IRP Discussion Paper Abstracts - 2003

Notes: Abstracts are plain text. Downloadable papers are in Adobe Acrobat (.pdf) format.
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Does Household Food Security Affect Cognitive and Social Development of Kindergartners?
Ame Stormer and Gail G. Harrison

Full Text: DP 1276-03

The development in the last decade of methodology for measuring and scaling household food insecurity and hunger in U.S. populations makes possible systematic examination of the ways in which hunger and food insecurity affect individuals and families. The impact on children has always been of primary concern for policy, advocacy, and science because of the vulnerability of children to long-term developmental sequelae. There is an emerging and rapidly growing literature demonstrating deletrious links between inadequate food and a variety of developmental outcomes for children, including poorer health status, school absenteeism, and emotional and behavioral dysfunction. The research presented here explores the relationship of household food insecurity to children's well-being in terms of cognitive and social development at kindergarten entry, utilizing a large and representative sample children in the United States. The timing of this evaluation, in the fall of the child's first school experience, allows a snapshot of a child's development throughout his/her preschool years relatively independent of the major influence that the school experience will have subsequently.

The data are from the Early Childhood Longitudinal Study of Kindergartners (ECLS-K), collected in 1998-99 by the National Center for Education Statistics, and comprise 20,929 children attending 1,000 private and public schools. Our results indicate that measures of reading, math, and general knowledge competence were not impacted by household food insecurity independent of other influences, but child emotional and functioning were negatively associated with household food insecurity even when many other relevant variables were controlled for. We also investigated the relationship of household food insecurity to children's attained growth and found no independent relationship of household food insecurity to height for age or weight for height.

Transitions in Welfare Participation and Female Headship
John M. Fitzgerald and David C. Ribar

Full Text: DP 1275-03

This study uses data from the 1990, 1992, 1993, and 1996 panels of the Survey of Income and Program Participation to examine how welfare policies and local economic conditions contribute to women's transitions into and out of female headship and into and out of welfare participation. It also examines whether welfare participation is directly associated with longer spells of headship. The study employs a simultaneous hazards approach that accounts for unobserved heterogeneity in all of its transition models and for the endogeneity of welfare participation in its headship model. The estimation results indicate that welfare participation significantly reduces the chances of leaving female headship. The estimates also reveal that more generous welfare benefits contribute indirectly to headship by increasing the chances that mothers will enter welfare. More generous Earned Income Tax Credit benefits are associated with longer spells of headship, nonheadship, and welfare participation and nonparticipation. Other measures of welfare policies, including indicators for the adoption of welfare waivers and the implementation of Temporary Assistance for Needy Families programs, are generally not significantly associated with headship or welfare receipt. Better economic opportunities are estimated to increase headship but reduce welfare participation among unmarried mothers.

The Effect of Increases in Welfare Mothers' Education on Their Young Children's Academic and Behavioral Outcomes: Evidence from the National Evaluation of Welfare-to-Work Strategies Child Outcomes Study
Katherine Magnuson

Full Text: DP 1274-03

Does an increase in a welfare mother's education improve her young child's academic performance or behavior? Positive correlations between mothers' educational attainment and children's well being, particularly children's cognitive development and academic outcomes, are among the most replicated results from developmental studies. Yet, surprisingly little is known about the causal nature of this relationship. Because conventional regression approaches to estimating the effect of maternal schooling on child outcomes may be biased by omitted variables, this study uses experimentally induced differences in mothers' education to estimate instrumental variable (IV) models. Data come from the National Evaluation of Welfare-to-Work Strategies Child Outcomes Study-an evaluation of mandatory welfare-to-work programs in which welfare recipients with young children were randomly assigned to either an education- or work-focused program group or to a control group that received no additional assistance. Findings suggest that increases in maternal education are positively associated with children's academic school readiness, and negatively associated with mothers' reports of their children's academic problems, but with little to no effect on children's behavior. Analyses were not able to determine whether the benefits of maternal education persisted over time, although they were able to test whether mothers' returns to schooling during their children's preschool years were more beneficial than returns during later years. Weak evidence indicates that mothers' reentry into school when children are young will have a lasting effect on children's academic problems.

Contextual Complexity and Violent Delinquency among Black and White Males
Marino A. Bruce

Full Text: DP 1273-03

Most social scientists agree that whites and African Americans exist in different economic, political, and social environments and assert that these "contextual" differences contribute substantially to group differences in violence and other antisocial outcomes. This paper extends these ideas into the empirical realm by using data from the National Longitudinal Study of Adolescent Health and structural equation modeling to compare a model of violent delinquency among black adolescents to one among white adolescents. The results from this comparative analysis illustrate how context leads to racial differences in violent delinquency.

The Devil May Be in the Details: How the Characteristics of SCHIP Programs Affect Take-Up
Barbara Wolfe, Scott Scrivner, with Andrew Snyder

Full Text: DP 1272-03

In this paper we explore whether the specific design of a state's Children's Health Insurance Program has contributed to its success in meeting two objectives-namely, has the program been successful in reducing the proportion of the targeted population that is uninsured, and has this been accomplished without a significant reduction in private coverage (that is, without crowd-out)? To answer these questions, we use three years of data (1998, 1999, 2000) from the Current Population Survey. We focus on the eligible population of children, broadly defined as those living in families with incomes below 300 percent of the federal poverty line. Our research identifies eliminating tests on assets, making phone lines available for those with questions about eligibility or enrollment, and expanding coverage to adults in low-income families as program characteristics that contribute to meeting both of these goals.

Universal Preschool: Much to Gain but Who Will Pay?
Scott Scrivner and Barbara Wolfe

Full Text: DP 1271-03

Experts tell us that 4-year-olds have much to gain from a stimulating and nurturing preschool experience, and mounting evidence suggests that these benefits accrue to society on a much larger scale as well. Although numerous proposals acknowledge the benefits of and need for improved early childhood education, few contain specific recommendations for how to go about financing a major expansion. This paper explores ways to finance a preschool program that would be universally available to all 4-year-olds in the country, a program that would be of at least moderate quality (and in many places of high quality). We review existing programs in the United States and abroad, as well as a variety of proposals for expanding preschool for 4-year-olds in this country, before turning to our own proposed expansion. We base our proposal on ability-to-pay as reflected in the existing tax system, and focus on parents as the main financial contributors, with additional funds transferred from existing state and federal programs that subsidize child care for this age group.

State Fiscal Responses to Welfare Reform during Recessions: Lessons for the Future
Howard Chernick and Andrew Reschovsky

Full Text: DP 1270-03

This paper addresses two questions. First, in periods of recession or slow economic growth, will state governments be able to meet the needs of their low-income residents for public assistance? Recessions lead to job losses and make it increasingly difficult for those without jobs, especially those with little experience and education, to find new jobs. Thus, a slowing economy not only reduces state tax revenue but also increases the need for fiscal assistance for low-income state residents.

Second, will states be willing to devote adequate resources to programs that provide either cash assistance or social services to their needy populations? In periods of fiscal stress, will state governments place a high priority on preventing holes in their "social safety nets" or will they choose instead to satisfy other claims on state resources?

Escaping Low Earnings: The Role of Employer Characteristics and Changes
Harry J. Holzer, Julia I. Lane, and Lars Vilhuber

Full Text: DP 1269-03

In this paper, we analyze the extent to which escape from or entry into low earnings among adult workers is associated with changes in their employers and firm characteristics. We do so using a unique dataset based on individual Unemployment Insurance wage records that are matched to other Census data. Our results show considerable mobility into and out of low earnings status, even for adults. They indicate that job changes are an important part of the process by which workers escape or enter low-wage status, and that changes in employer characteristics help to account for these changes. Matches between personal and firm characteristics also contribute to observed earning outcomes.

Employer Demand for Ex-Offenders: Recent Evidence from Los Angeles
Harry J. Holzer, Steven Raphael, and Michael A. Stoll

Full Text: DP 1268-03

In this paper, we investigate employer demand for ex-offenders using a recent employer survey taken in Los Angeles in 2001. We analyze not only employer stated preferences to hire offenders, but also the extent to which they actually do so. In addition, we examine the extent to which employers check the criminal backgrounds of job applicants, and the nature of such criminal background checks. We find that employers stated willingness to hire ex-offenders, as well as their actual hiring of such workers, is very limited. This aversion varies with the characteristics of the offender-employers are less averse to those charged with drug or property offenses, and more averse to those charged with a violent crime, those recently released from prison, and those without work experience. We also find that employer use of criminal backgrounds increased over the 1990s-and rose dramatically after 9/11/01. The implications of these findings for the employment opportunities of ex-offenders and for policy are discussed.

Employers in the Boom: How Did the Hiring of Unskilled Workers Change during the 1990s?
Harry J. Holzer, Steven Raphael, and Michael A. Stoll

Full Text: DP 1267-03

In this paper, we present evidence on how a wide range of employer attitudes and hiring behaviors with respect to unskilled workers changed over the decade of the 1990s. We use a unique source of data: a set of cross-sectional employer surveys administered over the period 1992-2001. We also try to disentangle the effects of labor market conditions from broader secular trends. The results indicate that employers became more willing to hire a range of disadvantaged workers during the boom-including minorities, workers with certain stigmas (such as welfare recipients), and those without recent experience or high school diplomas. The wages paid to newly hired unskilled workers also increased. On the other hand, employer demand for specific skill certification rose over time, as did their use of certain screens. The results suggest that the tight labor markets of the late 1990s, in conjunction with other secular changes, raised hiring costs and induced employers to shift toward screens that seemed relatively more cost-effective.

Minimum Wage Effects on Labor Market Outcomes under Search with Bargaining
Christopher J. Flinn

Full Text: DP 1266-03

Building upon a continuous-time model of search with Nash bargaining in a stationary environment, we analyze the effect of changes in minimum wages on labor market outcomes and welfare. While minimum wage increases invariably lead to employment losses in our model, they may be welfare-improving to labor market participants using any one of a number of welfare criteria. A key determinant of the welfare impact of a minimum wage increase is the Nash bargaining power parameter. We discuss identification of this model using Current Population Survey data on accepted wages and unemployment durations, and demonstrate that key parameters are not identified when the distribution of match values belongs to a location-scale family. By incorporating a limited amount of information from the demand side of the market, we are able to obtain credible and precise estimates of all primitive parameters, including bargaining power. Direct estimates of the welfare impact of the minimum wage increase from $4.25 to $4.75 in 1996 provide limited evidence of a small improvement. Using estimates of the primitive parameters we show that more substantial welfare gains for labor market participants could have been obtained by doubling the minimum wage rate in 1996, though at the cost of a perhaps unacceptably high unemployment rate.

The Role of Non-Financial Factors in Exit and Entry in the TANF Program
Robert Moffitt

Full Text: DP 1265-03

The dramatic decline in the AFDC-TANF caseload in the 1990s has refocused attention on the process of exit from and entry into welfare, a long-standing topic of interest in the research literature on the U.S. welfare system. This paper focuses on the role of non-financial factors in exit and entry in the post-1996 TANF program. The non-financial factors are work and other requirements, sanctions, and diversion. Using data from a study of welfare and non-welfare families in Boston, Chicago, and San Antonio in the period 1999-2001, both descriptive evidence and evidence from an econometric model suggest that these factors played a large role in exit and entry over the period.

The Role of Randomized Field Trials in Social Science Research: A Perspective from Evaluations of Reforms of Social Welfare Programs
Robert A. Moffitt

Full Text: DP 1264-03

One of the areas of policy research where randomized field trials have been utilized most intensively is welfare reform. Starting in the late 1960s with experimental tests of a negative income tax and continuing through current experimental tests of recent welfare reforms, randomized evaluations have played a strong and increasing role in informing policy. This paper reviews the record of these experiments and assesses the implications of that record for the use of randomization. The review demonstrates that, while randomized field trials in the area of welfare reform have been professionally conducted and well-run, and have yielded much valuable and credible information, their usefulness has been limited by a number of weaknesses, some of which are inherent in the method and some of which result from constraints imposed by the political process. The conclusion is that randomized field trials have an important but limited role to play in future welfare reform evaluations, and that it is essential that they be supplemented by nonexperimental research.

Managing to Parent: Social Support, Social Capital, and Parenting Practices among Welfare-Participating Mothers with Young Children
Maryah S. Fram

Full Text: DP 1263-03

This study investigated relationships among mothers' social support, individual attributes, social capital, and parenting practices for welfare-participating mothers with young children. Using data from the National Evaluation of Welfare-to-Work Strategies, latent profile analysis revealed three classes of mothers, reflecting high, moderate, and low patterns of social support. Overall, low support class members were quite broadly disadvantaged relative to the other groups, while moderate support class members were primarily disadvantaged in terms of neighborhood. Relationships between social support and social capital were highly nuanced, with strong social support acting as a "buffer" against the effects of mothers' stress on controlling discipline, but moderately constrained social support protecting against the negative effects of a welfare-based peer group on maternal warmth.

Food Stamp Program Participation of Refugees and Immigrants: Measurement Error Correction for Immigrant Status
Chris Bollinger and Paul Hagstrom

Full Text: DP 1262-03

In 1996, after two decades of increasing participation in cash and noncash public assistance programs by immigrant households (Borjas and Hilton, 1996), the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) drastically altered the availability of federal public assistance to legal immigrants but ostensibly not to refugees. Refugees were given a 5-year exemption from rules that applied to other legal immigrants. Yet, since 1996 the participation rate of refugees in public assistance programs such as Temporary Assistance for Needy Families (TANF), SSI, General Assistance, food stamps, and Medicaid has fallen at least as fast as for other foreign-born residents. From 1994 to 1997, refugee participation in TANF fell by 27 percent and participation in the Food Stamp Program (FSP) fell by 37 percent (Fix and Passel, 1999). During the same period participation in the FSP dropped by 30 percent for immigrants and 21 percent for natives.

This paper consistently estimates the effect of refugee status on participation in FSP even with measurement error in the identification of refugees and misreporting of food stamp participation. Specifically, this research seeks to accomplish three goals: (1) to estimate the impact of refugee status on take-up of the FSP using the March CPS for the years 1994-2001; (2) to demonstrate the impact of the PRWORA reform on the refugee effect; and (3) to correct for errors in measurement for refugee and legal permanent resident (LPR) status using methods that will help future researchers obtain consistent estimates when the key explanatory variable is known to be measured with error.

We draw conclusions from this paper along two dimensions. The first is methodological. The typical approach to measuring refugee status grossly underestimates the effects of refugee status on participation in the FSP. Additionally, failure to account for response error in program participation additionally understates the effects of all variables on participation. Hence studies failing to account appropriately for these problems are biased and cannot be used for policy analysis.

The far important dimension is that the story of FSP participation among immigrants and refugees is a complex one. A simple dummy variable for immigrant and refugee status fails to capture important aspects of the story. Refugees are more likely to participate in the FSP near the time of arrival, but their participation rates are declining with the time in the United States. Also, refugees are more sensitive to the economic climate than are U.S. citizens and other immigrants. Finally, there is clearly a differential effect between citizens and noncitizens. Immigrants who opt for citizenship are more likely to participate in welfare programs than those who do not.

Labor Specialization, Ethnicity, and Metropolitan Labor Markets
Franklin D. Wilson

Full Text: DP 1261-03

This paper provides an empirical assessment of the extent to which co-ethnic workers are under- or overrepresented in industry and occupation-based employment sectors based on the characteristics of workers themselves, attributes and resources of ethnic groups in which workers are affiliated, and characteristics of metropolitan areas. Specifically, the paper evaluates two claims found in the literature of economic sociology. The first claim is that ethnic affiliation, as reflected in group-based attributes and resources, affects the relative concentration of co-ethnic workers in employment sectors. The second is that metropolitan labor markets provide the context within which members of ethnic populations are sorted into employment sectors on the basis of worker characteristics, group-based resources, and supply and demand conditions prevailing in local labor markets, including the presence of similarly endowed members of other groups. Results partly confirm these claims and indicate that indicators of ethnic affiliation and local labor market conditions substantially affect the under- or overrepresentation of co-ethnic workers in employment sectors.

Milton Friedman, the Negative Income Tax, and the Evolution of U.S. Welfare Policy
Robert A. Moffitt

Full Text: DP 1260-03

The negative income tax represents one of the fundamental ideas of modern welfare policy. Based on a simple application of elementary price theory, it has a powerful lesson for work incentives in welfare programs. The academic literature on the negative income tax has raised two difficulties with it, one concerning work disincentives arising from an increase in the eligibility point, and the other concerning the possible superiority of work requirements. Actual welfare policy developments in the United States over the last 30 years have exhibited strong trends both consistent and inconsistent with the negative income tax ideal. On the one hand, the Earned Income Tax Credit has produced a negative income tax-like program that exceeds in generosity anything that Friedman ever imagined; on the other hand, the rise of a work requirement philosophy and the increasing categorization of the population into different, multiple programs represent the antithesis of the negative income tax.

The Dynamics of Prenatal WIC Participation
Christopher A. Swann

Full Text: DP 1259-03

The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) provides food vouchers, nutritional counseling, and health care referrals to low-income pregnant and breastfeeding women and their young children. Understanding the factors, including program rules, that affect the timing and duration of participation may help target resources toward women who are most likely to enroll in WIC late in their pregnancies or not enroll at all. In this paper I apply survival analysis techniques to data from the National Maternal and Infant Health Survey and the 1988 Survey of WIC Program Characteristics.

The hazard rate analysis shows that socioeconomic characteristics such as low education, Hispanic ethnicity, low income, and participation in other welfare programs are correlated with a higher likelihood of participation in WIC. Additionally, characteristics of the WIC program, including the ability to self-declare income and adjunctive eligibility for AFDC and Medicaid recipients, significantly increase the probability of participation. The results show that the hazard rate for participating in WIC is generally increasing during the first 4 months of pregnancy and decreasing thereafter. Finally, although the analysis is only suggestive because of data limitations, women who have participated in WIC during a previous pregnancy are about three times more likely to participate in WIC than women who have not participated in the past.

Recent policy changes have mandated income documentation and have expanded presumptive eligibility. The model estimates are used to simulate survivor curves under the 1988 rules and under the present rules, and these simulated outcomes are compared to assess the impact of the policy change. The simulated effect of the new policy is estimated to be about a 1 percentage point increase in the probability of participation over the course of a 40-week pregnancy.