions. Only 11 percent of children in families below 50 percent of poverty and 21 percent of those between 50 and 100 percent of poverty have employer-sponsored coverage. More than half of those in families between 100 and 200 percent of poverty have such coverage, and this proportion rises to 90 percent among children in families above 300 percent of poverty. For Medicaid we find that 70 percent of children below 50 percent of poverty and 53 percent of those between 50 and 100 percent of poverty are reported to be covered. Medicaid coverage declines to 20 percent among those between 100 and 200 percent of poverty then plunges to 5 percent for those between 200 and 300 percent of poverty and drops further to below 2 percent among children at 300 percent of poverty or higher.
Other insurance shows little relationship to poverty level. Children in families below poverty are somewhat less likely to have other insurance coverage, but there is no variation among children above poverty. Uninsurance is inversely related to poverty level but not linearly: children below 50 percent of poverty have a lower rate of uninsurance than children between 50 percent and 200 percent of poverty. Clearly, the Medicaid coverage that is available to children below 50 percent of poverty explains this group's comparatively low rate of uninsurance.
Parents' employment has a very strong relationship with the child's insurance status as well. Children with at least one parent working full time have the highest rate of employer-sponsored coverage at 77 percent, the lowest rate of Medicaid coverage at 7.3 percent, and the lowest rate of uninsurance at 11 percent. Employer-sponsored coverage plunges to 9 percent, and Medicaid coverage rises to 73 percent when there is no working parent in the household. Uninsurance rises as well but to a level between that of children with parents employed full time versus part time. Children with no parent present have rates of both employer-sponsored coverage and Medicaid coverage that are between those of children whose parents work part time and children whose parents do not work at all, but they have the highest rate of uninsurance, at 23 percent.
Parents' education is highly related to the incidence of every one of the four coverage groups. Employer-sponsored coverage increases from 11 percent to 86 percent from the lowest education level (six years or less) to the highest (some graduate work). Medicaid coverage declines from 46 percent to 3 percent between the lowest and highest levels of education although children with parents educated only 7 to 11 years have a higher Medicaid participation rate (53 percent) than those with less educated parents. Other insurance coverage grows from 0 percent to 7 percent between the lowest and highest levels of education while the rate of uninsurance declines from 43 percent to 4 percent. For each of these four coverage groups this is by far the broadest range of rates seen for any of the demographic or socioeconomic variables. Given the nonlinear relationship between family poverty level and a child's lack of insurance, we speculate that the strength of the relationship between parents' education and their children's lack of insurance may reflect more than just differential access to health insurance. Certainly this merits further investigation, including the examination of education differentials in a multivariate context, but if the relationship holds up there are clear policy implications for efforts to increase enrollment in Medicaid and the new state Children's Health Insurance Program (CHIP) initiatives.
c. Distribution of Socioeconomic Characteristics within Coverage Groups
Table 7, which is analogous to Table 4, gives the percentage distribution of children by poverty level, parents' employment, and parents' education within each class of insurance coverage.
Children in families between 100 and 200 percent of poverty account for 39 percent of the uninsured. The size of this portion of the uninsured is important because it includes the children addressed most explicitly by the CHIP legislation. Older children between 50 and 100 percent of poverty also constitute a prime target of CHIP. Across all ages this group accounts for 21 percent of the uninsured. Somewhat surprisingly, however, uninsured children in families above 300 percent of poverty, at 10 to 11 percent of all uninsured children, are nearly as numerous as uninsured children in families below 50 percent of poverty, who account for 12 percent of the total.
It is particularly clear from Table 7 how Medicaid complements employer-sponsored and other insurance coverage. Children below 100 percent of poverty account for only 5.3 percent of all children with employer-sponsored coverage and 13 percent of those with other coverage, but they account for 67 percent of the children covered by Medicaid. Children between 100 and 200 percent of poverty account for relatively similar shares of all children covered by employer-sponsored plans, Medicaid, or other insurance. Children above 200 percent of poverty represent 75 percent of the children covered by employer-sponsored plans and 58 percent of the children covered by other insurance but only 9 percent of the children covered by Medicaid.
With respect to parents' employment what stands out is the 69 percent of uninsured children who have at least one parent employed full-time. At the same time, children with parents working part-time account for only 19 percent of the uninsured. Children with no working parents account for 18 percent of the uninsured but 54 percent of those enrolled in Medicaid.
Children whose more educated parent had exactly 12 years of schooling constitute one-third of all children under 19, but they represent 42 percent of children enrolled in Medicaid and 42 percent of the uninsured. Interestingly, the uninsured are distributed almost identically below and above this modal educational level whereas Medicaid enrollees come disproportionately from children whose parents had less than 12 years of education. This latter group contributes only 4 percent of children with employer-sponsored coverage and 1 percent of those with other coverage