IRP Discussion Paper Abstracts - 2013

Notes: Abstracts are plain text. Downloadable papers are in Adobe Acrobat (.pdf) format.
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Not Enough Hours in the Day: Work-Hour Insecurity and a New Approach to Wage and Hour Regulation
Charlotte Alexander and Anna Haley-Lock

Full Text: DP 1417-13

When it was passed, the 1938 Fair Labor Standards Act sought to address the "evils" of underpay and overwork by establishing a minimum wage and requiring premium overtime pay. However, today's low-wage, hourly workers more often face underwork than overwork. In this paper, we examine the scope of the problem of work-hour insecurity, particularly employers' practice of sending workers home early from scheduled shifts. We assess tools for addressing the resulting income and schedule instability, principally state "reporting pay" laws. We evaluate the laws' capacity to promote work-hour security, and consider paths for strengthening such protections in law.

Trends in Poverty with an Anchored Supplemental Poverty Measure
Christopher Wimer, Liana Fox, Irv Garfinkel, Neeraj Kaushal, and Jane Waldfogel

Full Text: DP 1416-13

Poverty measures set a poverty line or threshold and then evaluate resources against that threshold. The official poverty measure (OPM) is flawed on both counts. Because of these (and other) failings, statistics using the official poverty measure do not provide an accurate picture of poverty or the role of government policies in combating poverty. To address these well-known limitations, the Census Bureau recently implemented a supplemental poverty measure (SPM). In recent work, we have produced SPM-like estimates for the period 1967 to 2012, using historical data on incomes from the 1968 to 2013 Annual Social and Economic Supplement to the Current Population Survey (March CPS) and historical data on expenditures from the 1961, 1972/73, and 1980 to 2012 Consumer Expenditure Survey (CEX). One possible limitation of our historical SPM estimates is that they rely on annual calculations of thresholds even in years where we have incomplete CEX data. For these reasons, in this report we apply an alternative poverty measure that differs from the SPM in only one respect. Instead of having a threshold that is re-calculated over time, we use today's threshold and carry it back historically by adjusting it for inflation using the CPI-U-RS.

The Effect of SNAP on Poverty
Laura Tiehen, Dean Jolliffe, and Timothy Smeeding

Full Text: DP 1415-13

This paper systematically reviews the work on the antipoverty effect of SNAP using administrative and survey data. We found the antipoverty effects are even larger than those found in Census Bureau estimates if one adjusts for underreporting. Using re-weighting methods to benchmark the CPS to administrative data, the antipoverty effects are then almost again as large as without them. With underreporting adjustments, and depending on the poverty measure being considered, SNAP reduces poverty by 14 to 16 percent. We conclude that SNAP is our nation's most effective antipoverty program for the non-elderly when adjusted for underreporting, and it is especially good at reducing extreme poverty—by over 50 percent—and also especially effective for poor families with children.

Why Are So Many Americans on Food Stamps? The Role of the Economy, Policy, and Demographics
James P. Ziliak

Full Text: DP 1414-13

1 in 7 Americans received assistance from SNAP in FY2012, which is a rate 141 percent higher than in FY2000, but only 59 percent higher than in FY1980. In this chapter I describe the socioeconomic and policy climate in recent decades that had bearing on SNAP participation, along with a formal empirical analysis of those determinants and detailed simulations of the relative contributions of the economy, policy, and demographics to changes in SNAP participation over time. The results suggest that SNAP is operating effectively as an automatic fiscal stabilizer—nearly 50 percent of the increase in participation from 2007–2011 is due to the weak economy—but policy reforms expanding access and benefit generosity also affected participation, accounting for nearly 30 percent of the increase after the Great Recession. The changing demographics of the American household are helping restrain growth in SNAP.

Can Post-Employment Services Combined with Financial Incentives Improve Employment Retention for Welfare Recipients? Evidence from the Texas Employment Retention and Advancement Evaluation
Richard Dorsett, Richard Hendra, Philip K. Robins, and Sonya Williams

Full Text: DP 1413-13

Data from a recently-completed experimental program for out-of-work welfare recipients in Texas are used to examine the effects of a time-limited financial incentive coupled with post-employment services on recipients' rates of entering and leaving employment. While there is strong evidence that such programs can increase overall employment, the crucial question of how these increases arise is not well-understood. This paper presents a rigorous analysis of employment entry and exit effects, using a fully-specified dynamic model of employment duration that accounts for non-random sorting into employment statuses through flexible specifications for duration dependence and unobserved heterogeneity. The results indicate that for the Corpus Christi site, short-term effects were due to both employment retention and employment entry but, over time (as the program ceased operation), the retention effects faded out but the employment entry effects persisted and grew. For the Fort Worth site, there were smaller effects overall and less evidence of impacts that lasted much beyond the program operation period.

Connecting the Disconnected: Improving Education and Employment Outcomes among Disadvantaged Youth
Peter B. Edelman and Harry J. Holzer

Full Text: DP 1412-13

In this paper we will briefly review recent trends in employment outcomes for disadvantaged youth, focusing specifically on those who have become "disconnected" from school and the labor market, and why these trends have occurred. We then review a range of policy prescriptions that might improve those outcomes. These policies include: 1) Efforts to enhance education and employment outcomes, both among in-school youth who are at risk of dropping out and becoming disconnected as well as out-of-school youth who have already done so; 2) Policies to increase earnings and incent more labor force participation among youth, such as expanding the eligibility of childless adults (and especially non-custodial parents) for the Earned Income Tax Credit (EITC); and 3) Specific policies to reduce barriers to employment faced by ex-offenders and non-custodial parents (NCPs). We also consider policies that target the demand side of the labor market, in efforts to spur the willingness of employers to hire these young people and perhaps to improve the quality of jobs available to them.

Just the Facts, Ma'am: Postsecondary Education and Labor Market Outcomes in the U.S.
Harry J. Holzer and Erin Dunlop

Full Text: DP 1411-13

In this paper, we provide a comprehensive and up-to-date snapshot of the most important postsecondary education and labor market outcomes in the United States using two nationally representative sources of data: the Survey of Income and Program Participation (SIPP) and the National Educational Longitudinal Survey (NELS). We find that postsecondary educational attainment has risen modestly among young Americans over the past two decades, with greater gains in bachelor of arts (BA) attainment in the 1990s and in certificate and associate of arts (AA) attainment since 2000 (though attainment rose during the Great Recession at all levels). Both younger and older cohorts of blacks and Hispanics have made relative progress in the attainment of certificates and AAs but still lag behind whites in the entry into and completion of BA programs; completion rates in BA programs also lag substantially for those from low-income families or with weak academic achievement in high school. Young women (especially among whites and blacks) now achieve sub-BA and BA degrees at higher levels than their male counterparts and generally have higher achievement. There are labor market returns for all postsecondary credentials, including certificates and AA degrees, though these vary across field of study. Large gender gaps exist in field of study, with men more concentrated in high-paying fields. Lastly, we find that high school achievement measures can account for much of the racial gaps in BA completion and earnings and some of the gaps by family background, though they account for little of the continuing gender gap favoring young men in earnings.

Estimating Benefits from University-Level Diversity
Barbara Wolfe and Jason Fletcher

Full Text: DP 1410-13

One of the continuing areas of controversy surrounding higher education is affirmative action. The Supreme Court has agreed to hear Fisher v. Texas, and their ruling may well influence universities' diversity initiatives, especially if they overturn Grutter v. Bollinger and rule that diversity is no longer a "compelling state interest." But what lies behind a compelling state's interest? One issue that continues to require more information is estimating and understanding the gains for those attending colleges and universities with greater diversity. Most existing studies are either based on evidence from one institution, which has issues of both selectivity and limited "treatments," or focus on selective institutions, which also face issues of selection bias from college choice behaviors. In this research we use Wave 3 of Add Health, collected in 2001–02 of those then attending college. Add Health collected the IPEDS number of each college and matched these to the racial/ethnic composition of the student body. We convert these data into an index of diversity and then ask whether attending a college/university with a more diverse student body influences a variety of outcomes at Wave 4 (2007–08), including years of schooling completed, earnings, family income, composition of friends, and probability of voting. Our results provide evidence of a positive link between attending a college with greater diversity and higher earnings and family income, but not with more schooling or the probability of voting.

Food Assistance and Children's Eating Patterns, Food Insecurity, and Overweight: The Influence of Local Food Prices
Taryn W. Morrissey, Alison Jacknowitz, and Katie Vinopal

Full Text: DP 1409-13

Objectives: We examine how local food prices influence children's body mass index (BMI), overweight, food insecurity, and food consumption, and whether receipt of public food assistance moderates these associations.

Methods: We linked data from the Early Childhood Longitudinal Study-Birth Cohort (ECLS-B), a nationally representative study of children from birth to age 5, to local food price data from the ACCRA Cost-of-Living Index (COLI) (approx. 11,700 observations). Using OLS, linear probability, and fixed effects (FE) models, we exploit the variability in food price data over time and among children who move residences.

Results: Results indicate that higher-priced fruits and vegetables are associated with higher standardized measures of children's BMI. This relationship is driven by fresh (vs. frozen or canned) fruits and vegetables. In the FE models, higher-priced soft drinks are associated with a lower likelihood of being overweight, and surprisingly, higher fast food prices are associated with a greater likelihood of being overweight. Food prices are largely unassociated with children's food consumption. There is limited evidence that food stamp receipt mitigates the effect of food prices on adult-level food insecurity.

Conclusions: Policies that reduce the costs of fresh fruits and vegetables may be effective in promoting healthy weight among young children.

The Cost of Free Assistance: Studying Nonuse of Food Assistance in San Francisco
Christopher Wimer, Rachel Wright, and Kelley Fong

Full Text: DP 1408-13

Nongovernmental free food assistance is available to many low-income Americans through food pantries, yet many do not avail themselves of this assistance. As the monetary value of such assistance can be over $2,000 per year, nonuse poses a puzzle from an economic standpoint. This study uses original data collected through in-depth interviews with 63 low-income San Franciscans who did not use free food assistance from food pantries. The data paint a nuanced picture of the reasons low-income people do not obtain assistance from local food pantries. The study explores respondents' need for, knowledge of, access to, and acceptance of assistance. We find that overall, sample members concluded that the benefit of free food assistance did not justify the perceived effort and psychological costs involved. These costs included moral objections to taking food from others, perceptions of low-quality food, hassles and "drama," racial tensions, and the emotional toll of accepting assistance.

Food Stamps, Food Sufficiency, and Diet-Related Disease among the Elderly
Nadia Greenhalgh-Stanley and Katie Fitzpatrick

Full Text: DP 1407-13

In 2010, more than 2.3 million households (7.9 percent) with an elderly member were food insecure and even more reported some difficulties with obtaining adequate resources for food (Coleman-Jensen et al. 2010). It is widely acknowledged that any food insufficiency contributes to poor health and increases the likelihood of diet-related disease. The Supplemental Nutrition Assistance Program (SNAP), formerly the Food Stamp Program, is the primary nutrition assistance program aimed at reducing food-related hardship. Yet, participation rates for the eligible elderly are estimated at 35 percent (Cunnyngham 2010). This low take-up rate among the elderly and its effects on food insufficiency and diet-related disease is relatively unexplored. This paper uses restricted-use Health and Retirement Study (HRS) data to examine the effect of SNAP participation on reported food insufficiency, health measures, and diet-related disease to better understand potential long-term health consequences of the elderly. To address the endogeneity of the SNAP participation decision and identify the causal effects of SNAP use on the elderly, we instrument for SNAP participation with state and county-level variables related to SNAP outreach, including radio and television advertisements, and state SNAP rules. We find that the causal effect of SNAP participation results in higher levels of preventative health care, some improved diet-related outcomes, but a higher incidence of food distress, which has potential policy implications about the generosity of SNAP benefits for the elderly.

The Neighborhood Food Environment, Food Stamp Program Participation, and Weight-Related Outcomes of Low-Income Women
Diane M. Gibson

Full Text: DP 1406-13

Purpose: Using a sample of low-income women, this paper examines whether the availability of food retail and food service establishments in a woman’s neighborhood of residence (her "neighborhood food environment") was associated with food purchase decisions, daily energy intake or weight status. It also explores whether these associations differed for Food Stamp Program (FSP) participants compared to low-income nonparticipants.

Data: Restricted-access geocoded data from the 2007–2008 National Health and Nutrition Examination Survey was combined with 2007–2008 ZIP Code Business Patterns data measuring the availability of supermarkets, small grocery stores, convenience stores, fast food restaurants and full-service restaurants in a person’s ZIP Code Tabulation Area of residence.

Methods: Ordinary Least Squares models of weight-related outcomes were estimated that included an indicator for household FSP participation in the previous year and either a set of separate neighborhood food establishment density variables or neighborhood food environment composite variables formed using factor analysis. All models controlled for a large set of additional individual and environment characteristics.

Results: In the models of weight-related outcomes that included separate neighborhood establishment density variables there were very few significant associations between the individual establishment density variables and the outcomes. However, the neighborhood establishment density variables were jointly significantly associated with many of the outcomes. In models including factors, higher neighborhood density of "small or quick" establishments was significantly associated with spending more of the family food budget at grocery stores, eating more fast food meals, less frequent major grocery shopping trips, higher BMI, and a higher likelihood of obesity. Higher neighborhood density of supermarkets and restaurants was associated with significantly fewer fast food meals per week, more frequent major grocery shopping trips, lower BMI, and a lower likelihood of obesity. However, the magnitudes of the estimated relationships suggest that the changes in behavior that would accompany changes in the neighborhood food environment such as the opening of a new supermarket are likely to be quite small. Although FSP participants and low-income nonparticipants appear to respond similarly to neighborhood food environments, FSP participants lived in neighborhoods with a significantly higher mean density of "small or quick" establishments.

Accelerating College Knowledge: Examining the Feasibility of a Targeted Early Commitment Pell Grant Program
Robert Kelchen and Sara Goldrick-Rab

Full Text: DP 1405-13

The persistently low college enrollment and completion rates of youth from poor families are partly attributable to their uncertainty about whether college is affordable. In the current system, concrete information about college costs arrives at the end of high school and is only available to those who complete a complex application. Evidence suggests this timing affects students' motivation and ability to adequately prepare for college. We evaluate the feasibility of addressing this problem by using a simplified eligibility process to make an early commitment of the full Pell Grant to eighth graders from needy families. Our analyses suggest substantial benefits relative to the predicted costs. Our simulation of the estimated fiscal effects suggests that Pell program costs would grow by approximately $1.5 billion annually and the benefits would exceed the costs by approximately $600 million.

Good Workers for Good Jobs: Improving Education and Workforce Systems in the US
Harry J. Holzer

Full Text: DP 1404-13

Stagnant earnings and growing inequality in the US labor market reflect both a slowdown in the growth of worker skills and the growing matching of good-paying jobs to skilled workers. Improving the ties between colleges, workforce institutions, and employers would help more workers gain the needed skills. Evaluation evidence shows that training programs linked to employers and good-paying jobs are often cost-effective. Helping more states develop such programs and systems would help raise worker earnings and reduce inequality.