Consumption

  • Luigi Pistaferri

Leader: Luigi Pistaferri

The study of poverty and inequality has long privileged measures of income over those of consumption. Does this lead us awry? The purpose of the Consumption RG, which the CPI has founded only recently, is to monitor trends in consumption-based poverty and inequality and to understand the sources of those trends. The analyses within this RG will focus on the individual components of consumption because they are not always moving in lockstep. For example, inequality in the ownership of major durables has been declining, whereas inequality in nondurables, services, and food consumption has been increasing. The trends in food consumption are further complicated, however, because coloric intake is not growing more unequal, partly as a result of assistance provided by SNAP. The main rationale for setting up this RG is that patterns of consumption, especially among the poor, appear to be changing in complicated ways that require careful study and documenting. Although in principle the well-being of households may be better assessed with consumption than income, a consumption-based approach is thus complicated by the very different trends across the components of consumption and by difficulties in knowing the value assigned to the quality of goods that are consumed.

  • Elizabeth Peters
  • Sara McLanahan

Leaders: Elizabeth Peters, Sara McLanahan

The continuing decline in prime-age employment interacts with ongoing changes in the structure and composition of low-income families. The relevant trends here include (a) declining marriage rates and increasing cohabitation, (b) increases in nonmarital births and multi-partner fertility, and (c) rising noncustodial parenthood (especially for fathers). These developments all work to weaken the “family safety net” for poor children. In a precarious labor market, a second parent provides backup in difficult times (e.g., extra income, childcare), thus reducing the risks of poverty. The family safety net is in this sense weakening just as the labor market is becoming more precarious. Moreover, because some programs (e.g., EITC) provide higher benefits for custodial parents, the rise of noncustodial parenting undermines the capacity of the formal safety net to step in as the family safety net weakens. These and related changes in family structure have prompted a spate of policy proposals, some involving safety net reforms that accommodate the new family forms (e.g., incentivizing noncustodial parents to comply with child-support orders), and others addressing the underlying institutional changes themselves (e.g., increasing the availability of long-acting reversible contraceptives). The charge of the Family RG is to evaluate these proposals and to better understand how the safety net is adapting to changes in family structure. The following projects are a sampling of the research underway within this RG.

A new round of Fragile Families data collection: Under the leadership of Sara McLanahan, a new initiative to update the Fragile Families Study is underway, with a focus on adding administrative records, metabolic and immune markers, and measures of methylation.

Income and the developing brain: Does income support for families affect the brain function and development of infants? A new experiment will reveal all.

Measuring family complexity in the AOS: Will the American Opportunity Study (AOS) capture the rise of ever more complicated family forms? By linking tax, census, and birth records, the AOS should be up to the task.

  • Sanjay Basu
  • Mark Cullen
  • Jeremy Freese
  • David Rehkopf

Leaders: Sanjay Basu, Mark Cullen, Jeremy Freese, David Rehkopf 

The affiliates within the Health Disparities RG are using new computer modeling and statistical techniques to examine how poverty affects the health of children and adults and how some anti-poverty programs are reducing those effects. Here’s a sampling of our projects. 

Income, geography, and life expectancy: Using deidentified tax data and Social Security Administration death records, Raj Chetty and his coauthors have shown that the richest 1 percent live 14.6 years longer, on average, than the poorest 1 percent. Although poor people typically have much shorter lives, Chetty also shows that the extent of this disadvantage depends on the place of residence, thus suggesting that there may be opportunities for policy to reduce the gap in life expectancy.

Infant health and poverty: Which poor neighborhoods are associated with very low birth weights? By identifying neighborhoods that are yielding very low birth weights, we can start to target home visiting and related programs.

Biological mechanisms of disadvantage: We all know that poverty “gets under the skin” and creates lasting disadvantage. Is this because children exposed to poverty-induced stress experience epigenetic changes? We’re going to know very soon.

Income and the developing brain: The prevailing view is that poverty is especially likely to shape children’s early development because of the high plasticity and rapid growth of the brain during the first three years of life. It’s high time for a rigorous study of how income affects the brain function and development of infants and toddlers. 

  • Matthew Desmond
  • Rebecca Diamond

Leaders: Matthew Desmond, Rebecca Diamond

The Housing RG is tasked with exploring the the inner workings of disadvantaged neighborhoods and the low-cost housing market, with a focus on (a) the relationship between housing, employment, and poverty, (b) the causes, dynamics, and consequences of eviction, and (c) the effectiveness of housing vouchers and other housing programs. A sampling of our ongoing projects follows.

Evictions and poverty: Are evictions an important cause of deep and extreme poverty? In collaboration with Raj Chetty, Matt Desmond is starting a project on the long-term consequences of eviction that will reveal the extent to which deep and extreme poverty can be reduced with a “housing first” policy that ramps up federal housing programs.

Housing voucher policy: The U.S. currently spends approximately $20 billion per year on subsidized housing vouchers, but 80 percent of these vouchers are used in moderate- or high-poverty neighborhoods, where opportunities for upward mobility are typically limited. Can voucher policies be recast to increase the number of families moving to “high opportunity” neighborhoods?

  • David Harding
  • Stephen Raphael
  • Joan Petersilia

Leaders: David Harding, Stephen Raphael, Joan Petersilia

Since the mid-1970s, the United States has experienced a precipitous rise in incarceration, with about 2.3 million U.S. adults now incarcerated in state and federal prisons. In recent years, there has been increasing pressure to wind down this commitment to mass imprisonment, and it’s accordingly important to study ways to reintegrate successfully. The Incarceration RG is tasked with monitoring and evaluating the relationship between poverty and sentencing, parole reform, probation, reintegration, and recidivism.

Poverty and the decline in prison population: Will the ongoing decline in California’s prison population bring about an increase in homelessness, mental health service use, and other poverty-relevant outcomes? This line of research will reveal whether ongoing declines in incarceration should be coordinated with increased funding for programs that may substitute for incarceration.

Arrests, race, and poverty: Is reducing arrests the only way to reduce criminal bookings (and the employment-reducing effects of such bookings)? There may be another way.

  • Greg Duncan
  • Arnold Milstein
  • Sean Reardon
  • Gregory Walton

Leaders: Greg Duncan, Arnold Milstein, Sean Reardon, Gregory Walton

The Life Course RG is dedicated to advancing research on life course theory and assessing how it can contribute to reducing poverty. The research within this RG focuses on issues of toxic stress, neurodevelopment, and epigenetics. The following are a few relevant projects within this RG.

Optimal timing of interventions: It has long been argued that interventions in the earliest years of childhood have larger long-term returns that interventions in later years. Is a comprehensive test of this hypothesis now possible?

Biological mechanisms of disadvantage: We’ve all heard that poverty “gets under the skin.” There is growing debate, however, on whether this biologic embedding of poverty takes an epigenetic form. A study underway at the CPI will be an especially important entry into this debate. 

Infant health and poverty: It is well known that early disadvantages at the “starting gate” parlay into later developmental disadvantages and increased risks of poverty. Are these starting-gate disparities growing larger? Using the census of U.S. birth records between 1970 and 2014, we will soon know whether they are.

Differential EITC effects: Is there a critical moment in the child’s cognitive development in which an EITC supplement is especially consequential? This question, which has long been difficult to answer, can now be taken on by linking vital statistics to administrative data for school children.

  • Kathryn Edin
  • Linda Burton
  • David Grusky

Leaders: Linda Burton, Kathryn Edin, David Grusky

The Supplemental Poverty Measure (SPM) reveals substantial post-1970 reductions in poverty under a constant (i.e., “anchored”) threshold, but this trend masks worrisome developments at the very bottom of the distribution. Although the overall SPM has trended downward since 1970, the SPM for households with less than half of the anchored threshold level (i.e., “deep poverty”) has remained stable since 1968. Even more worrying, the most extreme forms of poverty, such as living on less than $2 per day (per person), have in fact increased over the last two decades. The main tasks of our Poverty and Deep Poverty RG are to describe trends in poverty and deep poverty, to assess the effectiveness of current anti-poverty programs, and to examine the likely payoff to introducing new anti-poverty programs. We present a sampling of relevant projects below.

Frequent Reporting Project: Why are unemployment statistics reported monthly whereas poverty statistics are reported only once a year (and with such a long lag)? The CPI is hard at work solving this problem.

California Poverty Project: The CPI, in collaboration with the Public Policy Institute of California, issues the California Poverty Measure (CPM) annually. There are plans afoot to make it an even more powerful policy instrument. 

Ending Poverty in California: Is it possible to substantially reduce poverty in California by relying entirely on evidence-based programs? It indeed is.

The National Poverty StudyThe country’s one-size-fits-all poverty policy ignores the seemingly profound differences between suburban poverty, immigrant poverty, reservation poverty, rural white poverty, deindustrializing poverty, and the many other ways in which massive deprivation plays out in the U.S. The National Poverty Study, which will be the country’s first qualitative census of poverty, takes on the problem.

Income supports and deep poverty: The U.S. does not rely heavily on unconditional cash transfers in its poverty programming. Is this a mistake? The CPI is assisting Y Combinator in providing the first U.S. evidence on unconditional income support since the negative income tax experiments of the 1970s.

Disability and deep poverty: The country’s disability programs are an important anti-poverty weapon. In evaluating their effectiveness, it is important to determine whether the low employment rates among program recipients reflects an underlying (low) capacity for employment, as opposed to the labor-supply effects of the programs themselves. Although it’s long been difficult to assess such labor-supply effects, now there’s a way forward.

Evictions and deep and extreme poverty: Are evictions an important cause of deep and extreme poverty? This line of research examines the extent to which deep and extreme poverty can be reduced with a “housing first” policy that ramps up federal housing programs.

Deep poverty and TANF add-ons: The country is implicitly running hundreds of experiments on how best to structure TANF programs, but it hasn’t had the capacity to evaluate them. Are administrative data the answer?

  • Gary Solon
  • Raj Chetty
  • Florencia Torche

Leaders: Raj Chetty, Gary Solon, Florencia Torche

The purpose of the Social Mobility RG is to develop and exploit new administrative sources for measuring mobility and the effects of policy on mobility out of poverty. This research group is doing so by (a) providing comprehensive analyses of intergenerational mobility based on linked administrative data from U.S. tax returns, W-2s, and other sources, and (b) developing a new infrastructure for monitoring social mobility, dubbed the American Opportunity Study, that is based on linking census and other administrative data. Here’s a sampling of projects:

Small place estimates: The Equal Opportunity Project, led by Raj Chetty, uses tax return data to monitor opportunities for mobility out of poverty. In one of the new lines of analysis coming out of this project, the first round of results at the level of “commuting zones” are being redone at a more detailed level (e.g., census block level), thus allowing for even better inferences about the effects of place.

The American Opportunity Study: This research group is also collaborating with the Census Bureau to develop a new infrastructure for monitoring mobility that treats linked decennial census data as the spine on which other administrative data are hung.

Colleges and rising income inequality: Where do poor children go to attend college? The “Mobility Report Card” will convey the joint distribution of parent and student incomes for every Title IV institution in the United States.

The “absolute mobility” of the poor: What fraction of poor children grow up to earn more than their parents? Have rates of absolute upward mobility changed over time? This project develops a new method of estimating rates of absolute mobility for the 1940-1984 birth cohorts.

Intergenerational elasticities in the U.S.: There remains some debate about the size of intergenerational elasticities in the U.S. A rarely-used sample of 1987 tax data provides new evidence on U.S. elasticities.

  • Nicholas Bloom
  • Raj Chetty
  • Emmanuel Saez

Leaders: Nicholas Bloom, Raj Chetty, Emmanuel Saez

The CPI is home to some of the country’s most influential analyses of the income and wealth distribution. The purpose of the Income and Wealth RG is to monitor the ongoing takeoff in income inequality, to better understand its sources, and to analyze its implications for labor market performance, educational attainment, mobility, and more. The following is a sampling of the CPI’s research projects within this area.

Trends in income and wealth inequality: What are the key trends in U.S. income and wealth inequality? The U.S. increasingly looks to Emmanuel Saez and his research team for the latest data on U.S. economic inequality.

Distributional National Accounts: In an ambitious infrastructural project, Emmanuel Saez and his team are building a “Distributional National Accounts” based on tax returns, a data set that will eliminate the current gap between (a) national accounts data based on economic aggregates and (b) inequality analysis that uses micro-level tax data to examine the distribution of income but is not consistent with national aggregates. This new data set will in turn make it possible to evaluate the extent to which economic growth, which has long been represented as a preferred poverty-reduction approach, is indeed delivering on that objective.

The rise of between-firm inequality: How much of the rise in earnings inequality can be attributed to increasing between-firm dispersion in the average wages they pay? This question can be addressed by constructing a matched employer-employee data set for the United States using administrative records.

Rent and inequality: It is increasingly fashionable to argue that “rent” accounts for much of the takeoff in income inequality. The Current Population Survey can be used to assess whether this claim is on the mark. 

  • Robert Mare
  • Daniel Lichter

Leader: Daniel Lichter, Robert Mare

The Residential Segregation RG is dedicated to updating the country’s system for measuring residential segregation. This research group has three main research commitments: (a) monitoring segregation at the extremes; (b) charting the spatial distribution of the elderly poor; and (c) developing a new GPS-based infrastructure for measuring segregation. 

Segregation at the extremes: The first line of research addresses the need to better monitor segregation at the extremes, including (a) the possible rise of enclave-style segregation at the very top (the “one percent”) and (b) the yet more troubling possibility of a resurgence of extreme segregation among the very poor. In a related recession brief, Robert Sampson has shown that poor neighborhoods have become yet poorer in the downturn, raising the possibility that hyper-segregation is indeed emerging. 

Segregation of the elderly poor: In the second line of research, research group members are charting the spatial distribution of the elderly poor, given emerging concerns about their ghettoization. This line of research, which is being carried out in collaboration with the Stanford Center on Longevity, begins with a simple descriptive mapping of elderly poor that reveals the extent to which they are indeed isolated and segregated. 

Real-time measures of segregation: The third main initiative is to develop a new infrastructure for monitoring segregation. The conventional approach of carrying out separate and static measurements of residential, school, work, friendship, and marriage segregation can be replaced with a direct behavioral framework that tracks the continuous-time patterning of inter-person contact. By exploiting GPS measurements (increasingly available, even for the poor, via mobile phones), it becomes possible to track poor, middle-class, and rich people as they move through their day and attend school, go to work, carry out their shopping, and visit friends and family. This methodology will produce a real-time measure of how much segregation there is and, in particular, the extent to which the poor are growing increasingly isolated in school, home, work, and leisure. 

  • Michael Hout
  • Gregory Acs
  • David Card
  • Jesse Rothstein

Leaders: Gregory Acs, David Card, Michael Hout, Jesse Rothstein

The labor market was of course hit very heavily by the Great Recession, as evidenced by (a) the slow recovery of the unemployment rate, (b) and the even slower recovery of the long-term unemployment rate and the prime-age employment ratio (defined as the ratio of employed 25-54 year-olds to the population of that same age). This “jobs problem,” which is especially prominent among low-skill workers, has led to a sharp rise in the number of poor households without any working adults. It also underlies, in part, the sharp increase in the number of disability insurance claims and awards, which in turn has further reduced the supply of labor among low-skilled individuals.

If the first type of “jobs problem” is that there still are not enough of them, the second is that the jobs that are available do not always provide the requisite hours, wages, or security that are needed for a sure pathway out of poverty. As a result, low-skill individuals are not just working less but, even when they are working, there is no guarantee that their jobs will lift them and their families out of poverty. The Labor Markets RG is tasked with conducting research on these and related problems and exploiting administrative and other data to assess possible policy responses to them. We list below a few examples of the work being carried out in this group.

Long-run effects of work incentives: As nonworking poverty increases, the U.S. might well want to turn to new types of work incentive programs. Have these programs worked elsewhere?

Minimum wages and poverty: Throughout the west coast, there are a host of minimum wage “experiments” underway, experiments that have the potential to reset the low-wage labor market in quite fundamental ways. How are these experiments playing out?

  • Karen Jusko
  • Mark Duggan
  • Hilary Hoynes

Leaders: Mark Duggan, Hilary Hoynes, Karen Jusko

The Safety Net RG is devoted to monitoring changes in government transfers and anti-poverty programs and assessing whether they are meeting the needs of the poor. The U.S. safety net is undergoing such changes as (a) an ongoing decline in TANF cash benefits, (b) rapid increases in spending on EITC, Medicaid, Disability Insurance, Unemployment Insurance, and SNAP, and (c) a dramatic shift toward spending that favors the “working poor” over the more destitute. The CPI affiliates working within this research group are monitoring these changes, examining their implications for poverty, assessing the effectiveness of key government and nongovernment programs in reducing poverty, and modeling the costs and benefits of possible changes in policy and programs. We’ve provided a sampling here of some of this ongoing research.

Poverty Relief Project: With Kate Weisshaar, Karen Jusko uses the poverty relief ratio to evaluate the effectiveness of anti-poverty programs over time, across states, and across countries. Which state is the least effective in fighting poverty? Has the U.S. become more or less effective over time? These and other questions are answered in our latest State of the Union reports.

Long-run effects of SNAP: Have we underestimated the returns to SNAP by ignoring the long-run effects on children exposed to it in their early childhood? It’s now possible to find out.

California Welfare LaboratoryThe poverty rate in California, when measured with the Supplemental Poverty Measure, is the highest in the country. What can be done to bring that rate down? The mission of the California Welfare Laboratory is to make research on California’s welfare programs accessible to all and thus facilitate an informed discussion of what is working and what needs to be improved.

Differential EITC effects: It is often argued that early interventions have especially high payoffs.  Are the returns to the EITC indeed larger when it goes to parents with young children?

Disability and poverty: Does the federal government’s disability program reduce labor supply? Although it’s long been difficult to identify a causal effect, Mark Duggan has now found a way.

The effects of TANF: The TANF program is very decentralized and thus takes on dramatically different forms. How can we exploit that variability to find out what’s working?

  • Doug Massey
  • David Grusky
  • Tomás Jiménez
  • Beth Mattingly

Leaders: David Grusky, Tomás Jiménez, Doug Massey, Beth Mattingly

This RG was created after the CPI received a sub-award to study Hispanic poverty, inequality, and mobility. The objective is to document key poverty and inequality trends, to begin the task of explaining what underlies them, and to then populate a new website, with the results coming out of this research.

We are taking on five lines of research under the leadership of both young and more distinguished scholars. The “basic trends” group is documenting key developments in Hispanic population distribution, income, education, poverty, employment, and “safety net” use; the “new generations” group is examining whether second and third generation immigrants are successfully incorporating into the labor market; the “social mobility” group is assessing whether Hispanics continue to have ample opportunities to improve their economic situation during their lifetime; the “social policy” group is examining how recent legal and policy changes have affected Hispanic natives and immigrants; and the “health” group is exploring the sources of deteriorating health among Hispanic immigrants and natives. The work of this RG was featured in a Pathways Magazine special report on poverty, inequality, and mobility among Hispanics.

 

  • Sean Reardon

Leader: Sean Reardon

The purpose of the Education RG is to examine trends in the extent to which educational access and achievement are related to poverty and family background. The scholars working within this RG are examining state-level differences in the effects of social origins, uncovering the causes of the recent rise in the socioeconomic achievement gap, uncovering the causes of the yet more recent turnaround in this rise (among kindergarten children), and examining the ways in which high-achieving children from poor backgrounds can be induced to go to college. The following is a sampling of relevant CPI projects.

Reducing the race gap in test scores: How can the black-white gap in achievement test scores be eliminated? The new Stanford Education Data Archive (SEDA) will provide the most systematic evidence to date on the capacity of school-district policies to reduce the gap.

Colleges and rising income inequality: Are colleges delivering upward mobility for those raised in poverty? The new “Mobility Report Card” will provide unusually detailed data on this fundamental question.

Poverty and schooling on reservations: The noted ethnographer Martin Sánchez-Jankowski is examining how education on reservations can be reformed to reduce dropout, poverty, and suicide. 

  • C. Matthew Snipp
  • Tomas Jimenez
  • Linda Burton
  • Hazel Markus
  • Douglas Massey
  • Marybeth Mattingly

Leaders: Linda Burton, Tomás Jiménez, Hazel Markus, Douglas Massey, Marybeth Mattingly, C. Matthew Snipp

The CPI has an extensive research program on race, ethnicity, immigration, and poverty. The National Poverty Study, for example, is designed to rigorously compare differences across rural black, deindustrialized, reservation, and other “racialized” poverty forms. The CPI also runs a comprehensive program on Hispanic poverty that explores such topics as the “chilling effect” of anti-immigrant laws on program use, the reasons why, contrary to much speculation, the Hispanic poverty rate has not taken off, and the causes of the so-called Hispanic Health Paradox (see, for example, our Pathways Magazine special report on poverty, inequality, and mobility among Hispanics). And one of the CPI’s most distinguished affiliates, Jennifer Eberhardt (who is on the CPI directorate), is carrying out a groundbreaking big-data analysis of policing and race. We list below a sampling of other CPI projects on race, ethnicity, immigration, and poverty.

Poverty among refugees: The U.S. refugee population faces very high rates of poverty, yet we know very little about the effects of different resettlement programs and approaches. There are efforts afoot to exploit available administrative data and begin to find out what works and what doesn’t.

Arrests, race, and poverty: Why are some arrests resolved informally while others are converted into a criminal record that then has a life-long scarring effect? The process of converting an arrest into a criminal booking may play an important role in generating downstream racial disparities.

Reducing the race gap in test scores: The new Stanford Education Data Archive (SEDA) is a rich resource that is providing the most systematic evidence to date on the capacity of school-district policies to reduce the racial gap in test scores.

Poverty and schooling on reservations: Why are test scores and educational outcomes on Native reservations so low (relative to the national average)? In a new project by the noted ethnographer Martin Sánchez-Jankowski, we’ll be learning more about how traditional and formal education are viewed and the ways in which they might be better integrated. 

  • Shelley Correll
  • Cecilia Ridgeway
  • David Pedulla

Leaders: Shelley Correll, David Pedulla, Cecilia Ridgeway 

The Poverty and Discrimination RG is charged with developing a regularized protocol for measuring the amount and extent of discrimination in labor and housing markets. It is increasingly clear that labor market discrimination, far from withering away, remains very prominent for many statuses and in many types of markets. However, because this research tradition is based on “one-off” audit studies and laboratory experiments, it is not possible to compare across studies and assess which types of discrimination are the most important or the most resistant to change. There is accordingly a need to build a standardized protocol for monitoring trends in discrimination across the various types of discrimination in play (e.g., poverty status, employment status, homelessness, economic background, race, ethnicity, sexual orientation, incarceration status, citizenship, religion, disability). The twofold objective of this protocol is to make it possible to assess which types of discrimination are especially prominent and which types are growing weaker or stronger over time.

 

All - CPI Research

Title Author Media
Payroll Taxes, Firm Behavior, and Rent Sharing: Evidence from a Young Workers’ Tax Cut in Sweden Emmanuel Saez, Benjamin Schoefer, David Seim

Payroll Taxes, Firm Behavior, and Rent Sharing: Evidence from a Young Workers’ Tax Cut in Sweden

Author: Emmanuel Saez, Benjamin Schoefer, David Seim
Publisher: NBER
Date: 10/2017

This paper uses administrative data to analyze a large and long-lasting employer payroll tax rate cut from 31% down to 15% for young workers (aged 26 or less) in Sweden. We find a zero effect on net-of-tax wages of young treated workers relative to slightly older untreated workers, even in the medium run (after six years). Simple graphical cohort analysis shows compelling positive effects on the employment rate of the treated young workers, of about 2-3 percentage points, which arise primarily from fewer separations (rather than more hiring). These employment effects are larger in places with initially higher youth unemployment rates. We also analyze the firm-level effects of the tax cut. We sort firms by the size of the tax windfall and trace out graphically the time series of firms' outcomes. We proxy a firm's windfall with its share of treated young workers just before the reform. First, heavily treated firms expand after the reform: employment, capital, sales, value added, and profits all increase. These effects appear stronger in credit-constrained firms, consistent with liquidity effects. Second, heavily treated firms increase the wages of all their workers – young as well as old – collectively, perhaps through rent sharing. Wages of low paid workers rise more in percentage terms. Rather than canonical market-level adjustment, we uncover a crucial role of firm-level mechanisms in the transmission of payroll tax cuts.

Who Speaks for the Poor? Karen Jusko

Who Speaks for the Poor?

Author: Karen Jusko
Publisher: Cambridge University Press
Date: 09/2017

Who Speaks for the Poor? explains why parties represent some groups and not others. This book focuses attention on the electoral geography of income, and how it has changed over time, to account for cross-national differences in the political and partisan representation of low-income voters. Jusko develops a general theory of new party formation that shows how changes in the geographic distribution of groups across electoral districts create opportunities for new parties to enter elections, especially where changes favor groups previously excluded from local partisan networks. Empirical evidence is drawn first from a broadly comparative analysis of all new party entry and then from a series of historical case studies, each focusing on the strategic entry incentives of new low-income peoples' parties. Jusko offers a new explanation for the absence of a low-income people's party in the USA and a more general account of political inequality in contemporary democratic societies.

Scraping by: Income and Program Participation After the Loss of Extended Unemployment Benefits Jesse Rothstein, Robert G. Valletta

Scraping by: Income and Program Participation After the Loss of Extended Unemployment Benefits

Author: Jesse Rothstein, Robert G. Valletta
Publisher: Journal of Policy Analysis and Management
Date: 08/2017

Many Unemployment Insurance (UI) recipients do not find new jobs before exhausting their benefits, even when benefits are extended during recessions. Using Survey of Income and Program Participation (SIPP) panel data covering the 2001 and 2007 to 2009 recessions and their aftermaths, we identify individuals whose jobless spells outlasted their UI benefits (exhaustees) and examine household income, program participation, and health-related outcomes during the six months following UI exhaustion. For the average exhaustee, the loss of UI benefits is only slightly offset by increased participation in other safety net programs (e.g., food stamps), and family poverty rates rise substantially. Self-reported disability also rises following UI exhaustion. These patterns do not vary dramatically across household demographic groups, broad income level prior to job loss, or the two business cycles. The results highlight the unique, important role of UI in the U.S. social safety net.

Increasing Inequality in Parent Incomes and Children’s Schooling Greg J. Duncan, Ariel Kalil, Kathleen M. Ziol-Guest

Increasing Inequality in Parent Incomes and Children’s Schooling

Author: Greg J. Duncan, Ariel Kalil, Kathleen M. Ziol-Guest
Publisher: Demography
Date: 08/2017

Income inequality and the achievement test score gap between high- and low-income children increased dramatically in the United States beginning in the 1970s. This article investigates the demographic (family income, mother’s education, family size, two-parent family structure, and age of mother at birth) underpinnings of the growing income-based gap in schooling using data from the Panel Study of Income Dynamics. Across 31 cohorts, we find that increases in the income gap between high- and low-income children account for approximately three-quarters of the increasing gap in completed schooling, one-half of the gap in college attendance, and one-fifth of the gap in college graduation. We find no consistent evidence of increases in the estimated associations between parental income and children’s completed schooling. Increasing gaps in the two-parent family structures of high- and low-income families accounted for relatively little of the schooling gap because our estimates of the (regression-adjusted) associations between family structure and schooling were surprisingly small for much of our accounting period. On the other hand, increasing gaps in mother’s age at the time of birth accounts for a substantial portion of the increasing schooling gap: mother’s age is consistently predictive of children’s completed schooling, and the maternal age gap for children born into low- and high-income families increased considerably over the period.

The Other Side of Assimilation: How Immigrants Are Changing American Life Tomas Jimenez

The Other Side of Assimilation: How Immigrants Are Changing American Life

Author: Tomas Jimenez
Publisher: University of California Press
Date: 07/2017

The immigration patterns of the last three decades have profoundly changed nearly every aspect of life in the United States. What do those changes mean for the most established Americans—those whose families have been in the country for multiple generations?
 
The Other Side of Assimilation shows that assimilation is not a one-way street. Jiménez explains how established Americans undergo their own assimilation in response to profound immigration-driven ethnic, racial, political, economic, and cultural shifts. Drawing on interviews with a race and class spectrum of established Americans in three different Silicon Valley cities, The Other Side of Assimilation illuminates how established Americans make sense of their experiences in immigrant-rich environments, in work, school, public interactions, romantic life, and leisure activities. With lucid prose, Jiménez reveals how immigration not only changes the American cityscape but also reshapes the United States by altering the outlooks and identities of its most established citizens. 

all - CPI Affiliates

Sara McLanahan's picture Sara McLanahan Family Research Group Leader, Director of Bendheim-Thoman Center for Research on Child Wellbeing, William S. Tod Professor of Sociology and Public Affairs
Princeton University
Sean Reardon's picture Sean Reardon Education Research Group Leader, Life Course Research Group Leader, Professor of Poverty and Inequality
Stanford University
Karen Jusko's picture Karen Jusko Safety Net Research Group Leader, Assistant Professor of Political Science
Stanford University
Sean Reardon's picture Sean Reardon Education Research Group Leader, Life Course Research Group Leader, Professor of Poverty and Inequality
Stanford University
Kathryn Edin's picture Kathryn Edin Poverty Research Group Leader, Bloomberg Distinguished Professor of Sociology
Johns Hopkins University

Pages

All - Other Research

Title Author Media
Social Capital and Labor Market Networks Brian J. Asquith, Judith K. Hellerstein, Mark J. Kutzbach, David Neumark

Social Capital and Labor Market Networks

Author: Brian J. Asquith, Judith K. Hellerstein, Mark J. Kutzbach, David Neumark
Publisher: NBER
Date: 11/2017

We explore the links between social capital and labor market networks at the neighborhood level. We harness rich data taken from multiple sources, including matched employer-employee data with which we measure the strength of labor market networks, data on behavior such as voting patterns that have previously been tied to social capital, and new data – not previously used in the study of social capital – on the number and location of non-profits at the neighborhood level. We use a machine learning algorithm to identify potential social capital measures that best predict neighborhood-level variation in labor market networks. We find evidence suggesting that smaller and less centralized schools, and schools with fewer poor students, foster social capital that builds labor market networks, as does a larger Republican vote share. The presence of establishments in a number of non-profit oriented industries are identified as predictive of strong labor market networks, likely because they either provide public goods or facilitate social contacts. These industries include, for example, churches and other religious institutions, schools, country clubs, and amateur or recreational sports teams or clubs.

Reference-Dependent Job Search: Evidence from Hungary Stefano DellaVigna, Attila Lindner, Balázs Reizer, Johannes F. Schmieder

Reference-Dependent Job Search: Evidence from Hungary

Author: Stefano DellaVigna, Attila Lindner, Balázs Reizer, Johannes F. Schmieder
Publisher: Quarterly Journal of Economics
Date: 11/2017

We propose a model of job search with reference-dependent preferences, with loss aversion relative to recent income (the reference point). In this model, newly unemployed individuals search hard since consumption is below their reference point. Over time, though, they get used to lower income and thus reduce their search effort. In anticipation of a benefit cut, their search effort rises again, then declines once they get accustomed to the lower postcut benefit level. The model fits the typical pattern of exit from unemployment, even with no unobserved heterogeneity. To distinguish between this and other models, we use a unique reform in the unemployment insurance (UI) benefit path. In 2005, Hungary switched from a single-step UI system to a two-step system, with overall generosity unchanged. The system generated increased hazard rates in anticipation of, and especially following, benefit cuts in ways the standard model has a hard time explaining. We estimate a model with optimal consumption, endogenous search effort, and unobserved heterogeneity. The reference-dependent model fits the hazard rates substantially better than plausible versions of the standard model, including habit formation. Our estimates indicate a slow-adjusting reference point and substantial impatience, likely reflecting present-bias. 

Exploding Asthma and ADHD Caseloads: The Role of Medicaid Managed Care Anna Chorniy, Janet Currie, Lyudmyla Sonchak

Exploding Asthma and ADHD Caseloads: The Role of Medicaid Managed Care

Author: Anna Chorniy, Janet Currie, Lyudmyla Sonchak
Publisher: NBER
Date: 10/2017

In the U.S., nearly 11% of school-age children have been diagnosed with ADHD, and approximately 10% of children suffer from asthma. In the last decade, the number of children diagnosed with these conditions has inexplicably been on the rise. This paper proposes a novel explanation of this trend. First, the increase is concentrated in the Medicaid caseload nationwide. Second, nearly 80% of states transitioned their Medicaid programs from fee-for-service (FFS) reimbursement to managed care (MMC) by 2016. Using Medicaid claims from South Carolina, we show that this change contributed to the increase in asthma and ADHD caseloads. Empirically, we rely on exogenous variation in MMC enrollment due a change in the “default” Medicaid plan from FFS or MMC, and an increase in the availability of MMC. We find that the transition from FFS to MMC explains most of the rise in the number of Medicaid children being treated for ADHD and asthma. These results can be explained by the incentives created by the risk adjustment and quality control systems in MMC.

Gentrification and the Amenity Value of Crime Reductions: Evidence from Rent Deregulation David H. Autor, Christopher J. Palmer, Parag A. Pathak

Gentrification and the Amenity Value of Crime Reductions: Evidence from Rent Deregulation

Author: David H. Autor, Christopher J. Palmer, Parag A. Pathak
Publisher: NBER
Date: 10/2017

Gentrification involves large-scale neighborhood change whereby new residents and improved amenities increase property values. In this paper, we study whether and how much public safety improvements are capitalized by the housing market after an exogenous shock to the gentrification process. We use variation induced by the sudden end of rent control in Cambridge, Massachusetts in 1995 to examine within-Cambridge variation in reported crime across neighborhoods with different rent-control levels, abstracting from the prevailing city-wide decline in criminal activity. Using detailed location-specific incident-level criminal activity data assembled from Cambridge Police Department archives for the years 1992 through 2005, we find robust evidence that rent decontrol caused overall crime to fall by 16 percent—approximately 1,200 reported crimes annually—with the majority of the effect accruing through reduced property crime. By applying external estimates of criminal victimization’s economic costs, we calculate that the crime reduction due to rent deregulation generated approximately $10 million (in 2008 dollars) of annual direct benefit to potential victims. Capitalizing this benefit into property values, this crime reduction accounts for 15 percent of the contemporaneous growth in the Cambridge residential property values that is attributable to rent decontrol. Our findings establish that reductions in crime are an important part of gentrification and generate substantial economic value. They also show that standard cost-of-crime estimates are within the bounds imposed by the aggregate price appreciation due to rent decontrol.

The Non-Market Benefits of Education and Ability James J. Heckman, John Eric Humphries, Gregory Veramendi

The Non-Market Benefits of Education and Ability

Author: James J. Heckman, John Eric Humphries, Gregory Veramendi
Publisher: NBER
Date: 10/2017

This paper analyzes the non-market benefits of education and ability. Using a dynamic model of educational choice we estimate returns to education that account for selection bias and sorting on gains. We investigate a range of non-market outcomes including incarceration, mental health, voter participation, trust, and participation in welfare. We find distinct patterns of returns that depend on the levels of schooling and ability. Unlike the monetary benefits of education, the benefits to education for many non-market outcomes are greater for low-ability persons. College graduation decreases welfare use, lowers depression, and raises self-esteem more for less-able individuals.