IRP Discussion Paper Abstracts - 2011

Notes: Abstracts are plain text. Downloadable papers are in Adobe Acrobat (.pdf) format.
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Recent Developments in Antipoverty Policies in the United States
James P. Ziliak

Full Text: DP 1396-11

I survey recent developments in antipoverty policy in the United States over the past decade and examine how the safety net and tax system affect poverty and its correlates using data from the 2000 to 2010 waves of the Current Population Survey Annual Social and Economic Supplement. Unlike the 1980s and 1990s, and until the health care overhaul in 2009, the first decade of the 21st century was relatively tepid in terms of major transfer policy reforms. However, real spending on most major social programs increased significantly, and in some cases doubled or tripled, in response to demographic shifts and the deep recession. In spite of the real growth in social insurance and means-tested transfer programs, the trends in after-tax and transfer poverty rates were little affected, and if anything, suggest that the safety net has lost some of its antipoverty bite in terms of alleviating hardship among those living in deep poverty.

The Effects of Female Labor Force Participation on Obesity
Pedro Gomis-Porqueras, Oscar A. Mitnik, Adrian Peralta-Alva, and Maximilian D. Schmeiser

Full Text: DP 1395-11

This paper assesses whether a causal relationship exists between recent increases in female labor force participation and the increased prevalence of obesity amongst women. The expansions of the Earned Income Tax Credit (EITC) in the 1980s and 1990s have been established by prior literature as having generated variation in female labor supply, particularly amongst single mothers. Here, we use this plausibly exogenous variation in female labor supply to identify the effect of labor force participation on obesity status. We use data from the National Health Interview Survey (NHIS) and replicate labor supply effects of the EITC expansions found in previous literature. This validates employing a difference-in-differences estimation strategy in the NHIS data, as has been done in several other data sets. Depending on the specification, we find that increased labor force participation can account for at most 19 percent of the observed change in obesity prevalence over our sample period. Our preferred specification, however, suggests that there is no causal link between increased female labor force participation and increased obesity.

Creating Effective Education and Workforce Policies for Metropolitan Labor Markets in the United States
Harry J. Holzer

Full Text: DP 1394-11

How well do our education policies prepare America’s youth for the labor market? What challenges limit our success, and what opportunities do we have for improvements? Can public policy play a greater role in encouraging more success? In this chapter, I provide a summary of what we know on these issues, incorporating but also complementing many of the perspectives provided by the other [forthcoming volume] authors. In addition, I consider these questions as they apply to the unique characteristics of metropolitan areas in the United States.

I consider demand for both middle- and high-skill jobs, where the former are defined as those requiring some postsecondary education or training (broadly defined) beyond a high school diploma but less than a bachelor's degree, and the latter are defined as those requiring a bachelor's or higher. I then review the challenges limiting so many young Americans as they prepare for the labor market, as well as what we know about programs and policies that might improve observed outcomes. Finally, I review the characteristics of U.S. metropolitan areas that exacerbate the challenges we face–especially the uneven distribution of people and jobs within and across those areas.

Conditional Cash Transfers and College Persistence: Evidence from a Randomized Need-Based Grant Program
Sara Goldrick-Rab, Douglas N. Harris, James Benson, and Robert Kelchen

Full Text: DP 1393-11 (Note: Revised title and paper released in October 2012)

We use the random assignment of a private Wisconsin need-based grant to estimate the impacts of financial aid on college persistence among Pell Grant recipients at 13 public universities over three years. For equity and efficiency reasons, governments use conditional cash transfers to reduce the relationship between family income and college attainment, but prior research suggests that financial aid generates only modest positive effects. This is the first experimental study of a program resembling the longstanding federal Pell Grant program, but with fewer paperwork requirements and an award process that facilitates the identification of effects on college persistence, independent of initial college choice. We find that on average the grant increased neither enrollment nor credit attainment; the only notable positive average treatment effect was a 28 percent increase in the proportion of students completing 60 credits over two years but this was offset by a reduction in credits among other students. An exploratory analysis further suggests that the program's small average treatment effects mask considerable heterogeneity. In particular, it appears that students with a low (pre-randomization) propensity to persist in college received sizable positive benefits from the cash transfer, while students who were already more likely to persist in college received no benefit, and some may have been negatively affected. Thus, results from this experimental study suggest that the modest effects of conditional cash transfers for low-income university students primarily operate on credits rather than enrollment, and these could be enhanced with better targeting. More generally, we find that students respond to formal cash incentives in unexpected ways.

An Assessment of the Effectiveness of Anti-Poverty Programs in the United States
Yonatan Ben-Shalom, Robert Moffitt, and John Karl Scholz

Full Text: DP 1392-11

We assess the effectiveness of means-tested and social insurance programs in the United States. We show that per capita expenditures on these programs as a whole have grown over time but expenditures on some programs have declined. The benefit system in the U.S. has a major impact on poverty rates, reducing the percent poor in 2004 from 29 percent to 13.5 percent, estimates which are robust to different measures of the poverty line. We find that, while there are significant behavioral side effects of many programs, their aggregate impact is very small and does not affect the magnitude of the aggregate poverty impact of the system. The system reduces poverty the most for the disabled and the elderly and least for several groups among the non-elderly and non-disabled. Over time, we find that expenditures have shifted toward the disabled and the elderly, and away from those with the lowest incomes and toward those with higher incomes, with the consequence that post-transfer rates of deep poverty for some groups have increased. We conclude that the U.S. benefit system is paternalistic and tilted toward the support of the employed and toward groups with special needs and perceived deservingness.

Unequal Pathways through American Universities
Fabian T. Pfeffer and Sara Goldrick-Rab

Full Text: DP 1391-11

Student pathways through the American higher education system are complex and entail more than the choice between continuation and dropout. The four-year college system requires students seeking a bachelor's degree to pass through a series of transitions that are marked by the achievement of credit thresholds in each year of study. At those junctures students make critical decisions about their progress: whether to enroll for sufficient credits to ensure timely completion, whether to enroll for fewer credits, or whether to leave school for a limited period of time. This project overcomes the simplistic view of discrete choices between enrollment and nonenrollment and takes a close look at the cumulative nature of the attainment of U.S. students at four-year colleges and the social inequalities arising in this process.

Detailed transcript data from the National Educational Longitudinal Study (NELS-88) and multinomial transition models provide evidence on the shape of and social inequality in four-year college careers. We describe distinct trajectories through college and show that they strongly depend on students' decisions at earlier stages of their college careers. Transitions through college are also found to be strongly related to students' socioeconomic backgrounds. In addition, we show that the penalties incurred from unfavorable earlier choices is greater for disadvantaged students. By fully appreciating the cumulative nature of educational pathways through college we provide an important new view on the complex routes to college completion and trace an important source of the socioeconomic gap in college completion. The relatively rigid structure of the U.S. four-year college system appears to produce strong path-dependent and status dependent cumulative advantages for high-status students.

Immigration Policy and Less-Skilled Workers in the United States: Reflections on Future Directions for Reform
Harry J. Holzer

Full Text: DP 1390-11

This paper reviews the evidence on the effects of less-skilled immigration to the U.S., and their implications for immigration reform. It begins with a review of the costs of less-skilled immigration, in terms of competition to native-born American workers; and the benefits of such immigration in the form of lower consumer prices, higher employer profits, and greater efficiency for the U.S. economy. Effects of different legal categories of immigrants and of immigrant integration over time are considered. The paper then reviews various reform proposals and other ideas that might raise the net benefits associated with less-skilled immigration to the U.S.

Child Poverty during the Great Recession: Predicting State Child Poverty Rates for 2010
Julia B. Isaacs

Full Text: DP 1389-11

The country is slowly emerging from the Great Recession, the longest period of economic downturn since the Great Depression of the 1930s. As unemployment rates have risen, poverty also has risen. More than one in five children were poor in 2009, according to data released by the Census Bureau in September. Poverty statistics for 2010 will not be released until next September. This paper uses current data on nutrition assistance and unemployment, combined with lagged child poverty data, to provide predictions of child poverty, by state, 10 months before the actual statistics will be released. The model predicts that most states will see a rise in child poverty in 2010, with the increase averaging 1.3 percentage points across the states. According to these predictions, half the states (26 states) will have child poverty rates of 20 percent or higher in 2010, almost double the number of states (14) with poverty of 20 percent or higher in the pre-recessionary period of 2000 to 2007. Nationally, the number of poor children is predicted to rise by nearly 1 million, from 14.7 million in 2009 to 15.6 million children in 2010. The national child poverty rate is estimated to increase from 20.0 percent in 2009 to 21.3 percent in 2010. These predictions are subject to uncertainty, but nonetheless provide an early glimpse of how children are continuing to be affected by the Great Recession’s lingering effects.