Mere Dollars
The Intergenerational Transmission of Poverty and Public Assistance: Evidence from the Earned Income Tax Credit
Nicardo McInnis, Katherine Michelmore & Natasha Pilkauskas
NBER Working Paper, July 2023
Abstract:
This paper examines the intergenerational effects of the Earned Income Tax Credit (EITC) on poverty and public assistance use. Using data from the PSID, we find that increased exposure to the EITC in childhood reduces the use of public assistance in adulthood (WIC and other public assistance) and reduces the likelihood of being in poverty (<100% of poverty) or near poor (<200% of poverty) by about 7 percentage points. These findings build on a growing literature that considers the intergenerational impacts of public policy and suggests that the economic benefits of policies in one generation may have long-term effects on the next generation.
A quantitative evaluation of universal basic income
Juan Carlos Conesa, Bo Li & Qian Li
Journal of Public Economics, July 2023
Abstract:
We provide a quantitative evaluation of the impact of Universal Basic Income (UBI) as an alternative to the existing system of means-tested transfers. We explore varying levels of UBI generosity, paired with different strategies to finance it. All the reforms we consider result in welfare losses for a huge majority of initial households. Moreover, these losses are increasing in UBI generosity. A reform financed with consumption taxes implies lower efficiency losses than reforms financed with income taxes, but fewer individuals benefit from it.
Trends in the Retirement Preparedness of Black and Hispanic Households in the US
Edward Wolff
NBER Working Paper, August 2023
Abstract:
Retirement income security refers to the ability of households to provide an adequate stream of income during the period of their retirement from the labor force. Expected retirement income is based of four components: (i) standard non-pension wealth holdings, (ii) defined contribution (DC) pension holdings, (iii) actual or expected defined benefit (DB) pension entitlements, and (iv) actual or expected Social Security benefits. The first two components are converted into an annuity. All the data (except rates of return) for these calculations are available from the Survey of Consumer Finances. Results indicate that both Black and Hispanic households made remarkable progress in terms of mean and median retirement income, poverty reduction, and replacement rates from 1989 to 2007 in both absolute terms and relative to whites. However, for Black households, this was followed by a reversal of fortune from 2007 to 2019, with expected median retirement income declining, the projected poverty rate rising, and the projected replacement rate falling, though expected mean retirement income does rise. Hispanics also experienced a setback in mean retirement income but continued progress in replacement rates and reducing poverty from 2007 to 2019.
The Long-Term Effects of Neighborhood Disadvantage on Voting Behavior: The “Moving to Opportunity” Experiment
Elizabeth Mitchell Elder, Ryan Enos & Tali Mendelberg
American Political Science Review, forthcoming
Abstract:
Socioeconomic disadvantage is a major correlate of low political participation. This association is among the most robust findings in political science. However, it is based largely on observational data. The causal effects of early-life disadvantage in particular are even less understood, because long-term data on the political consequences of randomized early-life anti-poverty interventions is nearly nonexistent. We leverage the Moving to Opportunity (MTO) experiment to test the long-term effect of moving out of disadvantaged neighborhoods -- and thus out of deep poverty -- on turnout. MTO is one of the most ambitious anti-poverty experiments ever implemented in the United States. Although MTO ameliorated children’s poverty long term, we find that, contrary to expectations, the intervention did not increase children’s likelihood of voting later in life. Additional tests show the program did not ameliorate their poverty enough to affect turnout. These findings speak to the complex relationship between neighborhood disadvantage and low political participation.
Urban visual intelligence: Uncovering hidden city profiles with street view images
Zhuangyuan Fan et al.
Proceedings of the National Academy of Sciences, 4 July 2023
Abstract:
A longstanding line of research in urban studies explores how cities can be understood through their appearance. However, what remains unclear is to what extent urban dwellers’ everyday life can be explained by the visual clues of the urban environment. In this paper, we address this question by applying a computer vision model to 27 million street view images across 80 counties in the United States. Then, we use the spatial distribution of notable urban features identified through the street view images, such as street furniture, sidewalks, building façades, and vegetation, to predict the socioeconomic profiles of their immediate neighborhood. Our results show that these urban features alone can account for up to 83% of the variance in people’s travel behavior, 62% in poverty status, 64% in crime, and 68% in health behaviors. The results outperform models based on points of interest (POI), population, and other demographic data alone. Moreover, incorporating urban features captured from street view images can improve the explanatory power of these other methods by 5% to 25%. We propose “urban visual intelligence” as a process to uncover hidden city profiles, infer, and synthesize urban information with computer vision and street view images. This study serves as a foundation for future urban research interested in this process and understanding the role of visual aspects of the city.
Mothers as Insurance: Family Spillovers in WIC
Marianne Bitler et al.
Journal of Health Economics, forthcoming
Abstract:
The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) is a widely used program. Previous research shows that WIC improves birth outcomes, but evidence about impacts on older children and their families is limited. We use a regression discontinuity leveraging a loss of benefits at age five when children become ineligible for WIC and examine nutritional and laboratory outcomes for adults and children. We find little impact on children who aged out of the program. But caloric intake falls and food insecurity increases among adult women, suggesting that mothers protect children by consuming less themselves. We find no effect on others in the household.
Social Security Claiming Intentions: Psychological Ownership, Loss Aversion, and Information Displays
Suzanne Shu & John Payne
NBER Working Paper, July 2023
Abstract:
For many Americans the question of when to claim Social Security benefits is one of the most consequential financial decisions they will ever face. While acknowledging that individuals differ in terms of optimal timing for starting Social Security benefits, many economists argue that an average person would benefit from delaying claiming as long as they could. Yet this is not what average Americans do. Many more Americans claim as soon as possible, at age 62, rather than as late as possible, at age 70. Why? This paper focuses on individual differences in beliefs and values that influence Social Security claiming intentions. As expected from economic theory, individual differences in life expectations and degree of patience for later larger payouts relate to claiming intentions. In addition, however, we also find that individual differences in psychological ownership of one’s Social Security benefits and individual differences in degree of loss aversion are both significant predictors of Social Security claiming intentions. Further, we find that an “enriched” information display manipulation (nudge) that emphasizes longer-term consequences of late claiming leads to earlier, not later, claiming intentions, and that the size of this effect is related to individual differences in the degree of loss aversion.
Impact of demolitions on neighboring property values in Detroit
Camila Alvayay Torrejón, Dusan Paredes & Mark Skidmore
Journal of Regional Science, forthcoming
Abstract:
Urban blight is a complex problem that has been challenging for cities in the United States “Rust Belt” region for many decades. However, in the wake of the real estate and financial crisis, it is also a growing challenge for urban communities in many states such as California, Arizona, Nevada, and Texas. Detroit was particularly hit hard, where more than 40,000 blighted structures were identified in 2014. To curb blight, the city mobilized the most extensive demolition program in the country. Funded through the Federal Hardest Hit Fund (HHF), the Detroit Demolition Program began in 2014 and has demolished more than 20,800 properties at the cost of over $250 million. Furthermore, during 2009–2015, the city demolished 11,400 structures with hazardous materials such as asbestos. In this article, we assess the impacts of demolitions on the value of neighboring properties using a Repeat Sales (RS) regression approach. Specifically, we use housing sales price information from 2009 through 2019 to construct real estate price indices. We also rely on information from the 2009 Detroit Residential Survey to differentiate by dilapidation and blight levels before the start of the program. On average, blight removal through the demolition program does not appear to have been capitalized into the residential property prices. However, when considering the effect of ex-ante program property characteristics, we find a modest positive effect of demolitions on property prices in areas with a low level of blight before the demolitions. Given the magnitude of the observed effect and the high costs associated with the demolition program, our results highlight the need for further research on alternative blight removal strategies that might provide a more cost-effective solution to this urban challenge.