Illiquid
The Levels and Trends in Deep and Extreme Poverty in the United States, 1993-2016
David Brady & Zachary Parolin
Demography, December 2020, Pages 2337-2360
Abstract:
Recently, there has been tremendous interest in deep and extreme poverty in the United States. We advance beyond prior research by using higher-quality data, improving measurement, and following leading standards in international income research. We estimate deep (less than 20% of medians) and extreme (less than 10% of medians) poverty in the United States from 1993 to 2016. Using the Current Population Survey, we match the income definition of the Luxembourg Income Study and adjust for underreporting using the Urban Institute's TRIM3 model. In 2016, we estimate that 5.2 to 7.2 million Americans (1.6% to 2.2%) were deeply poor and 2.6 to 3.7 million (0.8% to 1.2%) were extremely poor. Although deep and extreme poverty fluctuated over time, including declines from 1993 to 1995 and 2007 to 2010, we find significant increases from lows in 1995 to peaks in 2016 in both deep (increases of 48% to 93%) and extreme poverty (increases of 54% to 111%). We even find significant increases with thresholds anchored at 1993 medians. With homelessness added, deep poverty would be 7% to 8% higher and extreme poverty 19% to 23% higher in 2016, which suggests that our estimates are probably lower bounds. The rise of deep/extreme poverty is concentrated among childless households. Among households with children, the expansion of SNAP benefits has led to declines in deep/extreme poverty. Ultimately, we demonstrate that estimates of deep/extreme poverty depend critically on the quality of income measurement.
Effects of Welfare Reform on Parenting
Nancy Reichman et al.
NBER Working Paper, November 2020
Abstract:
This study investigated the effects of welfare reform in the 1990s, which represented a major policy shift that substantially and permanently retracted cash assistance to poor mothers in the U.S., on parenting. Using data on women from the 1979 cohort of the National Longitudinal Survey of Youth linked with information on their 10- to 14-year-old children from the Child Self-Administered and Self-Report surveys, we exploited variation in the implementation of welfare reform across states, over time, and across treatment and comparison groups to estimate the effects of welfare reform on parent-child activities and closeness of the mother-child relationship. We found that welfare reform had adverse effects on engagement in parent-child activities, children feeling close to their mothers, and mothers knowing their children's whereabouts, with the effects generally concentrated among boys. These findings have implications for children's development and contribute to a virtually non-existent literature on the effects of welfare reform on parenting and the small but growing economic literature on parenting. We found no evidence that the effects of welfare reform on parenting operated through the mother working more than full time, having multiple jobs, working in a service job, or having a non-standard work schedule.
Does the Temporal Pattern of Moving to a Higher Quality Neighborhood across a 5-Year Period Predict Psychological Distress among Adolescents? Results from a Federal Housing Experiment
Nicole Schmidt, Maria Glymour & Theresa Osypuk
American Journal of Epidemiology, forthcoming
Abstract:
Using the Moving to Opportunity (MTO) experiment (1994-2002), this study examined how a multidimensional measure of neighborhood quality over time influenced adolescent psychological distress, using instrumental variable (IV) analysis. Neighborhood quality was operationalized with an independently-validated 19-indicator child opportunity index (COI), linked to MTO family addresses over 4-7 years. We examined if being randomized to receive a housing subsidy (versus remaining in public housing) predicted neighborhood quality across time. Using IV analysis, we tested if experimentally induced differences in COI across time predicted psychological distress (N=2829; Mean(standard deviation (SD)) = -.04(1.12)). The MTO voucher treatment improved neighborhood quality for children compared to in-place controls. A one-SD change in COI since baseline predicted 0.32 point lower psychological distress for girls (B(95%CI)= -0.32 (-0.61, -0.03)). Results were comparable but less precisely estimated when operationalizing neighborhood quality as simply average post-random assignment COI, (B(95%CI)= -0.36(-0.74, 0.02). Effect estimates based on a COI excluding poverty and on the most recent COI measure were slightly larger than other operationalizations of neighborhood quality. Improving a multidimensional measure of neighborhood quality led to reductions in low-income girls' psychological distress, and this was estimated with high internal validity using IV methods.
The Children of HOPE VI Demolitions: National Evidence on Labor Market Outcomes
John Haltiwangeret al.
NBER Working Paper, November 2020
Abstract:
We combine national administrative data on earnings and participation in subsidized housing to study how the demolition of 160 public housing projects - funded by the HOPE VI program - affected the adult labor market outcomes for 18,500 children. Our empirical strategy compares children exposed to the program to children drawn from thousands of non-demolished projects, adjusting for observable differences using a flexible estimator that combines features of matching and regression. We find that children who resided in HOPE VI projects earn 14% more at age 26 relative to children in comparable non-HOPE VI projects. These earnings gains are strongest for demolitions in large cities, particularly in neighborhoods with higher pre-demolition poverty rates and lower pre-demolition job accessibility. There is no evidence that the labor market gains are driven by improvements in household or neighborhood environments that promote human capital development in children. Rather, subsequent improvements in job accessibility represent a likely pathway for the results.
Happy 18th Birthday, Now Leave: The Hardships of Aging Out of Foster Care
Alexa Prettyman
Georgia State University Working Paper, October 2020
Abstract:
Over 20,000 youth age out of foster care each year in the United States and face various hardships, such as homelessness, incarceration, low educational attainment, and unemployment. Recognizing these challenges, states have implemented programs that assist foster youth as they transition to adulthood. I use a difference-in-differences approach and exploit the staggered roll-out of one such program, extended foster care, between the years 2012 and 2016. In doing so, I provide some of the earliest nationwide evidence of the effects of this program on the transition to adulthood. Data come from the National Youth in Transition Database, a longitudinal survey that collects information from foster youth at ages 17, 19, and 21, and are linked to the Adoption and Foster Care Analysis and Reporting System, which contains information about individuals' foster care history. I find evidence that extended foster care reduces hardships, like homelessness, incarceration, and disconnectedness, and increases educational attainment. I also find that extended foster care primarily helps youth who were living with a foster family prior to turning 18 (as opposed to in a group home) and appears to mitigate the hardships of experiencing homelessness and substance abuse as a child. Back-of-the-envelope calculations suggest that extended foster care yields a 2:1 return on investment.
Food Bank Donations and Retail Pricing
John Lowrey, Timothy Richards & Stephen Hamilton
Arizona State University Working Paper, December 2020
Abstract:
Food banks are an important part of the food-retailing setting. In 2018, food banks delivered a total of 1.4 billion pounds of donated food to 51.4 million clients. Perhaps more importantly, food banks serve as an important outlet for food that would otherwise be discarded in land-fills, or composted. Despite the economic and social importance of food banks, we know very little of their economic role in food distribution. In this article, we explain the existence of food banks as an essential mechanism to the food-retailing function, permitting food retailers to price-discriminate between high-valuation consumers who visit their stores, and low-valuation consumers who do not. Donating to food banks allows retailers to avoid destructive promotions for fresh products, provide an outlet for over-ordering to prevent stock-outs, and generates valuable tax write-offs. We show how secondary markets for perishable food products improve profitability, and we test the implications of our model using a unique data set of perishable food sales. We find that retailers that take advantage of secondary markets are more profitable than those that do not. Our findings explain the co-existence of traditional food retailers, and food banks.
Weekend feeding ("BackPack") programs and student outcomes
Michael Kurtz, Karen Smith Conway & Robert Mohr
Economics of Education Review, forthcoming
Abstract:
Weekend feeding ("BackPack") programs that provide food to children have grown dramatically in recent years, yet their effects on educational outcomes have been little investigated. Our study combines administrative student data on test scores and absences in Northwest North Carolina elementary schools with primary data on program participation. School and student program eligibility criteria is used to estimate the intent-to-treat effect within a difference-in-difference-in-difference (DDD) framework. Results suggest a sizable 0.09 standard deviation improvement in reading scores, with a similar but weaker effect for math scores. These effects are strongest for the youngest and lowest performing students.
Exploring Spatial Clustering Over Time and Spillover Effects of the Low-Income Housing Tax Credit on Neighborhood-Level Income Segregation
Jongho Won
Urban Affairs Review, forthcoming
Abstract:
This study investigates the longitudinal and spatial patterns and spillover effects of Low-Income Housing Tax Credit (LIHTC) developments on neighborhood-level income segregation. Focusing on all MSAs in the U.S., the results show that LIHTC units have been spatially clustered in socioeconomically disadvantaged neighborhoods over time. This research also explores the spillover effects of LIHTC units on neighborhood economic status by utilizing propensity scores and weighted linear regression to address a self-selection bias of developers' decisions regarding the location of LIHTC projects. The results suggest that LIHTC developments, in general, are expected to increase the concentration of households that have lower income than the average household income of the MSA. However, in high-poverty neighborhoods, LIHTC developments yield positive spillover effects on neighborhood economic status. Moreover, providing LIHTC units in high-poverty neighborhoods where LIHTC units were built previously in the focal or any adjacent neighborhood also improves neighborhood economic status.