IRP Discussion Paper Abstracts - 2007

Notes: Abstracts are plain text. Downloadable papers are in Adobe Acrobat (.pdf) format.
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Temporary Help Agencies and the Advancement Prospects of Low Earners
Fredrik Andersson, Harry J. Holzer, and Julia Lane

Full Text: DP 1332-07

In this paper we use a very large matched database on firms and employees to analyze the use of temporary agencies by low earners, and to estimate the impact of temp employment on subsequent employment outcomes for these workers. Our results show that, while temp workers have lower earnings than others while working at these agencies, their subsequent earnings are often higher-but only if they manage to gain stable work with other employers. Furthermore, the positive effects seem mostly to occur because those working for temp agencies subsequently gain access to higher-wage firms than do comparable low earners who do not work for temps. The positive effects we find seem to persist for up to six years beyond the period during which the temp employment occurred.

Collateral Costs: The Effects of Incarceration on Employment and Earnings Among Young Men
Harry J. Holzer

Full Text: DP 1331-07

The enormous increases in incarceration that have occurred in the U.S. over the past few decades have no doubt generated major societal benefits-such as a likely reduction in crime-as well as major costs-such as the huge public expense of building and operating prisons. In addition, there are a range of "collateral" benefits and costs to the individuals who are incarcerated, their families/communities, and others that need to be considered. In this paper, the author reviews what is known about the collateral costs and benefits of incarceration on earnings and employment. He then explores the different studies on this topic, focusing on the data sources and empirical methods used, and on the magnitudes of the effects generated. The author argues that, while the credible empirical evidence is quite mixed, the preponderance of it points to negative effects of incarceration on the subsequent employment and earnings of offenders. He concludes the paper by asserting that the large costs on employment associated with current levels of incarceration need to be acknowledged and addressed through remedial policy and programmatic activity.

Testing New Ways to Increase the Economic Well-Being of Single-Parent Families: The Effects of Child Support Policies on Welfare Participants
Maria Cancian, Daniel R. Meyer, and Jennifer Roff

Full Text: DP 1330-07

Single-parent families are economically vulnerable. Some child support policies have been aimed at improving the economic well-being of these families, while others have been focused on decreasing welfare costs. Since 1996, states have been free to decide how to treat child support when it is paid on behalf of a welfare participant. States decide both how much child support income to ignore in the calculation of benefits (the disregard) and whether to send a separate child support check to the participant (the pass-through). Disregard and pass-through policies have potential impacts on economic well-being and on governmental costs, but little research has focused on their effects. This paper uses variation in child support disregard and pass-through policy across states and years to estimate whether these policies are associated with paternity establishment, child support collections, and the average dollar amount of child support collected, as reflected in state-level administrative data. We find that the disregard is positively associated with paternity establishment in all models, and is positively associated with collections in two of the four models examined. The pass-through has insignificant, or negative, effects.

The Stability of Shared Child Physical Placements in Recent Cohorts of Divorced Wisconsin Families
Lawrence M. Berger, Patricia R. Brown, Eunhee Joung, Marygold S. Melli, and Lynn Wimer

Full Text: DP 1329-07

This paper describes the living arrangements of children in Wisconsin families with sole mother and shared child physical placements following parental divorce and explores the stability of these arrangements during (approximately) the next three years. Contrary to prior research in this area, results provide little evidence that children in shared placement spend less time in their father’s care about three years after a divorce than they did at the time of the divorce. In contrast, children with sole mother placement appear to progressively spend less time in their father’s care in the years following a divorce, and a considerable proportion of these children spend little or no time in their father’s care about three years after divorce.

Why Are So Many Americans in Prison?
Steven Raphael and Michael A. Stoll

Full Text: DP 1328-07

The United States currently incarcerates its residents at a rate that is greater than every other country in the world. Aggregating the state and federal prison populations as well as inmates in local jails, there were 737 inmates per 100,000 U.S. residents in 2005 (International Centre for Prison Studies 2007). This compares with a world average of 166 per 100,000 and an average among European Community member states of 135. Of the approximately 2.1 million U.S. residents incarcerated in 2005, roughly 65 percent were inmates in state and federal prisons while the remaining 35 percent resided in local jails.

Moreover, current U.S. incarceration rates are unusually high relative to historical figures for the U.S. itself. For the fifty-year period spanning the 1920s through the mid-1970s, the number of state and federal prisoners per 100,000 varied within a 10- to 20-unit band around a rate of approximately 110. Beginning in the mid-1970s, however, state prison populations grew at an unprecedented rate, nearly quadrupling between the mid-1970s and the present. Concurrently, the rate of incarceration in local jails more than tripled.

The Economic Costs of Poverty in the United States: Subsequent Effects of Children Growing Up Poor
Harry J. Holzer, Diane Whitmore Schanzenbach, Greg J. Duncan, and Jens Ludwig

Full Text: DP 1327-07

In this paper, we review a range of rigorous research studies that estimate the average statistical relationships between children growing up in poverty and their earnings, propensity to commit crime, and quality of health later in life. We also review estimates of the costs that crime and poor health per person impose on the economy. Then we aggregate all of these average costs per poor child across the total number of children growing up in poverty in the U.S. to estimate the aggregate costs of child poverty to the U.S. economy. Our results suggest that the costs to the U.S. associated with childhood poverty total about $500 billion per year, or the equivalent of nearly 4 percent of GDP.

The Effect of Criminal Background Checks on Hiring Ex-Offenders
Michael A. Stoll and Shawn D. Bushway

Full Text: DP 1326-07

The rapid rise in the nation's incarceration rate over the past decade has raised questions about how to successfully reintegrate a growing number of ex-offenders. Employment has been shown to be an important factor in reintegration, especially for men over the age of 27, who represent the majority of individuals released from prison. At the same time, there is substantial evidence that employers discriminate against ex-prisoners. One policy response that has received considerable attention is to deny employers access to criminal history record information, including movements to "ban the box" asking about criminal history information on job applications. The assumption underlying this movement is that knowledge of ex-offender status leads directly to a refusal to hire. An alternative view is that some employers care about the characteristics of the criminal history record, and use information about criminal history in a more nuanced way. This paper explores this issue using unique establishment-level data collected in Los Angeles in 2001. On average, we replicate the now common finding that employer-initiated criminal background checks are negatively related to the hiring of ex-offenders. However, this negative effect is less than complete. The effect is strongly negative for those employers that are legally required to check. But some employers appear to check to gain additional information about ex-offenders (and thus hire more ex-offenders than other employers), while checking appears to have no effect on hiring ex-offenders for those employers not legally required to check. Therefore, initiatives aimed at restricting background checks for those firms not legally required to check may not have the desired consequences of increasing ex-offender employment.

Income Volatility and Food Insufficiency in U.S. Low-Income Households, 1992-2003
Neil Bania and Laura Leete

Full Text: DP 1325-07

In this paper we investigate changes in monthly income volatility in low-income households in the United States since the early 1990s, as well as the relationship between that volatility and food insufficiency. Drawing on data from the Survey of Income and Program Participation (SIPP), we examine whether negative income shocks increase the chances that a household experiences food insufficiency. We find that monthly income volatility is highest for lower income households, and that it increased substantially between 1992 and 2003. Moreover, the greatest increases in income volatility occurred in households with incomes below the poverty line, and this increase appears to have its roots in the shift of household income away from relatively stable public assistance (AFDC/TANF) benefits and towards earnings. We show that volatility is smoothed considerably by the receipt of food assistance benefits (food stamps and/or WIC) and the receipt of these benefits narrows the income volatility gap between lower- and relatively higher-income households. Nevertheless, the consideration of food assistance benefits does not eliminate the large increases in income volatility observed over the time period. In a logistic regression model, we find that both the level of income and income volatility affect the predicted probability of food insufficiency. The results are consistent with theoretical models in which households face either liquidity constraints or binding constraints in spending associated with contractual nonfood expenditures. Finally, we find some evidence to suggest that the probability that higher income households suffer food insufficiency is not related to income volatility, which is consistent with these households not facing liquidity constraints.

Growing Up Poor and Childhood Weight Problems
Haiyong Liu

Full Text: DP 1324-07

This paper investigates the impact of growing up in poverty on the risk of childhood weight problems. Understanding the effect of family income on childhood weight problems is important, but has been hindered by the potential endogeneity of family income. We use matched mother-child data from the National Longitudinal Survey of Youth (NLSY) to study the effects of growing up poor on risks of childhood overweight and underweight, accounting for unobserved heterogeneity that governs both children's weight and family income. We also estimate the impacts of family income on a child's weight measured by Body Mass Index (BMI) at different points in the conditional distribution of children's weight, using a two-stage residual inclusion least absolute deviation approach. Our results show that the mean effects of poverty exposure on risks of obesity and underweight are not statistically different from zero, accounting for the endogeneity of family income. More importantly we find that growing up poor increases a child's BMI by 14.7 percent if her BMI is at the 90th quantile of her cohort's BMI distribution and reduces her BMI by 12.7 percent if her BMI is at the 10th quantile.

Does Greater Exposure to WIC Affect Maternal Behavior and Improve Infant Health? Evidence from the Pregnancy Nutrition Surveillance System
Ted Joyce and Cristina Yunzal

Full Text: DP 1323-07

Recent analyses have reached differing conclusions on how effectively the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) improves infant health. We use 1996-2003 data from North Carolina's Pregnancy Nutrition Surveillance System to address limitations in previous work. With information on the mother's timing of WIC enrollment, we test whether greater exposure to WIC is associated with less smoking, greater weight gain, and better birth outcomes. Our results suggest that much of the often-reported association between WIC and lower rates of preterm birth is likely spurious, the result of gestational age bias. We find at best modest effects of WIC on fetal growth, but no association between WIC and smoking. A series of falsification tests provide additional evidence that the robust association between WIC and preterm birth from observational studies is likely specious.

Family Capital: How First-Generation Higher-Education Students Break the Intergenerational Cycle
Anat Gofen

Full Text: DP 1322-07

The first children in a family to attain a higher education, referred to as "first-generation students," embody the realization of social mobility. Previous analysis has often portrayed them as succeeding despite their family background. This research suggests that although they face many material challenges, their families are often a key resource, rather than a constraint. This research attempts to reveal what enabled the intergenerational cycle of disadvantage to be broken. In-depth, semi-structured interviews were used to collect data from Israeli families in which intergenerational mobility took place (N = 50). Employing a grounded theory approach, the analysis reveals that breaking the intergenerational cycle mostly concerns family day-to-day life, and that it reflects three main components: time horizon, interpersonal relationships, and family values.

Food Stamps and Food Insecurity: What Can Be Learned in the Presence of Nonclassical Measurement Error?
Craig Gundersen and Brent Kreider

Full Text: DP 1321-07

Policymakers have been puzzled to observe that food stamp households appear more likely to be food insecure than observationally similar eligible nonparticipating households. We reexamine this issue allowing for nonclassical reporting errors in food stamp participation and food insecurity. Extending the literature on partially identified parameters, we introduce a nonparametric framework that makes transparent what can be known about conditional probabilities when a binary outcome and conditioning variable are both subject to nonclassical measurement error. We find that some prevailing conclusions in the food assistance literature hinge critically on implicit assumptions about the nature and degree of classification errors in the data.

Investment in Child Quality Over Marital States
Meta Brown and Christopher J. Flinn

Full Text: DP 1320-07

Policies governing divorce and parenting, such as child support orders and enforcement, child custody regulations, and marital dissolution requirements, can have a large impact on the welfare of parents and children. Recent research has produced evidence on the responses of divorce rates to unilateral divorce laws and child support enforcement. In this paper the authors argue that in order to assess the child welfare impact of family policies, one must consider their influence on parents' investments in their children as well as the stability of the marginal marriage. Further, the authors expect that changes in the regulatory environment induce changes in the distribution of resources within both intact and divided families. The authors develop a continuous time model of parents' marital status choices and investments in children, with the main goal being the determination of how policies toward divorce influence outcomes for children. Estimates are derived for model parameters of interest using the method of simulated moments, and simulations based on the model explore the effects of changes in custody allocations and child support standards on outcomes for children of married and divorced parents. We find that, while small changes in children's academic attainment are induced by significant shifts in custody and support, the major effects of these policies in both intact and divided households are on the distribution of welfare between parents. In addition, children's attainments are not necessarily best served by the divorce-minimizing policy.