In poor condition
Poverty Impedes Cognitive Function
Anandi Mani et al.
Science, 30 August 2013, Pages 976-980
Abstract:
The poor often behave in less capable ways, which can further perpetuate poverty. We hypothesize that poverty directly impedes cognitive function and present two studies that test this hypothesis. First, we experimentally induced thoughts about finances and found that this reduces cognitive performance among poor but not in well-off participants. Second, we examined the cognitive function of farmers over the planting cycle. We found that the same farmer shows diminished cognitive performance before harvest, when poor, as compared with after harvest, when rich. This cannot be explained by differences in time available, nutrition, or work effort. Nor can it be explained with stress: Although farmers do show more stress before harvest, that does not account for diminished cognitive performance. Instead, it appears that poverty itself reduces cognitive capacity. We suggest that this is because poverty-related concerns consume mental resources, leaving less for other tasks. These data provide a previously unexamined perspective and help explain a spectrum of behaviors among the poor. We discuss some implications for poverty policy.
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Shocking Behavior: Random Wealth in Antebellum Georgia and Human Capital Across Generations
Hoyt Bleakley & Joseph Ferrie
NBER Working Paper, August 2013
Abstract:
Does the lack of wealth constrain parents’ investments in the human capital of their descendants? We conduct a fifty-year followup of an episode in which such constraints would have been plausibly relaxed by a random allocation of wealth to families. We track descendants of those eligible to win in Georgia’s Cherokee Land Lottery of 1832, which had nearly universal participation among adult white males. Winners received close to the median level of wealth – a large financial windfall orthogonal to parents’ underlying characteristics that might have also affected their children’s human capital. Although winners had slightly more children than non-winners, they did not send them to school more. Sons of winners have no better adult outcomes (wealth, income, literacy) than the sons of non-winners, and winners’ grandchildren do not have higher literacy or school attendance than non-winners’ grandchildren. This suggests only a limited role for family financial resources in the transmission of human capital across generations and a potentially more important role for other factors that persist through family lines.
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When Unionization Disappears: State-Level Unionization and Working Poverty in the United States
David Brady, Regina Baker & Ryan Finnigan
American Sociological Review, October 2013, Pages 872-896
Abstract:
Although the working poor are a much larger population than the unemployed poor, U.S. poverty research devotes much more attention to joblessness than to working poverty. Research that does exist on working poverty concentrates on demographics and economic performance and neglects institutions. Building on literatures on comparative institutions, unionization, and states as polities, we examine the influence of a potentially important labor market institution for working poverty: the level of unionization in a state. Using the Luxembourg Income Study (LIS) for the United States, we estimate (1) multi-level logit models of poverty among employed households in 2010; and (2) two-way fixed-effects models of working poverty across seven waves of data from 1991 to 2010. Further, we replicate the analyses with the Current Population Survey while controlling for household unionization, and assess unionization’s potential influence on selection into employment. Across all models, state-level unionization is robustly significantly negative for working poverty. The effects of unionization are larger than the effects of states’ economic performance and social policies. Unionization reduces working poverty for both unionized and non-union households and does not appear to discourage employment. We conclude that U.S. poverty research can advance by devoting greater attention to working poverty, and by incorporating insights from the comparative literature on institutions.
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Growth Still is Good for the Poor
David Dollar, Tatjana Kleineberg & Aart Kraay
World Bank Working Paper, August 2013
Abstract:
Incomes in the poorest two quintiles on average increase at the same rate as overall average incomes. This is because, in a global dataset spanning 118 countries over the past four decades, changes in the share of income of the poorest quintiles are generally small and uncorrelated with changes in average income. The variation in changes in quintile shares is also small relative to the variation in growth in average incomes, implying that the latter accounts for most of the variation in income growth in the poorest quintiles. These findings hold across most regions and time periods and when conditioning on a variety of country-level factors that may matter for growth and inequality changes. This evidence confirms the central importance of economic growth for poverty reduction and illustrates the difficulty of identifying specific macroeconomic policies that are significantly associated with the relative growth rates of those in the poorest quintiles.
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The Real Impact of Improved Access to Finance: Evidence from Mexico
Miriam Bruhn & Inessa Love
Journal of Finance, forthcoming
Abstract:
This paper provides new evidence on the impact of access to finance on poverty. It highlights an important channel through which access affects poverty – the labor market. The paper exploits the opening of Banco Azteca in Mexico, a unique “natural experiment” in which over 800 bank branches opened almost simultaneously in pre-existing Elektra stores. Importantly, the bank has focused on previously underserved low-income clients. Our key finding is a sizeable effect of access to finance on labor market activity and income levels, especially among low-income individuals and those located in areas with lower pre-existing bank penetration.
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Peter Ganong & Jeffrey Liebman
NBER Working Paper, August 2013
Abstract:
Approximately 1-in-7 people and 1-in-4 children received benefits from the US Supplemental Nutrition Assistance Program (SNAP) in July 2011, both all-time highs. We analyze changes in SNAP take-up over the past two decades. From 1994 to 2001, coincident with welfare reform, take-up fell from 75% to 54% of eligible people. The take-up rate then rebounded, and, following several policy changes to improve program access, stabilized at 69% in 2007. Finally, take-up and enrollment rose dramatically in the Great Recession, with take-up reaching 87% in 2011. We find that changes in local unemployment can explain at least two-thirds of the increase in enrollment from 2007 to 2011. Increased state adoption of relaxed income and asset thresholds and temporary changes in program rules for childless adults explain 18% of the increase. Total SNAP spending today is 6% higher than it would be without these increases in eligibility. The recession-era increase in benefit levels is also likely to have increased enrollment.
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The Role of Transfer Payments in Mitigating Shocks: Evidence from the Impact of Hurricanes
Tatyana Deryugina
University of Illinois Working Paper, August 2013
Abstract:
Little is known about how aggregate economic shocks are mitigated by social safety nets. I use hurricanes as an exogenous shock to the economies of US counties and show that non-disaster government transfers, such as unemployment insurance and public medical spending, increase substantially in the decade after landfall. Indeed, I estimate that the net present value of the increase in non-disaster transfers is more than double that of direct disaster aid. Among the implications of these findings are that the fiscal costs of natural disasters are much larger than previously thought and that existing social safety net programs help to mitigate the effects of macroeconomic shocks.
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Moral Habitus and Status Negotiation in a Marginalized Working-Class Neighborhood
Bige Saatcioglu & Julie Ozanne
Journal of Consumer Research, forthcoming
Abstract:
Examinations of the moral and ethical dimensions in identity construction are scant in consumer research. This ethnography of a trailer-park neighborhood investigates how different moral dispositions shape low-income, working-class residents’ consumption practices and status negotiations. Drawing from Bourdieu’s conceptualization of habitus and cultural capital, the authors extend this theory by foregrounding the moral aspects of habitus and demonstrate how morally oriented worldviews are enacted through consumption practices and social evaluations within everyday communities. The study reveals five moral identities that shape the residents’ social construction of status within the microcultural context of a trailer park. These findings point to the multiplicity and richness of social-class-based dispositions as well as the importance of studying micro-level contexts to better understand macrodynamics.
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Amir Sariaslan et al.
International Journal of Epidemiology, August 2013, Pages 1057-1066
Background: A number of studies suggest associations between neighbourhood characteristics and criminality during adolescence and young adulthood. However, the causality of such neighbourhood effects remains uncertain.
Methods: We followed all children born in Sweden from 1975–1989 who lived in its three largest cities by the age of 15 years and for whom complete information was available about individual and contextual factors (N = 303 465). All biological siblings were identified in the sample (N = 179 099). Generalized linear mixed-effects models were used to assess the effect of neighbourhood deprivation on violent criminality and substance misuse between the ages of 15 and 20 years, while taking into account the cross-classified data structure (i.e. siblings in the same families attending different schools and living in different neighbourhoods at age 15).
Results: In the crude model, an increase of 1 SD in neighbourhood deprivation was associated with a 57% increase in the odds of being convicted of a violent crime (95% CI 52%–63%). The effect was greatly attenuated when adjustment was made for a number of observed confounders (OR 1.09, 95% CI 1.06–1.11). When we additionally adjusted for unobserved familial confounders, the effect was no longer present (OR 0.96, 95% CI 0.84–1.10). Similar results were observed for substance misuse. The results were not due to poor variability either between neighbourhoods or within families.
Conclusions: We found that the adverse effect of neighbourhood deprivation on adolescent violent criminality and substance misuse in Sweden was not consistent with a causal inference. Instead, our findings highlight the need to control for familial confounding in multilevel studies of criminality and substance misuse.
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Continued Existence of Cows Disproves Central Tenets of Capitalism?
Santosh Anagol, Alvin Etang & Dean Karlan
NBER Working Paper, September 2013
Abstract:
We examine the returns from owning cows and buffaloes in rural India. We estimate that when valuing labor at market wages, households earn large, negative average returns from holding cows and buffaloes, at negative 64% and negative 39% respectively. This puzzle is mostly explained if we value the household’s own labor at zero (a stark assumption), in which case estimated average returns for cows is negative 6% and positive 13% for buffaloes. Why do households continue to invest in livestock if economic returns are negative, or are these estimates wrong? We discuss potential explanations, including labor market failures, for why livestock investments may persist.
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Testing Information Constraints on India's Largest Antipoverty Program
Martin Ravallion et al.
World Bank Working Paper, September 2013
Abstract:
Public knowledge about India's ambitious Employment Guarantee Scheme is low in one of India's poorest states, Bihar, where participation is also unusually low. Is the solution simply to tell people their rights? Or does their lack of knowledge reflect deeper problems of poor people's agency and an unresponsive supply side? This paper reports on an information campaign that was designed and implemented in the form of an entertaining movie to inform people of their rights under the scheme. In randomly-assigned villages, the movie brought significant gains in knowledge and more positive perceptions about the impact of the scheme. But objectively measured employment showed no gain on average, suggesting that the movie created a "groupthink," changing social perceptions about the scheme but not individual efficacy in accessing it. The paper concludes that awareness generation needs to go hand-in-hand with supply-side changes.
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Living standards and mortality since the middle ages
Morgan Kelly & Cormac Ó Gráda
Economic History Review, forthcoming
Abstract:
Existing studies find little connection between living standards and mortality in England, but go back only to the sixteenth century. Using new data on inheritances, we extend estimates of mortality back to the mid-thirteenth century and find, by contrast, that deaths from unfree tenants to the nobility were strongly affected by living standards. Looking at a large sample of parishes after 1540, we find that the positive check had weakened considerably by 1650 even though living standards were static at best, but persisted in London for another century despite its higher wages. In both cases the disappearance of the positive check coincided with the introduction of systematic poor relief, suggesting that government action may have played a role in breaking the link between harvest failure and mass mortality.
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Micere Keels
American Educational Research Journal, October 2013, Pages 991-1018
Abstract:
I examine several potential explanations for recent evidence showing a lack of improvement in the academic achievement of children participating in several poverty reduction residential mobility programs. Detailed interviews and field notes about the relocation and school experiences of 80 children in the Gautreaux II residential mobility program are used. I find that for low-income children living in large central cities, residence in low-poverty neighborhoods has little effect on the opportunity to attend high-achieving schools. For those who relocated to suburban cities, neighborhood and school transition and adjustment difficulties create barriers that must be overcome for children to reap the educational benefits of attending high-achieving, highly resourced schools.
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Family Income, School Attendance, and Academic Achievement in Elementary School
Taryn Morrissey, Lindsey Hutchison & Adam Winsler
Developmental Psychology, forthcoming
Abstract:
Low family income is associated with poor academic achievement among children. Higher rates of school absence and tardiness may be one mechanism through which low family income impacts children’s academic success. This study examines relations between family income, as measured by receipt of free or reduced-price lunch, school attendance, and academic achievement among a diverse sample of children from kindergarten to 4th grade (N = 35,419) using both random and within-child fixed-effects models. Generally, results suggest that the receipt of free or reduced-price lunch and duration of receipt have small but positive associations with school absences and tardies. Poor attendance patterns predict poorer grades, with absences more associated with grades than tardies. Given the small associations between receipt of free or reduced-price lunch and school attendance, and between the duration of receipt of free or reduced-price lunch and children’s grades, results do not provide strong evidence that absences and tardies meaningfully attenuate relations between the duration of low family income and student achievement; poorer attendance and persistent low income independently predict poorer grades. Implications for policy and future research are discussed.
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Marianne Bitler & Hilary Hoynes
NBER Working Paper, September 2013
Abstract:
Much attention has been given to the large increase in safety net spending, particularly in Unemployment Insurance and Food Stamps, during the Great Recession. In this paper we examine the relationship between poverty, the social and private safety net, and business cycles historically and test whether there has been a significant change in this relationship during the Great Recession. This analysis yields several important findings. First, the relationship between unemployment and official cash poverty remained remarkably consistent with historical patterns during the Great Recession. Second, the safety net programs receiving the most attention through the Great Recession (Food Stamps and UI) exhibit adjustments very consistent with their behavior during previous historical cycles. The most dramatic change in the safety net is the post-welfare reform decline of cash assistance in providing protection for the most disadvantaged. Third, changes in living arrangements are modest and for the most part in line with prior cycles. Thus on balance we find, as our title suggests, that despite the attention to the apparent differences in the responses of the private and social safety nets in the Great Recession, the relationship between cycles and economic well-being are as we would have predicted from the historical patterns.
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Margaret Sheridan et al.
Developmental Science, September 2013, Pages 665–675
Abstract:
The association of parental social status with multiple health and achievement indicators in adulthood has driven researchers to attempt to identify mechanisms by which social experience in childhood could shift developmental trajectories. Some accounts for observed linkages between parental social status in childhood and health have hypothesized that early stress exposure could result in chronic disruptions in hypothalamic-pituitary-adrenal (HPA) axis activation, and that this activation could lead to long-term changes. A robust literature in adult animals has demonstrated that chronic HPA axis activation leads to changes in hippocampal structure and function. In the current study, consistent with studies in animals, we observe an association between both maternal self-rated social status and hippocampal activation in children and between maternal self-rated social status and salivary cortisol in children.
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Clancy Blair et al.
Psychoneuroendocrinology, forthcoming
Abstract:
The relation of the cumulative experience of poverty in infancy and early childhood to child cortisol at age 48 months was examined in a prospective longitudinal sample of children and families (N = 1292) in predominantly low-income and rural communities in two distinct regions of the United States. Families were seen in the home for data collection and cumulative experience of poverty was indexed by parent reported income-to-need ratio and household chaos measures collected between child ages 2 months and 48 months. For the analysis presented here, three saliva samples were also collected over an approximate 90 min interval at child age 48 months and were assayed for cortisol. ECG data were also collected during a resting period and during the administration of a mildly challenging battery of cognitive tasks. Mixed model analysis indicated that child cortisol at 48 months decreased significantly over the sampling time period and that cumulative time in poverty (number of years income-to-need less than or equal to 1) and cumulative household chaos were significantly related to a flatter trajectory for cortisol change and to an overall higher level of cortisol, respectively. Findings also indicated that respiratory sinus arrhythmia derived from the ECG data moderated the association between household chaos and child cortisol and that increase in respiratory sinus arrhythmia during the cognitive task was associated with an overall lower level of cortisol at 48 months.
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Adam Hayward, Ian Rickard & Virpi Lummaa
Proceedings of the National Academy of Sciences, 20 August 2013, Pages 13886-13891
Abstract:
Individuals with insufficient nutrition during development often experience poorer later-life health and evolutionary fitness. The Predictive Adaptive Response (PAR) hypothesis proposes that poor early-life nutrition induces physiological changes that maximize fitness in similar environments in adulthood and that metabolic diseases result when individuals experiencing poor nutrition during development subsequently encounter good nutrition in adulthood. However, although cohort studies have shown that famine exposure in utero reduces health in favorable later-life conditions, no study on humans has demonstrated the predicted fitness benefit under low later-life nutrition, leaving the evolutionary origins of such plasticity unexplored. Taking advantage of a well-documented famine and unique datasets of individual life histories and crop yields from two preindustrial Finnish populations, we provide a test of key predictions of the PAR hypothesis. Known individuals from fifty cohorts were followed from birth until the famine, where we analyzed their survival and reproductive success in relation to the crop yields around birth. We were also able to test whether the long-term effects of early-life nutrition differed between individuals of varying socioeconomic status. We found that, contrary to predictions of the PAR hypothesis, individuals experiencing low early-life crop yields showed lower survival and fertility during the famine than individuals experiencing high early-life crop yields. These effects were more pronounced among young individuals and those of low socioeconomic status. Our results do not support the hypothesis that PARs should have been favored by natural selection and suggest that alternative models may need to be invoked to explain the epidemiology of metabolic diseases.
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Cycling to School: Increasing Secondary School Enrollment for Girls in India
Karthik Muralidharan & Nishith Prakash
NBER Working Paper, August 2013
Abstract:
We study the impact of an innovative program in the Indian state of Bihar that aimed to reduce the gender gap in secondary school enrollment by providing girls who continued to secondary school with a bicycle that would improve access to school. Using data from a large representative household survey, we employ a triple difference approach (using boys and the neighboring state of Jharkhand as comparison groups) and find that being in a cohort that was exposed to the Cycle program increased girls' age-appropriate enrollment in secondary school by 30% and also reduced the gender gap in age-appropriate secondary school enrollment by 40%. Parametric and non-parametric decompositions of the triple-difference estimate as a function of distance to the nearest secondary school show that the increases in enrollment mostly took place in villages where the nearest secondary school was further away, suggesting that the mechanism for program impact was the reduction in the time and safety cost of school attendance made possible by the bicycle. We find that the Cycle program was much more cost effective at increasing girls' enrolment than comparable conditional cash transfer programs in South Asia, suggesting that the coordinated provision of bicycles to girls may have generated externalities beyond the cash value of the program, including improved safety from girls cycling to school in groups, and changes in patriarchal social norms that proscribed female mobility outside the village, which inhibited female secondary school participation.
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Poor relief in Elizabethan English communities: An analysis of Collectors' accounts
Marjorie McIntosh
Economic History Review, forthcoming
Abstract:
This article analyses 30 accounts of income and expenditure left by Collectors for the Poor in Elizabethan England, before the period known as the old poor law. Collectors were appointed by parishes and incorporated boroughs in accordance with the poor laws of 1552 and 1563, but few of their fragile records survive. The accounts examined here document early use of compulsory rates to provide income, but several features of the distribution of relief differ from patterns common in the seventeenth and eighteenth centuries. Adult male recipients outnumbered women in many of the parishes; children were frequently helped directly; and cities and towns assisted a smaller fraction of their total populations than did villages but awarded larger per capita payments. Accounts from the 10 villages and small towns analysed most fully show that Elizabethan Collectors were moving away from the late medieval practice of providing only occasional aid; increasingly they awarded regular payments to a selected subset of the local poor. Comparison with the early seventeenth century suggests that the poor laws of 1598 and 1601 contributed to a transition that was already underway but did not create a new system of relief.
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War and Women’s Work: Evidence from the Conflict in Nepal
Nidhiya Menon & Yana van der Meulen Rodgers
Journal of Conflict Resolution, forthcoming
Abstract:
This article examines how Nepal’s 1996–2006 civil conflict affected women’s decisions to engage in employment. Using three waves of the Nepal Demographic and Health Survey, we employ a difference-in-difference approach to identify the impact of war on women’s employment decisions. Results indicate that women’s likelihood of employment increased as a consequence of the conflict, a conclusion that holds for self-employment decisions and is robust to numerous sensitivity tests. The findings support the argument that women’s additional employment — rather than greater dependence on remittances and subsistence work — serves as an important source of resilience during times of crisis.