2014–2015 Emerging Scholars Research Grants:
Promising Programs to Reduce Intergenerational Transmission of Poverty

IRP awarded funding to five projects as part of the Promising Programs to Reduce Intergenerational Transmission of Poverty research initiative. The $20,000 awards support research that runs from June 13, 2014, through November 13, 2015. Throughout the award period, grantees benefit from consultation with IRP senior affiliates, with each other, and, during a workshop at which grantees will present their draft paper, with other senior poverty scholars. The list of funded proposals and abstracts follows.

Funded Proposals

Proposal Abstracts

The Effect of Childhood Savings Accounts on Expenditures on Children
Principal Investigator: Katie Fitzpatrick, Albers School of Business and Economics, Seattle University

Katie Fitzpatrick

In 2005, the U.K. implemented the Child Trust Fund (CTF) to improve the life chances of children born into poverty. Under the CTF, the government funded an account for each child at birth and made additional contributions throughout childhood, with larger amounts going to children from low-income families. The hope was that upon reaching adulthood, the child would use these funds for activities that would improve their economic mobility.

This project would explore if parents alter their spending patterns in response to the CTF, particularly spending on child-related items that may improve child well-being. The introduction of the CTF, and the abrupt ending of the program in 2011 as part of the austerity measures under the Cameron government, provides a unique natural experiment to test how parents respond to a large-scale financial investment in children. Conceptually, it would test if parents have a predetermined level of child "quality" or if they adjust this level of quality in response to a public investment that increases the child’s endowment for their adult life.

The data for this project will be from the U.K. Living Costs and Food Survey (formerly the Family Expenditure Survey). The Living Costs and Food Survey collects demographic, income, and expenditure data on approximately 6,000 households each year. This expenditure data includes a 14-day detailed expenditure diary, as well as data on recurring payments, irregularly purchased items, and household durable goods. If parents increase their own investments, we would expect to see changes in expenditure patterns and increases in expenditure on goods and services that improve child well-being. These parental investments would be expected to improve the resources available to children early in life and, ultimately, a child's life chances. As a result, this study would improve our understanding of the effects of a large-scale child savings program and have implications for the long-term consequences of policies that seek to break the cycle of poverty.

Falling Behind: The Black-White Wealth Gap in Life Course and Intergenerational Perspective
Principal Investigator: Alexandra Killewald, Department of Sociology, Harvard University

Alexandra Killewald

In the United States, wealth disparities are large, the intergenerational transmission of wealth is strong, and the consequences of wealth for well-being in various domains are substantial. Yet the consequences of social origins for later life wealth outcomes have been insufficiently explored. Prior research has typically adopted a static approach that correlates current wealth with social origins and current characteristics, but ignores that wealth is dynamic and that early life advantages compound across the life course.

We hypothesize that parental advantage positions offspring on lifelong trajectories of wealth growth—a possibility we will test with random growth models and data from the National Longitudinal Survey of Youth 1979 (NLSY79). To examine mechanisms of the transmission of asset advantage, we focus on housing markets, hypothesizing that parental advantage facilitates home purchase and the purchase of rapidly appreciating homes. Using NLSY79 data and inverse probability of treatment weights, we will provide the most rigorous estimate to date of homeownership's effect on later life wealth. We will use random growth models to assess whether individuals from advantaged social origins disproportionately own homes with rapid appreciation rates.

Our analyses are also relevant for understanding the causes of massive black-white wealth disparities. Without considering the effect of social origins on wealth trajectories, prior research may have underestimated the contribution of social origins to the black-white wealth gap. Our evaluation of housing markets will allow us to predict the consequences of closing the black-white homeownership gap for the black-white asset gap and whether blacks' lower rates of home appreciation contribute to the asset gap. The results will inform policies intended to promote asset-building, increase equality of opportunity in wealth accumulation, and close the black-white asset gap.

By studying wealth in a dynamic context, we highlight the potential importance of the timing of interventions, as well as their content. Our analyses of the role of housing markets will provide insight into the value of housing policies as a mechanism for increasing social mobility and reducing racial disparities. Lastly, our analyses of the contribution of race disparities in social origins to the black-white wealth gap will address the potential (or limitations) of race-blind asset policies to reduce racial disparities in wealth.

Evaluating Differential Response in Child Welfare: An Intervention to Interrupt Child Maltreatment and Poverty?
Principal Investigator: Kerri M. Raissian, Department of Public Policy, University of Connecticut

Kerri M. Raissian

Child maltreatment may be both a cause and consequence of poverty, and therefore, policies targeted at reducing child maltreatment may be able to interrupt the intergenerational cycles of both of these outcomes. It was generally thought that Child Protective Service's (CPS's) investigative protocols and processes had the potential to create an adversarial climate between CPS and the family, which was ultimately counterproductive to strengthening families and protecting children who were at risk, especially low risk, of repeat victimization. To address this, in the 1990s states or counties within states began exploring a differential or alternative response system, which conducts family assessment and service delivery rather than investigations among low-risk referrals.

The goal of this research is to better understand the effects and in particular long-term effects of differential response. I will use the National Child Abuse and Neglect Data System (NCANDS): Child File for the years 2000 to 2012 to generate a series of difference-in-difference estimates to determine if differential response has had an effect on jurisdictions' overall child referral rate, the overall child substantiation rate, the overall foster care entry rate, and the overall revictimization rate. I will construct a variety of treatment and comparison groups. I will begin by comparing the change in outcomes between states with and without this policy, but I will also compare changes within states. This will involve exploiting states' variation in the cases eligible for differential response as well as county-level implementation of the policy.

Differential response may reduce the intergenerational transmission of poverty in two ways: by stopping the cycle of violence against children and by linking families to services that may assist them economically. It is a promising approach in child welfare, but the children and families affected by this policy deserve some evidence that it is working as intended.

Parental Behaviors, Genes, and the Intergenerational Transmission of Poverty
Principal Investigator: Emily Rauscher, Department of Sociology, University of Kansas

Emily Rauscher

How is poverty transmitted between generations? Cultural explanations suggest parental values and behaviors, though developed in response to structural marginalization, are passed on to children, preventing them from escaping poverty. Genetic explanations suggest economic standing is inherited at birth and is therefore even less amenable to policy changes than culture. If genetically determined, adult poverty status should be unrelated to parental behaviors. If poverty is culturally transmitted, limiting parental exposure should weaken the intergenerational transmission process, reducing the likelihood that children who experienced poverty will end up there as adults.

Recent research provides contradictory evidence about the potential consequences of childhood exposure to behaviors associated with poverty. Using family fixed effect models of sibling and twin data from Add Health, I will investigate three questions. First, do parent-child activities (e.g., talking about school, going to a play) moderate parent-child economic similarity? Second, consistent with the Biological Sensitivity to Context hypothesis, does an index of risky genotypes (random within full sibling pairs) moderate rather than mediate parent-child economic similarity? Third, do parental behaviors moderate any genetic risk of poverty?

Preliminary results for question one suggest parent-child activities significantly reduce the likelihood of adult poverty for those in poverty as a child, but are unrelated to poverty for others. Contradicting arguments that genes or culture mediate transmission, this finding suggests policies could weaken the cycle of poverty by subsidizing parent-child activities and providing poor parents more time to spend with their children. While they may have other important benefits, "welfare-to-work" programs could perversely strengthen the intergenerational transmission of poverty by reducing time parents can spend with children.

Access to Medical Care and the Intergenerational Transmission of Health: The Case of Asthma
Principal Investigator: Owen Thompson, Department of Economics, University of Wisconsin-Milwaukee

Owen Thompson

Children born to parents in poor health are more likely to experience health problems themselves. These intergenerational linkages are important both because health is a fundamental socioeconomic outcome in its own right, and because health is an important proximate determinant of outcomes like education, earnings, and poverty. Yet little is known about the extent to which policy interventions can reduce intergenerational health persistence and thereby promote social mobility and equalize opportunity.

The goal of this research is to determine the extent to which increased access to medical care reduces intergenerational linkages in asthma, a critical chronic health condition among U.S. children. Pediatric asthma is highly prevalent, strongly correlated across generations, and has been shown to negatively affect long-run socioeconomic outcomes. At the same time, asthma is highly manageable with appropriate care, so that expanding children's access to health care may mitigate intergenerational persistence, and in turn promote social mobility and equality of opportunity.

Data are drawn from the 1998 to 2012 waves of the National Health Interview Survey (NHIS). The unique structure of NHIS allows me to assemble data containing information on a variety of asthma outcomes as well as detailed health insurance status measures in a nationally representative sample of over 120,000 parent-child pairs.

To assess the impact of access to medical care on asthma transmission, I will exploit differences in the generosity of public health insurance programs for children, primarily Medicaid and CHIP, across states and over time. These programs expanded rapidly during the study period, but did so with a great deal of state-level heterogeneity, producing an unusually rich natural experiment that to date has not been used to study intergenerational health linkages.