Spent
The Persistent Reduction in Poverty from Filing a Tax Return
Shanthi Ramnath & Patricia Tong
American Economic Journal: Economic Policy, forthcoming
Abstract:
Low-income households not required to file often fail to receive benefits provided through the tax code. In 2008, the U.S. government made people with at least $3,000 in earnings eligible for a stimulus payment if they filed a tax return. Using eligibility for this credit as an instrument for filing, we find with administrative data that filing reduces the probability of living in poverty in future years, which is a result of increases in EITC claiming, workforce attachment, and earnings. These results demonstrate temporary incentives to participate in the tax system have persistent real effects on economic activity and poverty.
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The Relationship Between Mental Representations of Welfare Recipients and Attitudes Toward Welfare
Jazmin Brown-Iannuzzi et al.
Psychological Science, January 2017, Pages 92-103
Abstract:
Scholars have argued that opposition to welfare is, in part, driven by stereotypes of African Americans. This argument assumes that when individuals think about welfare, they spontaneously think about Black recipients. We investigated people’s mental representations of welfare recipients. In Studies 1 and 2, we used a perceptual task to visually estimate participants’ mental representations of welfare recipients. Compared with the average non-welfare-recipient image, the average welfare-recipient image was perceived (by a separate sample) as more African American and more representative of stereotypes associated with welfare recipients and African Americans. In Study 3, participants were asked to determine whether they supported giving welfare benefits to the people pictured in the average welfare-recipient and non-welfare-recipient images generated in Study 2. Participants were less supportive of giving welfare benefits to the person shown in the welfare-recipient image than to the person shown in the non-welfare-recipient image. The results suggest that mental images of welfare recipients may bias attitudes toward welfare policies.
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The Life-cycle Benefits of an Influential Early Childhood Program
Jorge Luis García et al.
NBER Working Paper, December 2016
Abstract:
This paper estimates the long-term benefits from an influential early childhood program targeting disadvantaged families. The program was evaluated by random assignment and followed participants through their mid-30s. It has substantial beneficial impacts on health, children's future labor incomes, crime, education, and mothers' labor incomes, with greater monetized benefits for males. Lifetime returns are estimated by pooling multiple data sets using testable economic models. The overall rate of return is 13.7% per annum, and the benefit/cost ratio is 7.3. These estimates are robust to numerous sensitivity analyses.
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Nicole Schmidt, Maria Glymour & Theresa Osypuk
Journal of Adolescent Health, forthcoming
Methods: The Moving to Opportunity (MTO) study randomly assigned volunteer families (1994–1997) to receive a Section 8 voucher to move to lower poverty neighborhoods versus a public housing control group. We tested three-way treatment, gender, and age-at-randomization interactions using intent-to-treat linear regression predicting a risky behavior index (RBI; measured in 2002, N = 2,829), defined as the fraction of 10 behaviors the youth reported (six measuring risky substance use [RSU], four measuring risky sexual behavior), and the RSU and risky sexual behavior subscales.
Results: The treatment main effect on RBI was nonsignificant for girls (B = −.01, 95% confidence interval −.024 to .014) and harmful for boys (B = .03, 95% confidence interval .009 to .059; treatment-gender interaction p = .01). The treatment, gender, and age interaction was significant for RBI (p = .02) and RSU (p ≤ .001). Treatment boys 10 years or older at randomization were more likely (p < .05) than controls to exhibit RBI and RSU, whereas there was no effect of treatment for boys <10 years. There were no treatment control differences by age for girls' RBI, but girls 9+ years were less likely than girls ≤8 years to exhibit RSU (p < .05).
Conclusions: Moving families of boys aged 10 years or older with rental vouchers may have adverse consequences on risky behaviors but may be beneficial for girls' substance use. Developmental windows are different by gender for the effects of improving neighborhood contexts on adolescent risky behavior.
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Targeting Policies: Multiple Testing and Distributional Treatment Effects
Steven Lehrer, Vincent Pohl & Kyungchul Song
NBER Working Paper, December 2016
Abstract:
Economic theory often predicts that treatment responses may depend on individuals’ characteristics and location on the outcome distribution. Policymakers need to account for such treatment effect heterogeneity in order to efficiently allocate resources to subgroups that can successfully be targeted by a policy. However, when interpreting treatment effects across subgroups and the outcome distribution, inference has to be adjusted for multiple hypothesis testing to avoid an overestimation of positive treatment effects. We propose six new tests for treatment effect heterogeneity that make corrections for the family-wise error rate and that identify subgroups and ranges of the outcome distribution exhibiting economically and statistically significant treatment effects. We apply these tests to individual responses to welfare reform and show that welfare recipients benefit from the reform in a smaller range of the earnings distribution than previously estimated. Our results shed new light on effectiveness of welfare reform and demonstrate the importance of correcting for multiple testing.
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The Role of Policy and Practice in Short Spells of Child Care Subsidy Participation
Elizabeth Davis, Caroline Krafft & Nicole Forry
Journal of Public Administration Research and Theory, January 2017, Pages 1-19
Abstract:
A major change in US child care subsidy policy in 2014 established a 12-month eligibility period for families participating in the child care subsidy program. The primary policy objective of lengthening eligibility periods was to increase the stability of child care. Previous research in a small number of states has shown that families are more likely to leave the subsidy program at the time of eligibility recertification even though they may remain eligible. Using data from the state of Maryland, this article investigates whether longer eligibility periods contribute to longer continuous subsidy receipt and the degree to which local offices follow state guidelines when setting redetermination periods. Using a Cox proportional hazards model and controlling for child, family, and provider characteristics, we show that families were substantially more likely to leave the subsidy program when their voucher was due to expire or they were scheduled to recertify eligibility. We find that the span of time allotted to families before they need to recertify eligibility varied substantially across counties in ways that were not related to child or family characteristics, despite a statewide policy allowing eligibility recertification at 12-month intervals.
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Protective Prevention Effects on the Association of Poverty With Brain Development
Gene Brody et al.
JAMA Pediatrics, January 2017, Pages 46-52
Design, Setting, and Participants: In the rural southeastern United States, African American parents and their 11-year-old children were assigned randomly to the Strong African American Families randomized prevention trial or to a control condition. Parents provided data used to calculate income-to-needs ratios when children were aged 11 to 13 years and 16 to 18 years. When the participants were aged 25 years, hippocampal and amygdalar volumes were measured using magnetic resonance imaging.
Results: Of the 667 participants in the Strong African American Families randomized prevention trial, 119 right-handed African American individuals aged 25 years living in rural areas were recruited. Years lived in poverty across ages 11 to 18 years forecasted diminished left dentate gyrus (simple slope, −14.20; standard error, 5.22; P = .008) and CA3 (simple slope, −6.42; standard error, 2.42; P = .009) hippocampal subfields and left amygdalar (simple slope, −34.62; standard error, 12.74; P = .008) volumes among young adults in the control condition (mean [SD] time, 2.04 [1.88] years) but not among those who participated in the Strong African American Families program (mean [SD] time, 2.61 [1.77] years).
Conclusions and Relevance: In this study, we described how participation in a randomized clinical trial designed to enhance supportive parenting ameliorated the association of years lived in poverty with left dentate gyrus and CA3 hippocampal subfields and left amygdalar volumes. These findings are consistent with a possible role for supportive parenting and suggest a strategy for narrowing social disparities.
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The effects of minimum wages on the health of working teenagers
Susan Averett, Julie Smith & Yang Wang
Applied Economics Letters, forthcoming
Abstract:
This article examines the effect of minimum wage increases on the self-reported health of teenage workers. We use a difference-in-differences estimation strategy and data from the Current Population Survey, and disaggregate the sample by race/ethnicity and gender to uncover the differential effects of changes in the minimum wage on health. We find that white women are more likely to report better health with a minimum wage increase while Hispanic men report worse health.
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Landlords avoid tenants who pay with vouchers
David Phillips
Economics Letters, February 2017, Pages 48–52
Abstract:
This paper uses a correspondence experiment with fictional housing applicants to test how landlords respond to tenants paying with a subsidized voucher. Landlords respond positively to those wishing to pay by voucher only half as often as to those indicating no such desire. Within the set of apartments eligible for voucher rent limits, the voucher penalty increases with monthly rent. Landlord behavior places quantitatively important restrictions on the quantity and type of apartments available to voucher recipients.