Out of Nothing
Why is the American South Poorer?
Regina Baker
Social Forces, forthcoming
Abstract:
While American poverty research has devoted greater attention to poverty in the Northeast and Midwest, poverty has been persistently higher in the U.S. South than in the other regions. Thus, this study investigates the enduring question of why poverty is higher in the South. Specifically, it demonstrates the role of power resources as an explanation for this regional disparity, yet also considers family demography, economic structure, and racial/ethnic heterogeneity. Using six waves (2000-2016) of U.S. Census Current Population Survey data from the Luxembourg Income Study (N = 1,157,914), this study employs a triangulation of analytic techniques: (1) tests of means and proportion differences, (2) multilevel linear probability models of poverty, and (3) binary decomposition of the South/non-South poverty gap. The comparison of means associated with the power resource hypothesis yields the largest substantive differences between the South and the non-South. In the multilevel models, adjusting for power resources yields the largest declines in the South coefficient. Binary decomposition results indicate power resources are the second most influential factor explaining the South/non-South poverty gap. Overall, power resources are an important source of the South/non-South poverty gap, though economic structure and other factors certainly also play a role. Results also suggest an important interplay between power resources and race. Altogether, these results underscore the importance of macrolevel characteristics of places, including political and economic contexts, in shaping individual poverty and overall patterns of inequality.
Moved to Vote: The Long-Run Effects of Neighborhoods on Political Participation
Eric Chyn & Kareem Haggag
NBER Working Paper, November 2019
Abstract:
How does one's childhood neighborhood shape political engagement later in life? We leverage a natural experiment that moved children out of disadvantaged neighborhoods to study effects on their voting behavior more than a decade later. Using linked administrative data, we find that children who were displaced by public housing demolitions and moved using housing vouchers are 12 percent (3.3 percentage points) more likely to vote in adulthood, relative to their non-displaced peers. We argue that this result is unlikely to be driven by changes in incarceration or in their parents' outcomes, but rather by improvements in education and labor market outcomes, and perhaps by socialization. These results suggest that, in addition to reducing economic inequality, housing assistance programs that improve one's childhood neighborhood may be a useful tool in reducing inequality in political participation.
Does Growing Up in Tax-Subsidized Housing Lead to Higher Earnings and Educational Attainment?
Elena Derby
Georgetown University Working Paper, November 2019
Abstract:
This paper investigates the effects of the Low Income Housing Tax Credit (LIHTC) on residents of buildings qualifying for the credit. Specifically, it analyzes whether individuals who grow up in LIHTC housing are more likely to enroll in post-secondary education programs and have higher earnings as adults. Using administrative tax records, I find that each additional year spent in LIHTC housing as a kid is associated with a 3.5 percent increase in the likelihood of attending a higher education program for four years or more, and a 3.2 percent increase in future earnings. Furthermore, I find that there are heterogeneous effects when comparing individuals who live in LIHTC housing located in neighborhoods with different characteristics, and among families that have varying levels of housing security prior to entering a LIHTC building. Based on this analysis, I conclude that the driving mechanism behind the positive estimated LIHTC effect is likely that the housing subsidy provides families with a more stable living situation.
Financial resources and decisions to avoid information about environmental perils
Joy Losee, James Shepperd & Gregory Webster
Journal of Applied Social Psychology, forthcoming
Abstract:
Environmental perils pose threats that require mitigation. Mitigation requires knowledge of the threat. Ironically, people may opt to avoid information about an environmental peril, especially if they lack resources to respond and the mitigation burden is high or costly. Three experiments (N = 845) examined how available resources and the resource burden of responding to an environmental peril affect the perceived of burden of taking action, and how perceiving burden, in turn, affects avoidance of information about the threat. Experiments 1a and 1b revealed that lower perceived likelihood of taking action and low income predicted a greater tendency to avoid hurricane risk information among Florida residents. Experiment 2 examined receptivity to information about home radon levels and manipulated the burden required to make repairs ($200 vs. $2,000). Having low income and learning repairs were costly corresponded with greater perceived burden of taking action, which predicted a lower likelihood to repair and greater information avoidance. These findings demonstrate that facing a high mitigation burden and lacking resources can lead to remaining uninformed about risks posed by environmental perils. Remaining uninformed is problematic because it may increase people's vulnerability to damage from these threats. However, these findings also identify a potential pathway for intervention. Reminding people of resources they may be unaware of will likely increase their likelihood of preparation and decrease information avoidance.
Supply Shock Versus Demand Shock: The Local Effects of New Housing in Low-Income Areas
Brian Asquith, Evan Mast & Davin Reed
Federal Reserve Working Paper, December 2019
Abstract:
We study the local effects of new market-rate housing in low-income areas using microdata on large apartment buildings, rents, and migration. New buildings decrease nearby rents by 5 to 7 percent relative to locations slightly farther away or developed later, and they increase in-migration from low-income areas. Results are driven by a large supply effect - we show that new buildings absorb many high-income households - that overwhelms any offsetting endogenous amenity effect. The latter may be small because most new buildings go into already-changing areas. Contrary to common concerns, new buildings slow local rent increases rather than initiate or accelerate them.
The (Non-) Effect of Opportunity Zones on Housing Prices
Jiafeng Chen, Edward Glaeser & David Wessel
NBER Working Paper, December 2019
Abstract:
Will the Opportunity Zone program, America's largest new place-based policy in decades, generate neighborhood change? We compare single-family housing price growth in Opportunity Zones with price growth in areas that were eligible but not included in the program. We also compare Opportunity Zones to their nearest geographic neighbors. All estimates rule out price impacts greater than 1.3 percentage points with 95% confidence, suggesting that, so far, home buyers don't believe that this subsidy will generate major neighborhood change. Opportunity Zone status reduces prices in areas with little employment, perhaps because buyers think that subsidizing new investment will increase housing supply.